The Zhitong Finance App learned that Lyon released a research report stating that China Telecom (00728) will reduce the net profit forecast for 2026-28 by 20% to 21%, and lower the target price of H shares from HK$6 to HK$5.2, implying a dividend rate of about 5%. Maintain the “outperform the market” rating. Telecom's performance in the first half of 2026 was disappointing. Total revenue fell 4% year on year to RMB 260.47 billion (same below), and net profit fell 15.8% year on year to RMB 19.4 billion, dragged down by mature mobile and fixed network markets, as well as the increase in VAT rates.

According to the report, intelligent business (computing power, models and applications) has become a new growth engine, increasing 7.1% year over year to 31.1 billion yuan, accounting for 12% of total revenue, but requires higher capital expenditure. The interim dividend was $0.1606 per share, down 8.8% year over year, although the dividend ratio increased to 75%.

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