G Sachs Lowers Ratings for CHINA TELECOM and CHINA UNICOM to Neutral, Anticipating Delayed Growth in Innovative Business

Written by Emily J. Thompson, Senior Investment Analyst

00728-0.75%

00762-1.64%

Source: aastocks

Updated: Jan 08 2026

0mins

Source: aastocks

Goldman Sachs' Positive Outlook: Goldman Sachs has a favorable view on the shift of capital expenditure by Chinese telecoms towards AI computing infrastructure and new business expansion.
Downgrade of Telecom Stocks: The firm downgraded CHINA TELECOM and CHINA UNICOM from Buy to Neutral due to stagnant growth in telecom services and the need for time to accelerate innovative business growth.
Target Price Adjustments: Goldman Sachs reduced the target prices for CHINA TELECOM from $7.9 to $6 and for CHINA UNICOM from $11.5 to $8.8.
Earnings Forecast Revision: The broker also lowered its earnings forecasts for both companies for 2026 and 2027 by 6-7%.

00728

$5.28+Infinity%1D

Analyst Views on 00728

Wall Street analysts forecast 00728 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00728 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

0 Analyst Rating

0 Buy

0 Hold

0 Sell

Current: 5.320

Low

Averages

High

Current: 5.320

Low

Averages

High

Goldman Sachs

Buy -> Neutral

downgrade

Al Analysis

2026-01-08

Reason

Goldman Sachs

Price Target

Al Analysis

2026-01-08

downgrade

Buy -> Neutral

Reason

Goldman Sachs downgraded CHINA TELECOM and CHINA UNICOM from Buy to Neutral due to stagnant growth in telecom services and the need for more time for innovative business acceleration. The firm noted short-term pressure on the service business and innovative business growth in China's telecom industry, leading to a reduction in target prices and a decrease in earnings forecasts for both companies.

Goldman Sachs

maintain

2025-12-02

Reason

Goldman Sachs

Price Target

2025-12-02

maintain

Reason

Goldman Sachs maintained its Buy rating on China Mobile, China Unicom, and China Telecom due to their potential to drive consumption through value-added services, despite meager revenue growth in traditional communication businesses. The firm expects these telecoms to shift their capital expenditure towards computing infrastructure to leverage the growth in AI demand in China. Additionally, rising contributions from new businesses and a steady increase in dividend payouts are anticipated to provide continued returns for investors.

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JPMorgan

maintain

$7.5

2025-10-23

Reason

JPMorgan

Price Target

$7.5

2025-10-23

maintain

Reason

The analyst rating for CHINA TELECOM is influenced by its 3Q25 service revenue growth of only 0.5% year-over-year, which represents a slowdown from the 2.1% growth in the previous quarter (2Q25). Additionally, the company's net profit growth decelerated from 7.1% in 2Q25 to 3.6% year-over-year. This performance was below that of its peer, CHINA MOBILE, which had a service revenue growth of 0.8% and a profit growth of 1.9%. Despite these challenges, JPMorgan maintained an Overweight rating on CHINA MOBILE, indicating a more favorable outlook for that company compared to CHINA TELECOM.

Morgan Stanley

Overweight

maintain

2025-10-22

Reason

Morgan Stanley

Price Target

2025-10-22

maintain

Overweight

Reason

The analyst rating for CHINA TELECOM (00728.HK) was set to Overweight due to several positive financial indicators. The company reported a 0.5% year-over-year increase in service revenue for 3Q25, amounting to RMB117 billion, which was in line with expectations. Additionally, EBITDA grew by 2.4% year-over-year to RMB35 billion, also meeting expectations, while the service revenue margin improved by 0.6 percentage points to 29.9%. Net profit increased by 3.6% year-over-year to RMB7.8 billion, surpassing expectations by 1.3%. Furthermore, operating cash flow for the quarter rose by 4% year-over-year. These strong financial results contributed to the positive rating and a target price of HKD6.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.

G Sachs Lowers Ratings for CHINA TELECOM and CHINA UNICOM to Neutral, Anticipating Delayed Growth in Innovative Business

Analyst Views on 00728

About the author

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