China Telecom Corporation Limited(601728) 2022 had a good start, and the revenue and profit maintained double-digit growth

\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )

Event:

On April 20, 2022, China Telecom Corporation Limited(601728) released the first quarter report of 2022. Q1 company had a good start in 2022, with double-digit year-on-year growth in operating revenue and net profit attributable to shareholders of listed companies.

Comments:

Revenue and profit maintained high growth and continued the good trend of high-quality development

In Q1 2022, the company’s operating revenue was 118576 billion yuan, a year-on-year increase of 11.5%, of which the service revenue was 110024 billion yuan, a year-on-year increase of 9.9%; The net profit attributable to shareholders of listed companies was 7.223 billion yuan, a year-on-year increase of 12.1%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 7.985 billion yuan, a year-on-year increase of 10.4%. The company maintained a high-quality development trend in 2021.

Remarkable results have been achieved in joint construction and sharing, the contribution of smart families has increased, and traditional businesses have grown steadily

In Q1 2022, the company’s mobile business revenue was 49.014 billion yuan, a year-on-year increase of 5.0%. The main reason is that co construction and sharing significantly improved the network quality, and the number of Q1 mobile users of the company increased by 6.5% year-on-year. In Q1 2022, the company’s broadband business revenue reached 29.645 billion yuan, a year-on-year increase of 4.9%. Among them, the income of smart families increased by 22.5% year-on-year, driving the comprehensive ARPU of broadband to 46.7 yuan, and the value contribution of smart families continued to increase.

Industrial digital business continued to accelerate growth, and the proportion of revenue reached a new high

In Q1 2022, the company will give full play to the market competitiveness of Tianyi cloud and continue to vigorously promote the integrated development of digital economy and real economy. In Q1 2022, the company’s industrial digital business accelerated growth, with revenue reaching 29.414 billion yuan, a year-on-year increase of 23.2%. The revenue of industrial digital business accounted for 26.7%, an increase of 2.1 PCT compared with 2021, and the revenue accounted for a new high.

Earnings forecast, valuation and rating

Considering the good development trend of the company, we predict that the company’s revenue from 2022 to 2024 will be 4813 / 5302 / 580.3 billion yuan respectively, the net profit attributable to the parent company will be 311 / 367 / 428 billion yuan respectively, the EPS will be 0.34/0.40/0.47 yuan / share respectively, and the corresponding PE will be 12 / 10 / 8 times respectively. We give the 2022 target pe18x, corresponding to the stock price of 6.12 yuan, maintaining the “buy” rating.

Risk tips

Industry policy risk, increased market competition risk, 5g development is less than expected risk.

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