Great Wall Securities·2025-08-01 10:34Investment Rating - The report maintains a "Buy" rating for China Telecom, expecting the stock price to outperform the industry index by more than 15% in the next six months [5][18]. Core Viewpoints - China Telecom is upgrading its corporate strategy to embrace artificial intelligence (AI) and enhance its cloud services, transitioning from "cloud transformation" to "intelligent cloud transformation" [2][3]. - The company is leveraging its cloud-network integration to offer comprehensive computing and networking services, aiming to reduce costs and improve efficiency [2]. - China Telecom has established the "AI Investment Alliance" to support foundational technology research and industry application projects, indicating a commitment to innovation and collaboration [3]. Financial Summary - Revenue Forecast: Expected revenues for 2025, 2026, and 2027 are projected at 545.0 billion, 570.7 billion, and 598.0 billion yuan respectively, with growth rates of 4.1%, 4.7%, and 4.8% [3]. - Net Profit Forecast: The net profit attributable to the parent company is forecasted to be 35.1 billion, 36.9 billion, and 38.7 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 6.5%, 5.1%, and 4.9% [3]. - Earnings Per Share (EPS): EPS is projected to increase from 0.38 yuan in 2025 to 0.42 yuan in 2027 [3]. - Valuation Ratios: The price-to-earnings (P/E) ratio is expected to decrease from 19.0 in 2025 to 17.2 in 2027, while the price-to-book (P/B) ratio is projected to decline from 1.4 to 1.3 over the same period [3].