00728 Should I Buy

The analyst rating from CICC is influenced by the recent increase in VAT on telecommunication services by China's Ministry of Finance and the State Administration of Taxation. The report suggests that operators are unlikely to pass the tax burden onto customers in 2026, which will lead to a reduction in income after tax that will be fully reflected in profits. Consequently, CICC has revised its earnings forecasts for China Mobile and China Telecom, lowering their revenue and net profit forecasts for 2026 while maintaining the 2025 estimates unchanged. Although the original ratings are kept, the target prices have been reduced due to the anticipated pressure on share prices as the market adjusts to the tax policy changes and the lower earnings outlook.