Goldman Sachs has issued a research note indicating that China's Ministry of Finance and the State Taxation Administration have increased the value-added tax on telecommunications services effective this year. The analysis assumes that telecom operators will not pass the tax burden on to customers in 2026; therefore, the reduction in post-tax revenue will be fully reflected in their profits. The firm established three different scenarios. Under its neutral scenario, it has revised earnings forecasts for CHINA MOBILE (00941) and CHINA TELECOM (00728). The bank maintains its 2025 estimates but has lowered its revenue and net profit forecasts for 2026. Based on the new earnings projections, the current stock prices imply robust expected dividend yields for 2026: 5.1% for China Mobile's A-shares and 6.8% for its H-shares, and 4.2% for China Telecom's A-shares and 5.2% for its H-shares. The report states that in the short term, shares of Chinese telecommunications companies may face pressure as the market absorbs the tax policy changes and the lower profit outlook.