Debon Securities initially rates CHINA TELECOM as 'Buy', anticipating high growth potential for the company in the future.

Debon Securities' Research Reports indicate that CHINA TELECOM's traditional business remains stable, with remarkable results in industrial digitalization. The 'cash cow' provides steady income, and the inclusion of data resources on the balance sheet offers room for valuation improvement. In 2024, the company’s cash dividend is expected to reach 23.8 billion yuan, accounting for 72% of the net income attributable to ordinary Shareholders of the listed company in the consolidated financial statements. The forward-looking layout of next-generation technologies, including quantum and Satellite, is expected to achieve high growth. Based on the comparison of main business operations, CHINA MOBILE and China United Network Communications are chosen as comparable companies, with their average PE multiples from 2025 to 2027 at 16.32 / 15.39 / 14.62. The company's PE is slightly higher than the average level of comparable companies. However, it is believed that the company will fully benefit during the construction process of Satellite Internet, while the forward-looking layout of quantum communication is expected to give the company a certain first-mover advantage in the future technological evolution. High growth potential is anticipated for the company in the future. Initial coverage is provided with a 'Buy' rating.