China Telecom’s strong results clear market concerns, rating kept at Buy with HK$5.2 target price – Goldman Sachs

 

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Prior to China Telecom’s quarterly result announcement, Goldman Sachs expressed its concerns that the group’s full-year guidance might by lowered amid the decelerating cloud business growth for telecom operators due to the challenging macro environment.

However, China Telecom posted ahead-of-peers service revenue and cloud business growth, with its cloud business revenue surging by 63% year over year to 46 billion yuan in the first half of the year and the second-quarter net profit rose by 10% year over year, in line with expectations.

The strong second-quarter results from China Telecom cleared market concerns on potential short-term weakness and attested the broker’s constructive view on the company, Goldman said. 

The broker kept the estimate of China Telecom’s 2023-25 earnings largely unchanged. The rating on the stock was reiterated at Buy, with its target price kept at HK$5.2.