A Look at China Telecom (SEHK:728) Valuation Following Earnings Growth and Strong Shareholder Returns

China Telecom (SEHK:728) announced its third quarter 2025 results, revealing higher sales and net income compared to a year earlier. Investors are likely weighing these financial gains in relation to recent stock moves.

See our latest analysis for China Telecom.

China Telecom’s latest earnings beat has caught investors’ attention, fueling a steady rally since the start of the year. The share price is up 17.6% year-to-date, while its 1-year total shareholder return stands at an impressive 30.3%. This underscores that momentum is still very much alive after last year’s gains.

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But with shares already up sharply this year and the company delivering on growth, the key question for investors now is whether China Telecom remains undervalued or if the market has already accounted for further gains.

Most Popular Narrative: 24.4% Undervalued

China Telecom’s most widely followed valuation narrative points to significant upside from the current share price, with a fair value consensus well above the last close. This sets up a strong debate over what actually justifies that higher target, especially given the rapid momentum in both the business and the stock price.

Investment in cloud and digital transformation strategies, such as the Xirang platform and local GPU training solutions, is expected to increase service revenue by meeting the growing demand for intelligent cloud services, thereby improving the company’s EBITDA and net profit.

Read the complete narrative.

Want to know what bold projections underpin this target? The future hinges on next-generation profit margins and ambitious expansion into high-tech markets. Dive into the full narrative for the exact financial levers, if you want the data driving this striking fair value call.

Result: Fair Value of $7.32 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, high R&D costs and delays in realizing returns from ambitious AI projects may put pressure on margins if growth projections are not met.

Find out about the key risks to this China Telecom narrative.

Build Your Own China Telecom Narrative

If you see the story differently or want to dig into the numbers firsthand, it only takes a few minutes to build your own outlook and add your unique take. Do it your way.

A great starting point for your China Telecom research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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