Guotai Junan believes that the net profit of China Telecom (00728) will continue to grow steadily in the next few years.
The Zhitong Finance App learned that Guotai Junan released a research report stating that China Telecom (00728)'s profit grew steadily in the first quarter, and high-quality development continued to advance. Considering the steady increase in its profits and dividends, as well as the opportunities brought by the rapid development of the cloud business, it maintained a target price of HK$5 for H shares, with a rating of “buy.”
According to the report, China Telecom's service revenue and net profit for the first quarter increased 5% and 7.7% year-on-year respectively, in line with market expectations. Due to the steady growth of the main business and good control of operating expenses, the report believes that the company's net profit will continue to grow steadily in the next few years. The company plans to increase the dividend payout ratio to over 75% within three years from 2024. Therefore, it is believed that dividends will grow steadily over the next few years.