HTSC·2024-08-22 04:03Investment Rating - The investment rating for the company is "Buy" (maintained) for both A-shares and H-shares [2][3]. Core Views - The company reported a steady revenue growth of 2.82% year-on-year to RMB 265.973 billion in 1H24, with service revenue increasing by 4.3% to RMB 246.235 billion, surpassing the industry average of 3.2% [3]. - The net profit attributable to shareholders reached RMB 21.812 billion, reflecting an 8.23% year-on-year growth, indicating a consistent upward trend in profitability [3]. - The company plans to distribute an interim dividend of RMB 0.1671 per share, enhancing shareholder returns [3]. - The projected net profit for 2024-2026 is RMB 337 billion, RMB 373 billion, and RMB 411 billion, respectively, with a target price of RMB 7.47 for A-shares and HKD 5.61 for H-shares based on a 1.5x and 1.03x 2024 PB valuation, respectively [3][6]. Summary by Sections Financial Performance - In 1H24, mobile communication revenue grew by 3.6% to RMB 1,052.17 billion, with an ARPU of RMB 46.3, slightly up from RMB 46.2 in 1H23 [4]. - The penetration rate of 5G users reached 54.5%, and value-added service revenue increased by 17% to RMB 181 billion [4]. - Fixed-line and smart home services revenue rose by 3.2% to RMB 639.93 billion, with broadband ARPU at RMB 48.3 [4]. Profitability and Efficiency - The net profit margin improved by 0.46 percentage points to 8.26%, and ROE increased by 0.2 percentage points to 4.8% due to enhanced operational efficiency through AI applications [5]. - The company maintained effective investment strategies, with depreciation and amortization expenses rising by 3.5% to RMB 49.5 billion [5]. Growth Potential - The company is positioned as a key player in domestic digital infrastructure, with a strong outlook for growth in the digitalization sector [6]. - The projected revenue for 2024-2026 is RMB 544 billion, RMB 576 billion, and RMB 604 billion, respectively, indicating a robust growth trajectory [12].