Citigroup released a report on the CHINA TELECOM Industry, showcasing strong resilience amidst macroeconomic uncertainties and escalating geopolitical risks, thanks to high dividend yields and robust profitability. The bank's investment preference order among the three major Chinese telecom companies is CHINA TELECOM (00728.HK) > CHINA MOBILE (00941.HK) > CHINA UNICOM (00762.HK). Among them, CHINA TELECOM has the greatest growth potential due to its leading advantages in AI and cloud business, while CHINA MOBILE attracts yield-seeking investors with its high dividend yield, and a cautious view is taken on CHINA UNICOM's overvaluation risk in A-shares.
Citigroup has added forecasts for CHINA MOBILE for the fiscal year 2027 and raised earnings forecasts for 2025 to 2026 by 1% to 2%, mainly benefiting from lower depreciation costs and cost assumptions, despite a slight downward adjustment in revenue forecasts. The Target Price has been raised from 82.3 yuan to 105.1 yuan, maintaining a "Buy" rating. A dividend yield of about 6.4% makes it a solid income investment choice.
Citigroup has added forecasts for CHINA TELECOM for the fiscal year 2027 and raised earnings forecasts for 2025 to 2026 by 1%, reflecting cost and depreciation cost reductions, partially offset by downward adjustments in revenue forecasts. The Target Price has been raised from 5.1 yuan to 7.1 Hong Kong dollars, maintaining a "Buy" rating. Its leading scale in cloud business supports long-term growth.
Citigroup has added forecasts for CHINA UNICOM for the fiscal year 2027, raising the earnings forecast for 2026 by 2%, while the forecast for 2025 remains basically unchanged, reflecting reductions in costs and depreciation expenses. The Target Price has been raised from 6.9 to 11.2 yuan, maintaining a "Buy" rating, with a forecasted dividend yield of about 5.4%.
