Citi: Maintains "Buy" rating on China Telecom Corporation (00728), target price HK$5.7; third-quarter net profit below expectations

Citi issued a research report stating that China Telecom Corporation (00728)'s net profit for the third quarter of 2026 was below expectations, but EBITDA performance was better than expected, reflecting lower-than-expected non-operating items and a recorded fair value loss in the third quarter. The bank maintains its "Buy" rating on China Telecom Corporation with a target price of HK$5.7. China Telecom Corporation's third-quarter revenue was RMB 121.931 billion, down 3% year-on-year, broadly in line with the bank's and market expectations; EBITDA was RMB 33.682 billion, down 4% year-on-year, but 4% and 1% above the bank's and market expectations, respectively, with an EBITDA margin of 27.6%, 1.3 percentage points and 0.4 percentage points above the bank's and market expectations, respectively. The bank noted that China Telecom Corporation's third-quarter net profit was RMB 6.62 billion, down 15% year-on-year, 4% and 2% below the bank's and market expectations, respectively. The divergence between better-than-expected EBITDA and weaker-than-expected net profit reflects lower-than-expected non-operating items and a recorded fair value loss in the third quarter.