China Telecom Corporation Limited (China Telecom, 00728) released its unaudited results for the three months ended 31 March 2026, showing softer top-line growth and lower profitability despite tighter cost control and continued expansion in 5G and cloud services.
Financial Performance • Operating revenue fell 2.6% year on year (YoY) to RMB 131.97 billion, while service revenue contributed RMB 122.70 billion. • EBITDA declined to RMB 33.90 billion, translating into an EBITDA margin of 27.6%. • Profit attributable to equity holders decreased 17.1% YoY to RMB 7.35 billion, with basic earnings per share at RMB 0.08. • Operating expenses contracted 0.7% YoY to RMB 123.82 billion; depreciation and amortisation edged down 1.0% to RMB 25.72 billion, and network operations and support costs fell 1.5% to RMB 39.32 billion. Personnel expenses rose 1.6% to RMB 28.66 billion.
Balance-Sheet Snapshot (31 Mar 2026) • Total assets reached RMB 879.08 billion, up 1.0% from end-2025. • Equity attributable to shareholders increased 1.6% to RMB 468.33 billion. • Total liabilities were broadly stable at RMB 403.20 billion, resulting in a net debt position of RMB 7.85 billion (short- and long-term interest-bearing debt minus cash and equivalents).
Cash Flow • Net cash from operating activities rose sharply to RMB 23.06 billion (Q1 2025: RMB 10.33 billion), aided by working-capital movements. • Investing outflows widened slightly to RMB 31.22 billion, driven by capital expenditure of RMB 14.69 billion and increased purchase of investments. • Financing activities used RMB 7.52 billion, mainly reflecting lease-liability repayments and a net reduction of group deposits at the finance subsidiary. • Cash and cash equivalents closed the quarter at RMB 45.66 billion, down from RMB 61.39 billion at the start of the year.
Operational Highlights • Mobile subscribers reached 440.55 million, adding 1.90 million in Q1 2026 versus 4.95 million a year earlier. • 5G subscribers rose to 314.13 million, with 12.32 million net adds; 5G penetration increased to 71.3%. • Handset data traffic grew 17.7 % YoY; average handset DOU climbed 12.6 % YoY to 23 GB. • Wireline broadband subscribers edged up to 201.56 million, net adds of 0.44 million. Gigabit broadband penetration reached about 34%. • Strategic emerging businesses continued to expand: China Telecom Cloud revenue advanced 6.8 % YoY, while intelligent-service revenue surged 39.4 %.
Cost Management Targeted efficiency measures and AI-driven resource optimisation supported a 1.5 % drop in network operations expenses and muted depreciation charges; however, higher personnel costs partly offset these gains.
Strategic Direction Management reaffirmed the “Cloudification, Digital Transformation and AI for Good” roadmap, with an ambition to become a leading AI service provider and to enhance competitiveness through token-based services and integrated digital offerings.
Cautionary Note The disclosed figures are based on unaudited management accounts. Investors should exercise caution when interpreting the data.
Comments