Core Viewpoint - The company reported a slight revenue growth of 0.6% year-on-year for the first three quarters of 2025, with a total revenue of 394.3 billion yuan, and a net profit increase of 5.0% to 30.8 billion yuan, indicating a stronger profit growth compared to revenue growth [1][2]. Financial Performance - Revenue for the first three quarters of 2025 reached 394.3 billion yuan, with service revenue at 366.3 billion yuan, reflecting a year-on-year increase of 0.6% and 0.9% respectively [2]. - The net profit attributable to the parent company was 30.8 billion yuan, up 5.0% year-on-year, while the non-recurring net profit remained stable at 28.7 billion yuan [1][2]. - In Q3 2025, the company reported a revenue of 124.8 billion yuan, a decrease of 0.91% year-on-year, and a net profit of 7.76 billion yuan, which is an increase of 3.60% year-on-year [2]. Business Growth - The company experienced significant growth in new business areas, with 5G network users reaching 290 million, a penetration rate of 66.9%, and gigabit broadband user penetration at approximately 31.0% [2]. - IDC revenue grew by 9.1% year-on-year to 27.5 billion yuan, while security revenue increased by 12.4% to 12.6 billion yuan. Other notable growth areas included smart revenue (62.3% increase), video network revenue (34% increase), satellite communication revenue (23.5% increase), and quantum revenue (134.6% increase) [2]. Cost and Cash Flow - In Q3 2025, the company's expense ratios were as follows: sales (10.40%), management (6.90%), finance (0.13%), and R&D (3.48%), with respective year-on-year changes of +0.98 percentage points, -0.28 percentage points, -0.08 percentage points, and +0.24 percentage points [3]. - The net cash flow from operating activities was 87.3 billion yuan, with a year-on-year decline narrowing to 10.37% [3].

Market Overview - On October 22, the Shanghai Composite Index fell by 0.07%, the CSI 300 decreased by 0.33%, the STAR Market 50 dropped by 0.06%, the CSI 1000 declined by 0.43%, the ChiNext Index fell by 0.79%, and the Hang Seng Index decreased by 0.94% [4] - The best-performing sectors on October 22 were Oil & Petrochemicals (+1.58%), Banking (+0.97%), Home Appliances (+0.82%), Real Estate (+0.75%), and Media (+0.59%). The worst-performing sectors were Non-ferrous Metals (-1.36%), Power Equipment (-1.29%), Agriculture, Forestry, Animal Husbandry and Fishery (-1.19%), Defense and Military Industry (-1.17%), and Coal (-1.03%) [4] - The total trading volume of the A-share market on October 22 was 1,690.3 billion yuan, with a net inflow of 10.018 billion Hong Kong dollars from southbound funds [4] Company Analysis: China Telecom (601728) - On October 21, 2025, China Telecom released its third-quarter report, showing a revenue growth of 0.6% year-on-year for the first three quarters, with service revenue increasing by 0.9% and net profit attributable to shareholders rising by 5.0% [5] - In the third quarter alone, revenue decreased by 0.9% year-on-year, while service revenue grew by 0.5%. Revenue from terminal products fell by 18.0%, but this had a limited impact on profits. New businesses such as AI computing power continued to grow rapidly [5] - IDC revenue increased by 9.1% year-on-year, with a notable acceleration in growth compared to the first half of 2025 (+7.4%). Smart revenue surged by 62.3%, satellite communication revenue grew by 23.5%, and quantum revenue skyrocketed by 134.6% [5] - Investment opportunities are highlighted by the dual attributes of dividends and computing power, with AI driving increased demand for computing power [5]

Core Insights - China Telecom (601728.SH) reported a revenue of RMB 394.3 billion for the first three quarters of 2025, reflecting a year-on-year growth of 0.6% [1] - The net profit attributable to shareholders for the same period was RMB 30.8 billion, showing a year-on-year increase of 5% [1] - In Q3 2025, the company recorded a revenue of RMB 124.8 billion, which is a decline of 0.91% year-on-year, while the net profit for this quarter was RMB 7.756 billion, up by 3.6% year-on-year [1] Revenue Breakdown - The revenue from new strategic businesses continued to expand, with IDC revenue reaching RMB 27.5 billion, a year-on-year growth of 9.1% [1] - Security revenue amounted to RMB 12.6 billion, marking a year-on-year increase of 12.4% [1] - Smart revenue saw a significant year-on-year growth of 62.3% [1] - Video Internet revenue increased by 34.2% year-on-year [1] - Satellite communication revenue grew by 23.5% year-on-year [1] - Quantum revenue experienced a remarkable year-on-year increase of 134.6% [1]

