CHINA TELECOM(601728) 山西证券·2024-11-04 09:30Investment Rating - The report maintains a "Buy-A" rating for China Telecom (601728.SH) [1][5] Core Views - The company achieved a revenue of 391.97 billion yuan in Q1-Q3 2024, representing a year-on-year increase of 2.9%. Service revenue grew by 3.8% to 362.89 billion yuan, while net profit attributable to shareholders rose by 8.1% to 29.30 billion yuan [2][5] - The company is optimizing resource allocation and has seen results from cost reduction and efficiency improvement initiatives, with operating costs increasing by only 3.0% year-on-year, a significant decrease from the previous year's 6.1% [3] - The mobile communication service revenue reached 156.82 billion yuan, up 3.2% year-on-year, with a total mobile user base of 423 million, including 345 million 5G users [3][4] Summary by Sections Market Performance - In Q1-Q3 2024, the fixed-line and smart home services revenue was 95.62 billion yuan, up 2.9% year-on-year, with broadband users reaching 196 million and smart home revenue increasing by 17.0% [1][2] Financial Performance - The company reported a net profit of 29.30 billion yuan, with an EPS of 0.32 yuan, reflecting an 8.1% increase year-on-year [2][5] - The EBITDA for the same period was 117.03 billion yuan, indicating a stable growth trajectory [11] Business Segments - The digital industry business revenue was 105.55 billion yuan, growing by 5.8% year-on-year, contributing to 29.1% of service revenue [4][5] - The company continues to enhance its digital transformation strategy, integrating "network + cloud + AI + applications" to meet the growing digitalization demands across various sectors [5] Future Outlook - The company aims for good growth in revenue and EBITDA for the full year, with net profit growth expected to outpace revenue growth. The dividend per share is projected to increase to 0.1671 yuan, a 5% year-on-year rise, with a payout ratio reaching 70% [5] - Profit forecasts for 2024-2026 indicate net profits of 32.52 billion, 34.91 billion, and 36.86 billion yuan, respectively, with corresponding EPS of 0.36, 0.38, and 0.40 yuan [5][7]