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<Research>HSBC Research Prefers CHINA MOBILE, Downgrades CHINA TELECOM to Hold; CN Telecoms Deliver Divergent 1Q Results
Recommend 24 Positive 50 Negative 36 |
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HSBC Global Research has issued a report reviewing the 1Q26 results of Chinese telecom stocks. While the increase in value-added tax led to a general decline in industry service revenue and net profit, CHINA MOBILE (00941.HK) demonstrated greater resilience than its peers. CHINA MOBILE's 1Q26 service revenue/ EBITDA/ net profit fell by 1.1%/ 4.9%/ 4.2% YoY, in line with expectations. In contrast, net cash flow from operating activities surged by 128% YoY, which the broker believes will provide more room to raise the dividend payout ratio. CHINA TELECOM (00728.HK) reported results below expectations, with service revenue/ EBITDA/ net profit falling 1.6%/ 7.8%/ 17.1%. CHINA UNICOM (00762.HK) delivered mixed results, with service revenue down 0.9%, slightly beating expectations, but EBITDA and net profit missing forecasts. CHINA TOWER (00788.HK) reported 1.5% revenue growth, supported by strong expansion in its smart connectivity and energy businesses. However, EBITDA fell 11.2%, below expectations, while net profit rose 28.8%, in line with forecasts. HSBC Global Research has maintained Buy on CHINA MOBILE but trimmed the TP for its H-shares from HKD95 to HKD94. The broker downgraded CHINA TELECOM from Buy to Hold, cutting the target price from HKD5.9 to HKD5.6. It maintained Reduce on CHINA UNICOM, lowering the target price from HKD6.7 to HKD6.5. CHINA TOWER was kept at Hold, with its target price slightly raised from HKD11.3 to HKD11.4. Auto-translated by AI AASTOCKS Financial News |
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