Core Insights - The core viewpoint of the articles indicates that China Telecom's revenue has slightly decreased while net profit has increased, driven mainly by non-operating items, and highlights the contrasting performance between emerging and traditional businesses [1][3][4]. Financial Performance - In Q3 2025, China Telecom reported a revenue of 1248.48 billion RMB, a year-on-year decrease of 0.91% [1][2]. - The net profit attributable to shareholders increased by 3.60% to 77.56 billion RMB, primarily driven by non-operating projects [1][2]. - For the first three quarters of 2025, total revenue reached 394.27 billion RMB, a growth of 0.59% year-on-year, while net profit was 307.73 billion RMB, up 5.03% [2]. User Growth - The company added 12.67 million mobile users and 3.05 million broadband users in the first three quarters of 2025 [1][4]. - The total number of mobile users reached 437 million, with a 5G penetration rate of 66.9% [4]. - The net increase in mobile users was lower than the previous year's 14.90 million, and broadband user growth also slowed significantly from 6.10 million to 3.05 million [4]. Emerging Business Growth - Emerging businesses are identified as the main growth driver, with significant increases in revenue from strategic new businesses [3]. - IDC business revenue reached 27.5 billion RMB, growing by 9.1%, while security business revenue was 12.6 billion RMB, up 12.4% [3]. - "Smart revenue" surged by 62.3%, IoT revenue grew by 34.2%, and quantum revenue doubled with a growth of 134.6% [3]. Cost Control and R&D Investment - The company maintained effective cost control, with operating costs rising only 0.1% to 274.8 billion RMB [6]. - Sales expenses decreased by 1.4%, optimizing the expense structure [6]. - R&D expenses increased by 4.4% to 9.1 billion RMB, focusing on key technologies related to network, cloud, AI, and quantum security [6].

Core Viewpoint - The company is accelerating the construction of a national integrated quantum security infrastructure and has launched over 40 quantum+ product scenario solutions in various sectors, including government, law enforcement, education, and industry [1] Group 1: Quantum Security Infrastructure - The company is focusing on building a national integrated quantum security infrastructure [1] - Over 40 quantum+ product scenario solutions have been introduced across multiple sectors [1] Group 2: Financial Performance - The company's security products have experienced rapid growth, with cloud revenue increasing by 52.7% year-on-year [1] - Revenue from cloud services has doubled compared to the previous year [1] - The quantum business revenue has seen a year-on-year increase of 171% [1]

Investment Rating - The report maintains a "Recommended" rating for China Telecom, indicating a positive outlook for the company's growth and performance [4][6]. Core Views - The company demonstrates stable operations with a focus on developing new business areas such as AI, satellite communication, and quantum technology, which are expected to drive long-term value growth [2][4]. - The first quarter of 2025 saw a slight increase in service revenue, with a year-on-year growth of 0.3% and a quarter-on-quarter growth of 4.6% [2]. - The company is strategically enhancing its cloud-network integration and leveraging advanced technologies to create a competitive edge in the market [4]. Summary by Sections Financial Performance - In Q1 2025, China Telecom reported total revenue of 134.5 billion yuan, a year-on-year increase of 0.01%, and a net profit attributable to shareholders of 8.9 billion yuan, up 3.1% [1]. - The service revenue for Q1 2025 reached 124.7 billion yuan, with mobile communication users increasing to 429 million, adding 4.95 million users [2]. Business Segments - The mobile communication segment showed robust growth, with 5G users reaching 270 million and a penetration rate of 62% [2]. - Emerging business areas such as IDC, smart services, satellite communication, and quantum technology have seen significant growth rates, with smart services growing by 151.6% year-on-year [2]. Cost Management and R&D - The company optimized its cost structure, with operating costs decreasing by 0.08% year-on-year, leading to a slight increase in gross margin to 29.47% [3]. - Increased R&D investment is focused on network, cloud, AI, and quantum security, reflecting the company's commitment to innovation [3]. Future Projections - The forecast for net profit attributable to shareholders for 2025-2027 is projected at 35.9 billion, 38.9 billion, and 42.1 billion yuan, respectively, with corresponding PE ratios of 20, 18, and 17 [4][5].