The Zhitong Finance App learned that Goldman Sachs released a research report stating that China Telecom (00728)'s guidelines for maintaining steady revenue growth and improving net profit margins will continue to focus on improving the quality of growth and efficiency. Due to lower capital expenditure, the company will be in a strong cash flow position to meet its dividend payment targets. The report gave a buy rating, with a target price of HK$5.1.

According to the report, judging from the business sector, industrial digitalization will continue to be the main driving force for growth this year. The company will continue to benefit from emerging digital projects in China and the increase in cloud share; management will continue to take advantage of the company's network, cloud, artificial intelligence, and application integration to expand the customer base and project value. In terms of traditional telecommunications services, the Group will increase mobile service revenue (ARPU) per household by providing more value-added services to each customer. Both mobile and broadband ARPU showed an upward trend in the first quarter compared to the level of the whole of 2023.

The bank indicated that China Telecom's target group's net profit will grow faster than revenue, driven by fee/cost controls and operating leverage. Management expects the decline in EBITDA profit margins to slow further this year, mainly due to increased R&D investment and the company's active expansion and development of products for new businesses such as the cloud, artificial intelligence, and the industrial Internet.