UBS: Raises China Telecom Corporation (00728) target price to HK$5.7, maintains "Buy" rating

UBS issued a research report stating that it has raised the target price for China Telecom Corporation (00728) by 1.8%, from HK$5.6 to HK$5.7, while maintaining a "Buy" rating. The bank slightly adjusted its net profit forecasts for 2026 to 2028 by 0% to 2%, and extended the valuation period of its discounted cash flow (DCF) model backward by 3 months. China Telecom Corporation's revenue for the third quarter of 2026 was RMB 121.9 billion, down 2.9% year-on-year; EBITDA was RMB 33.7 billion, down 3.9% year-on-year; net profit was RMB 6.6 billion, down 14.7% year-on-year. The declines in revenue and EBITDA narrowed compared with the second quarter, while the decline in net profit remained broadly stable. Management did not change the company's guidance. Management previously guided that revenue, EBITDA, and net profit excluding the impact of VAT will grow steadily in 2026; the full-year dividend payout ratio will remain flat at 75% as in 2025, while capital expenditure intensity will continue to decline.