DBS cuts target for China Telecom stock to HKD 5.70

Published on 10/08/2026 at 12:27 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

First-half revenue fell 3.90 percent to RMB 259.0 billion in 2026. China Telecom stock stands at HKD 4.53 before October 23 results.

China Telecom, CNE1000002V2, Illustration mit AI erstellt.

DBS had cut its target for China Telecom from HKD 5.90 to HKD 5.70 in a report dated September 17, 2026, while retaining a Buy recommendation, according to DBS. The revision followed China Telecom's first-half 2026 results and a shift toward intelligence services and computing infrastructure.

AI revenue offsets telecom pressure

China Telecom reported operating revenue of RMB 259.0 billion for the first half of 2026, down 3.90 percent year over year, while net profit attributable to shareholders fell 14.90 percent to RMB 19.59 billion, according to Futunn on September 28, 2026.

The earnings mix was more constructive in newer businesses. Intelligence revenue rose 7.10 percent year over year to RMB 31.10 billion in the first half, according to FilingReader on September 11, 2026. Free cash flow increased 121.30 percent year over year to RMB 28.93 billion, giving the company more room to fund its digital investment.

Cash flow supports the transition

Computing infrastructure is becoming a larger capital priority. DBS said computing network spending reached RMB 15.40 billion in the first half of 2026, up 97.00 percent year over year, and represented 48.00 percent of total capital expenditure.

The dividend provides a counterweight to the weaker headline profit. China Telecom declared an interim dividend of RMB 0.1606 per share for the six months ended June 30, 2026, equal to a 75.00 percent payout ratio, according to FilingReader. The combination of falling legacy revenue and faster intelligence growth leaves the October results with two competing signals.

October results set the next test

China Telecom's Hong Kong listing stood at HKD 4.53 on October 7, 2026, with the 52-week range at HKD 4.24 to HKD 6.08. Investing.com identifies the Hong Kong ticker as 0728 and lists October 23, 2026 as the next earnings date.

For investors, the key comparison is clear: a 14.90 percent first-half profit decline contrasts with 121.30 percent free cash flow growth and 7.10 percent intelligence revenue growth. The October report will show whether the newer businesses can offset pressure in the traditional communications base.