Citi Keeps Buy Rating on China Telecom, Target Price HK$5.7, Q3 Net Profit Misses Expectations

Stock News10-23

Citi has issued a research report stating that China Telecom (00728) posted third-quarter 2026 net profit that fell short of expectations, although EBITDA came in ahead of forecasts, reflecting lower-than-expected non-operating items and a recorded fair value loss in the quarter. The bank maintains its Buy rating on China Telecom with a target price of HK$5.7.

China Telecom's third-quarter revenue came in at RMB 121.931 billion, down 3% year-on-year, broadly in line with the bank's and market expectations. EBITDA reached RMB 33.682 billion, down 4% year-on-year, but came in 4% and 1% above the bank's and market forecasts, respectively. The EBITDA margin stood at 27.6%, exceeding the bank's and market estimates by 1.3 percentage points and 0.4 percentage points, respectively.

The bank noted that China Telecom's third-quarter net profit was RMB 6.62 billion, down 15% year-on-year, missing the bank's and market expectations by 4% and 2%, respectively. The divergence between the better-than-expected EBITDA and the weaker-than-expected net profit reflects lower-than-anticipated non-operating items and a recorded fair value loss in the third quarter.

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