CICC has reaffirmed its "outperform" rating on CHINA TELECOM (00728) with a target price of HK$6.3, implying potential upside of 28.8% from the current level. The valuation corresponds to price-to-earnings ratios of 17.8 times and 17.2 times for 2024 and 2025, respectively. For China Telecom Corporation Limited (601728.SH), the firm also maintained an "outperform" rating with a target price of RMB 7.3, representing 24.8% upside and P/E multiples of 23.1 times and 22.7 times for the same periods. The assessments are based on the company's active push toward intelligent upgrades in core services, rapid AI-driven revenue growth, and a sum-of-the-parts valuation approach.

CHINA TELECOM reported full-year 2025 revenue of RMB 523.925 billion, up 0.07% year-on-year, in line with market expectations. Net profit attributable to shareholders increased 0.52% to RMB 33.185 billion, falling short of market projections due to higher-than-expected non-operating expenses. In the fourth quarter of last year, revenue declined 1.48% to RMB 129.655 billion, while net profit dropped 35.06% to RMB 2.411 billion.

Taking into account the impact of value-added tax adjustments and slower growth in industrial digital revenue, CICC lowered its 2026 net profit forecast for CHINA TELECOM by 5.8% to RMB 28.9 billion. The brokerage also introduced its first net profit estimate for 2027 at RMB 29.4 billion.