CHINA TELECOM (00728.HK) +0.110 (+2.326%) Short selling $44.69M; Ratio 13.799% opened 0.85% higher this morning (21st), with gains widening to 3.07% in early trading at HKD4.875. Turnover reached 33.1965 million shares, involving HKD161 million.

M Stanley said in a report that CHINA TELECOM's 2Q service revenue fell 2.4% YoY to RMB121.4 billion. Excluding the impact of value-added tax, revenue growth in 1H remained broadly stable. 2Q EBITDA declined 7.7% YoY. Net profit dropped 13.5%, but was considered solid after excluding the value-added tax impact. Interim dividend was RMB0.1606 per share, down 11% YoY, implying the payout ratio rose 3 ppts to 75%. Operating cash flow increased 30% YoY to RMB61.4 billion, indicating strong cash recovery. Even though computing power-related capital expenditure surged 97% YoY, total capital expenditure during the period rose only 5.3% YoY. M Stanley gave CHINA TELECOM H shares an "Equalweight" rating with a TP of HKD5.

UBS said in a report that CHINA TELECOM's 2Q service revenue fell 5.6% YoY to RMB117 billion, 4% below its forecast. EBITDA fell 7.7% YoY to RMB40.5 billion, in line with expectations, while net profit declined 13.5% YoY to RMB12.2 billion, 2% above its forecast. CHINA TELECOM for the first time separated intelligent revenue from communications revenue, with intelligent revenue rising 7.1% YoY in 1H and accounting for 12.8% of total revenue, up 1.1 ppts, mainly driven by AI cloud and AIDC. Management expects growth to accelerate further in 2H. Total revenue from core businesses in 1H fell 2.1% YoY, but remained stable excluding the impact of value-added tax. UBS said that although the revenue decline was disappointing, net profit remained resilient. Management's positive outlook on future margins and returns on intelligent business investments should help reinforce investor confidence. UBS maintained a "Neutral" rating on CHINA TELECOM H shares with a TP of HKD5.1.

Citi said CHINA TELECOM's 2Q revenue fell 5% YoY to RMB128.5 billion, missing both its own and market expectations by 5%. EBITDA reached RMB40.5 billion, 4% above Citi's forecast but in line with market expectations. Net profit fell 14% to RMB12.2 billion, exceeding Citi and market forecasts by 14% and 4%, respectively. Interim dividend fell 11.4% YoY to RMB0.1606 per share, a smaller decline than net profit due to a 3-ppts increase in payout ratio to 75%, reflecting management's emphasis on enhancing shareholder returns.

At the investor meeting, Citi quoted management as saying that the scale of the AI/token economy is expanding rapidly, while AI capital expenditure remains "moderately front-loaded". Computing power revenue rose 50% YoY and AIDC revenue increased 9.3% YoY. Despite pressure on revenue growth from the value-added tax impact and a saturated telecommunications market, Citi reiterated its "Buy" rating on CHINA TELECOM H shares with a TP of HKD5.7, noting that the dividend yield of 6.3% remains attractive. (da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-20 16:25.)