China Telecom Corporation Limited (HKG:728) Half-Year Results Just Came Out: Here's What Analysts Are Forecasting For This Year

The half-year results for China Telecom Corporation Limited (HKG:728) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of CN¥268b were in line with what the analysts predicted, China Telecom surprised by delivering a statutory profit of CN¥0.24 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for China Telecom

Following the latest results, China Telecom's 15 analysts are now forecasting revenues of CN¥531.6b in 2024. This would be an okay 2.5% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥0.36, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥533.7b and earnings per share (EPS) of CN¥0.36 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$5.70. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic China Telecom analyst has a price target of HK$8.73 per share, while the most pessimistic values it at HK$4.99. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Telecom's past performance and to peers in the same industry. We would highlight that China Telecom's revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2024 being well below the historical 7.5% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.9% per year. Even after the forecast slowdown in growth, it seems obvious that China Telecom is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at HK$5.70, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on China Telecom. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Telecom analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that China Telecom is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.