China Telecom’s mobile users reached approximately 337 million.
At noon on April 23, China Telecom (00728.HK) released its first quarter earnings report for 2020, and revenue for the quarter was 94.793 billion yuan (RMB, the same below) , Higher than Bloomberg consensus expectation (94.405 billion yuan); company shareholder profit attributable to 5.822 billion yuan, down 2.2% year-on-year, higher than Bloomberg consensus expectation (5.063 billion yuan).
China Telecom ’s main source of income is the service business, which accounts for more than 90% of the total revenue for a long time. In the first quarter, revenue from service business was 92.137 billion yuan, a year-on-year increase of 0.7%.
In terms of main business data, in the first quarter of 2020 (March 31, 2020), China Telecom ’s mobile users reached approximately 337 million, including 5G package users The number is about 16.61 million households, a net increase of 12 million households.
In the first quarter, China Telecom ’s mobile Internet traffic increased by 37.4% year-on-year.
Looking forward to the future, China Telecom said, will actively respond to the impact of the epidemic and grasp new market demand Change, adhere to user and market orientation, speed up 5G network Network construction and sharing construction, firmly promote cloud network integration, deepen reform and innovation, deepen smart operation, comprehensive Promote high-quality development exhibition.
China Telecom disclosed in its 2019 annual report released on April 9 that as of the end of 2019, the company invested 9.3 billion yuan to build 40,000 5G base stations, and The sharing of China Unicom’s 5G base stations exceeds 20,000 stations, and the total scale of 5G base stations in use exceeds 60,000 stations, which has covered more than 50 commercial cities in key areas. In the first quarter financial report, China Telecom did not disclose the latest progress of this indicator.
Guotai Junan previously published a research report saying that 4G ARPU is still expected to decline year-on-year due to market saturation and the decline of the 4G traffic dividend. However, due to the ease of market competition, the decline is expected to be much lower than the 2019 decline. China Telecom plans to have 60-80 million 5G users by the end of 2020, and the rising proportion of 5G users is expected to drive the growth of mobile ARPU. Considering strong market demand and a strong customer base, DICT revenue is expected to achieve double-digit growth targets. Through “co-building and sharing”, by 2020, the company can have more than 300,000 5G base stations, while capital expenditure only increased by 9.6% year-on-year, meaning that depreciation expenses will not increase significantly in 2020. In addition, the three major telecom operators may share 5G networks in remote areas in the future to further reduce investment costs.
Guotai Junan lowered China Telecom ’s target price from HK $ 3.78 to HK $ 3.00, but upgraded the company ’s investment rating from “Accumulate” to “Buy”.
On April 23, Hong Kong stocks in midday, China Telecom rose 1.18% to HK $ 2.58.