Great Wall Securities·2024-09-04 06:44Investment Rating - The report maintains a "Buy" rating for China Telecom, expecting the stock price to outperform the industry index by over 15% in the next six months [4][14]. Core Views - China Telecom is entering a new phase in its Tianyi Cloud services, with applications blooming across multiple areas, driving ARPU growth. The company is focusing on technology innovation and maintaining high capital expenditure to support emerging strategic businesses [2][8]. - The company has achieved stable growth in its core business, with significant increases in mobile communication service revenue and value-added services [2]. - The report forecasts revenue growth from 2024 to 2026, projecting revenues of CNY 560.71 billion, CNY 623.90 billion, and CNY 697.52 billion, respectively, along with net profits of CNY 33.87 billion, CNY 38.10 billion, and CNY 43.45 billion [8]. Financial Performance Summary - In the first half of 2024, China Telecom reported a revenue of CNY 266 billion, a year-on-year increase of 2.8%, and a net profit of CNY 21.8 billion, up 8.2% year-on-year [1]. - The company’s mobile ARPU reached CNY 46.3, a slight increase of 0.2% year-on-year, while mobile value-added and application revenue grew by 17.1% to CNY 18.1 billion [2]. - The Tianyi Cloud revenue for the first half of 2024 was CNY 55.2 billion, reflecting a growth of 20.4% year-on-year [2]. Capital Expenditure and Shareholder Returns - In the first half of 2024, the company completed capital expenditures of CNY 47.2 billion, with a completion rate of 49%, focusing on 5G network coverage and digital business support [2]. - The interim dividend per share was set at CNY 0.1671, a 16.7% increase year-on-year, with a payout ratio of 70%, up 5 percentage points [3].