Industry Downgrade: Morgan Stanley downgraded the Greater China telecom industry from Attractive to In-Line, citing the end of key growth drivers and ongoing macroeconomic challenges affecting mobile revenue.
Outlook for Internet Data Centers: Despite the downgrade, the outlook for internet data centers remains strong, with potential supply-side relief anticipated in the future.
Revenue Growth Forecast: The broker forecasts a 1.7% growth in industry service revenue for 2026, with total net profit growth of 3%, driven by efficiency improvements and potential AI adoption by state-owned enterprises.
Limited Re-rating Drivers: Morgan Stanley identified limited re-rating drivers for Chinese telecoms, including stable yields, decelerated growth, and narrowed payout ratios, projecting a target dividend yield of 6-7% for H-shares in 2026.
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
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 Buy
0 Hold
0 Sell
Current: 5.100
Low
Averages
High
Current: 5.100
Low
Averages
High
Morgan Stanley
Morgan Stanley
Attractive -> In-Line
downgrade
$NULL
2026-01-28
New
Reason
Morgan Stanley
Morgan Stanley
Price Target
$NULL
AI Analysis
2026-01-28
New
downgrade
Attractive -> In-Line
Reason
Morgan Stanley downgraded the industry rating for Greater China telecom operators from Attractive to In-Line due to several factors. The key reasons include:
1. End of Upcycle Drivers: The previous drivers of growth for Chinese telecoms, such as regulatory relaxation, reduced competition, increased cloud business share, and shareholder returns, have come to an end.
2. Macroeconomic Challenges: The ongoing macro environment and deflationary pressures have negatively impacted mobile services.
3. Insufficient AI Impact: The potential of AI to drive business revenue growth is currently not sufficient.
4. Limited Re-rating Drivers: There are few catalysts for re-rating, including the likelihood that Chinese yields will not decline further and a significant deceleration in growth to low single-digit profit increases.
5. Preference for Fixed Over Mobile: The broker prefers fixed-line services over mobile services and H-shares over A-shares due to the strengthening RMB and the potential narrowing of the A-share premium.
Overall, the outlook for the industry is cautious, with expected modest growth in service revenue and net profit, but limited potential for significant improvement in the near term.
Goldman Sachs
Goldman Sachs
Buy -> Neutral
downgrade
2026-01-08
Reason
Goldman Sachs
Goldman Sachs
Price Target
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.
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Goldman Sachs
Goldman Sachs
maintain
2025-12-02
Reason
Goldman Sachs
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.
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.
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.
