The Zhitong Finance App learned that Bank of America Securities released a research report stating that the initial “buy” rating for China Telecom (00728) has a target price of HK$6, while the initial “neutral” rating for A-shares (601728.SH) has a target price of 7.2 yuan. The bank pointed out that China Telecom's H share valuation is attractive, while A shares currently have a 67% premium over H shares, which is higher than the average of 40% over the past year. The bank calculates the target price for H shares based on cash flow discounts and average corporate value multiples (EV/EBITDA), while the target price for A shares is estimated based on an A/H premium of 40%.
Bank of America said that China Telecom is a high-quality telecom provider focusing on enterprise customers, leading the cloud business and integrating the AI ecosystem. As of June 2026, the company has 442 million mobile users and 201 million broadband users. Mobile and home ARPU is resilient, has excellent high-end integration and enterprise monetization capabilities, and provides natural distribution channels for cloud, network security and AI services. During the period, the Group had 118.8 EFLOPS computing power and 8 gigawatts of power capacity, which can benefit from increased demand for cloud and AI infrastructure.
According to the report, China Telecom Cloud's revenue in the first half of the year reached 61.8 billion yuan, up 8% year-on-year, making it a leading operator cloud service provider; intelligent services accounted for 13% of service revenue in the first half of the year, driven by a 95% year-on-year increase in intelligent computing power revenue, and is expected to account for more than 20% by 2030. The Group has established an intelligent cloud ecosystem covering IaaS, PaaS, DaaS and MaaS, including Xiyang's computing power scheduling platform, Star TokenHub platform, TeleAgent, Xinghai data services and industry applications, and has the strongest comprehensive cloud, computing power and network architecture. The bank predicts that the Group's profit per share compound annual growth rate from 2026 to 2028 will be 5.3%, and the dividend ratio will be 75%.