中国电信：服务收入增长超预期，移动ARPU稳健增长

Investment Rating - The report maintains a "Buy" rating for China Telecom with a target price of HKD 6.0, indicating a potential upside of 31% from the current price of HKD 4.6 [2][3]. Core Insights - China Telecom's service revenue growth exceeded expectations, achieving RMB 268 billion in revenue for H1 2024, a year-on-year increase of 2.8%, with service revenue at RMB 246.2 billion, up 4.3% year-on-year [2]. - The company emphasizes shareholder returns, maintaining a dividend payout ratio of 70%, with plans to increase this to over 75% within three years [2]. - The mobile ARPU (Average Revenue Per User) showed steady growth, reaching RMB 46.3, a slight increase of 0.2% year-on-year, while broadband ARPU was RMB 48.3, also up 0.2% year-on-year [2]. - The company is focusing on digital transformation, with digital revenue accounting for 30% of service revenue, and cloud services revenue growing by 20.4% year-on-year [2]. - Capital expenditures are projected to be around RMB 96 billion for the year, with a capital expenditure to revenue ratio expected to remain below 20% [2]. Summary by Sections Financial Performance - For H1 2024, EBITDA was RMB 76.8 billion, reflecting a year-on-year increase of 4.7%, and net profit reached RMB 21.8 billion, up 8.2% year-on-year [2]. - The company forecasts revenue growth rates of 4.4%, 4.2%, and 3.9% for 2024, 2025, and 2026 respectively, with net profit growth rates of 9.0%, 8.8%, and 8.2% for the same years [3]. Market Position - China Telecom continues to lead in mobile and broadband ARPU growth compared to industry peers, indicating a strong competitive position [2]. - The company is actively expanding its 5G network, with over 1.31 million 5G base stations built, ensuring coverage in towns and above nationwide [2]. Future Outlook - The report expresses optimism about China Telecom's role in national digital infrastructure development and its potential for future growth, particularly in cloud computing and AI applications [2].