CHINA TELECOM(601728) 民生证券·2025-03-26 12:43Investment Rating - The report maintains a "Recommended" rating for China Telecom, with a target price of 7.57 CNY [7][4]. Core Views - China Telecom's revenue for 2024 is projected at 523.6 billion CNY, reflecting a year-on-year growth of 3.1%, while the net profit attributable to shareholders is expected to reach 33 billion CNY, up 8.4% year-on-year [1][4]. - The company is experiencing steady growth in its core business, with mobile communication service revenue reaching 202.5 billion CNY, a 3.5% increase year-on-year, and a net increase of 16.75 million mobile users, bringing the total to 425 million [2][4]. - The digital industry segment is showing strong growth, with revenue from industrial digitalization reaching 146.6 billion CNY, a 5.5% increase year-on-year, and cloud services revenue growing by 17.1% to 113.9 billion CNY [3][4]. Summary by Sections Financial Performance - In 2024, operating cash flow is reported at 145.3 billion CNY, up 4.8% year-on-year, and free cash flow has significantly increased by 70.7% to 22.2 billion CNY [1][4]. - The company’s capital expenditure for 2024 is 93.5 billion CNY, a decrease of 5.4% compared to the previous year, with a focus on mobile network and industrial digitalization investments [4]. Business Segments - Mobile communication services revenue is driven by the upgrade to 5G-A and the introduction of AI-enhanced applications, with mobile ARPU reaching 45.6 CNY, a slight increase of 0.4% [2][4]. - The smart home services segment has also shown growth, with revenue increasing by 16.8% year-on-year [2][4]. Future Outlook - The report forecasts continued growth in revenue and profit for the next three years, with net profit expected to reach 35.9 billion CNY in 2025, reflecting a growth rate of 9% [4][6]. - The dividend payout ratio is set to increase to over 75% in the next three years, with a dividend of 0.2598 CNY per share for 2024 [4].