According to the latest research report released by Nomura, the target price of China Telecom (00728) has been adjusted from HKD 5.1 to HKD 5.8. It is expected that the year-on-year service income in the second quarter of this year will increase by 4% to 5%, while the profit growth will increase by 5% to 7%. It is slower than the first quarter, but maintains a 'buy' rating. The bank believes that potential dividends still have attractiveness for this stock.

The bank believes that China Telecom's service revenue growth in the second quarter will continue to outpace the industry average, benefiting from the stable core business, even though the growth of emerging business sectors such as cloud computing, Internet of Things and international data center may slow down. The bank also pointed out that China Telecom's cloud business may slow down due to the weaker macro environment and high base, but the company is prudently controlling its expenses, which may bring better net profit margins.