CHINA TELECOM(601728) China Post Securities·2024-05-27 06:30Investment Rating - The report initiates coverage with a "Buy" rating for the company [5][6]. Core Views - The company demonstrates stable growth in traditional business while rapidly advancing in industrial digitalization. In 2023, the company's operating revenue reached 507.84 billion yuan, a year-on-year increase of 6.92%, and the net profit attributable to shareholders was 30.45 billion yuan, up 10.34% year-on-year [4][5]. - The company is expected to maintain a steady increase in its dividend payout ratio, with cash distributions projected to grow to over 75% of the profit attributable to shareholders within three years starting from 2024 [5]. - The first quarter of 2024 shows positive operational performance, with mobile communication service revenue of 52.23 billion yuan, a year-on-year increase of 3.20% [5]. Summary by Sections Company Overview - Latest closing price: 5.94 yuan - Total shares: 915.07 million, circulating shares: 195.90 million - Total market capitalization: 543.6 billion yuan, circulating market capitalization: 116.4 billion yuan [1][2]. Financial Performance - In 2023, the company achieved operating revenue of 507.84 billion yuan, with a growth rate of 6.92%. The net profit attributable to shareholders was 30.45 billion yuan, reflecting a growth of 10.34% [4][6]. - For 2024, the company forecasts operating revenue of 544.04 billion yuan, with a growth rate of 7.13% [6][7]. Key Business Segments - Mobile communication service revenue reached 195.7 billion yuan in 2023, growing by 2.40%. The number of mobile users increased by 16.59 million, totaling 408 million users [5]. - The revenue from fixed-line and smart home services was 123.1 billion yuan, up 3.80% year-on-year, with broadband users increasing by 9.26 million to 190 million [5]. Capital Expenditure and Investment - The company completed capital expenditures of 98.8 billion yuan in 2023, with a forecast of 96 billion yuan for 2024, focusing on new business and industrial digitalization [5][6]. - Cloud and computing investments are expected to reach 18 billion yuan, with a computing scale of 11 EFLOPS [5]. Profitability Forecast - The projected net profit attributable to shareholders for 2024-2026 is 32.90 billion, 35.87 billion, and 39.08 billion yuan, respectively, with growth rates of 8.05%, 9.04%, and 8.96% [5][6].