The telecommunication sector rose against the market trend. As of the time of writing, China United Network Communications (00762) increased by 3.15%, trading at 9.51 HKD; CHINA MOBILE (00941) rose by 1.95%, trading at 88.4 HKD; CHINA TELECOM (00728) increased by 1.58%, trading at 5.78 HKD.
According to Zhito Finance APP, the Telecommunication Sector rose against the trend, as of publication, China United Network Communications (00762) rose by 3.15%, reporting 9.51 HKD; CHINA MOBILE (00941) rose by 1.95%, reporting 88.4 HKD; CHINA TELECOM (00728) rose by 1.58%, reporting 5.78 HKD.
On the news front, the Ministry of Industry and Information Technology recently released the economic operation of the communications industry for the first four months before 2025. In the first four months, China's communications industry operated steadily with an upward trend, with cumulative telecommunication business revenue reaching 598.5 billion yuan, a year-on-year increase of 1%. Thanks to the month-on-month acceleration of DOU growth this year, and the DOU growth rate in April (14.6% year-on-year) reached a new monthly high since 2024, revenue from telecommunication business in April rebounded (151.6 billion yuan that month, a year-on-year increase of 2.0%).
Goldman Sachs released a Research Report stating that the dividend yield of telecommunication operators is becoming increasingly attractive. The firm expects that Chinese telecommunication operators will maintain abundant free cash flow to support long-term sustainable dividend growth; from 2025 to 2027, the three major telecommunication operators will be able to use all of their net income for dividends, and the guidance from telecommunication operators also indicates that the dividend payout ratio will increase year by year. Therefore, the firm believes that the dividend discount model is suitable for assessing the long-term valuation of telecommunication operator stocks. Their analysis based on the latest dividend per share and risk-free interest rate forecasts indicates that the current stock prices of telecommunication operators have an upside potential of 19%-32%.
