China Telecom stock reports a 14.9 percent profit drop

Published on 09/30/2026 at 18:35 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

China Telecom stock generated RMB260.5 billion in first-half revenue, with core pressure offset by faster intelligence growth. Free cash flow rose 121.3 percent.

China Telecom, CNE1000002V2, Illustration mit AI erstellt.

China Telecom stock reports a 14.9 percent drop in first-half 2026 net profit to RMB19.6 billion, while the company’s newer intelligence business continued to expand. The results show a sharper divide between weaker traditional communications and faster-growing artificial intelligence services.

Revenue pressure meets AI growth

According to FilingReader on September 11, 2026, operating revenue reached RMB260.5 billion for the six months ended June 30, 2026, down 4.0 percent year over year. Revenue from principal businesses stood at RMB244.1 billion, while intelligence revenue rose 7.1 percent to RMB31.1 billion.

The mix shift is material for investors because intelligence revenue represented 12.8 percent of principal business revenue in the first half. Communications revenue declined 3.3 percent to RMB213.0 billion, making the newer business the clearest quantified growth offset in the interim report.

Cash flow supports investment

FilingReader reported that free cash flow increased 121.3 percent year over year to RMB28.9 billion in the first half of 2026. The board also declared an interim dividend of RMB0.1606 per share, representing a 75 percent payout of profit attributable to equity holders.

DBS highlighted the same tension in its September 17, 2026 research update. DBS cut its target from HKD5.9 to HKD5.7 and retained a Buy rating after reducing its 2026 to 2028 earnings forecasts by 6.1 percent, 6.7 percent and 7.9 percent, respectively. The bank cited the VAT reclassification and softer traditional business growth as the main pressure points.

China Telecom keeps its payout focus

China Telecom maintained its 2026 targets for stable comparable-basis growth in principal business revenue, EBITDA and net profit, alongside rapid intelligence revenue growth, according to DBS on September 17, 2026. Its long-term target is for intelligence revenue to exceed 20 percent of principal business revenue, compared with 12.8 percent in the first half.

The key test is whether intelligence growth can compensate for the decline in legacy communications while the company continues directing capital toward computing infrastructure. That balance links the 14.9 percent profit decline with the 121.3 percent free cash flow increase.

Interim dividend reaches RMB0.1606

China Telecom declared an interim dividend of RMB0.1606 per share for the six-month period ended June 30, 2026. The company’s next phase therefore combines a higher-value intelligence strategy with a still substantial shareholder distribution.