SEHK:728

Stock Analysis Report

Executive Summary

China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services primarily in the People’s Republic of China.

Snowflake

Fundamentals

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has China Telecom's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.1%

728

0.9%

HK Telecom

2.9%

HK Market


1 Year Return

-7.9%

728

10.6%

HK Telecom

0.7%

HK Market

Return vs Industry: 728 underperformed the Hong Kong Telecom industry which returned 10.6% over the past year.

Return vs Market: 728 underperformed the Hong Kong Market which returned 0.7% over the past year.


Shareholder returns

728IndustryMarket
7 Day-1.1%0.9%2.9%
30 Day-3.0%-2.5%-2.5%
90 Day-3.2%-6.1%-5.4%
1 Year-4.9%-7.9%13.2%10.6%4.4%0.7%
3 Year-4.1%-12.4%-1.7%-8.3%17.0%5.2%
5 Year-13.1%-24.1%-14.3%-23.8%20.2%0.2%

Price Volatility Vs. Market

How volatile is China Telecom's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Telecom undervalued compared to its fair value and its price relative to the market?

32.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: 728 (HK$3.59) is trading below our estimate of fair value (HK$5.33)

Significantly Undervalued: 728 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 728 is good value based on its PE Ratio (12.1x) compared to the Telecom industry average (12.4x).

PE vs Market: 728 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: 728 is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: 728 is good value based on its PB Ratio (0.8x) compared to the HK Telecom industry average (1.1x).


Next Steps

Future Growth

How is China Telecom forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

5.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 728's forecast earnings growth (5% per year) is above the savings rate (2%).

Earnings vs Market: 728's earnings (5% per year) are forecast to grow slower than the Hong Kong market (11.1% per year).

High Growth Earnings: 728's earnings are forecast to grow, but not significantly.

Revenue vs Market: 728's revenue (3.8% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 728's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 728's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has China Telecom performed over the past 5 years?

2.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 728's earnings have grown by 2.6% per year over the past 5 years.

Accelerating Growth: 728's earnings growth over the past year (9.8%) exceeds its 5-year average (2.6% per year).

Earnings vs Industry: 728 earnings growth over the past year (9.8%) exceeded the Telecom industry 3.8%.


Return on Equity

High ROE: 728's Return on Equity (6.2%) is considered low.


Return on Assets

ROA vs Industry: 728's Return on Assets is below or equal to the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: 728 has not improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is China Telecom's financial position?


Financial Position Analysis

Short Term Liabilities: 728's short term assets (CN¥82.8B) do not cover its short term liabilities (CN¥274.5B)

Long Term Liabilities: 728's short term assets (82.8B) do not cover its long term liabilities (88.0B)


Debt to Equity History and Analysis

Debt Level: 728's debt to equity ratio (22%) is considered satisfactory

Reducing Debt: 728's debt to equity ratio has reduced from 34.9% to 22% over the past 5 years.

Debt Coverage: 728's debt is well covered by operating cash flow (132.7%).

Interest Coverage: 728's interest payments on its debt are well covered by EBIT (9x coverage).


Balance Sheet

Inventory Level: 728 has a high level of physical assets or inventory.

Debt Coverage by Assets: 728's debt is covered by short term assets (assets are 1.080880x debt).


Next Steps

Dividend

What is China Telecom's current dividend yield, its reliability and sustainability?

3.30%

Current Dividend Yield


Dividend Yield vs Market

company3.3%marketbottom25%2.2%markettop25%6.3%industryaverage2.0%forecastin3Years3.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 728's dividend (3.3%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 728's dividend (3.3%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.29%).

Stable Dividend: 728's dividends per share have been stable in the past 10 years.

Growing Dividend: 728's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.2%), 728's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 728's dividends in 3 years are forecast to be well covered by earnings (40.1% payout ratio).


Next Steps

Management

What is the CEO of China Telecom's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Ruiwen Ke (57yo)

0.4yrs

Tenure

CN¥779,000

Compensation

Mr. Ruiwen Ke has been Chairman and Chief Executive Officer of China Telecom Corporation Limited since May 22, 2019. Mr. Ke has been President and Chief Operating Officer of China Telecom Corporation Limit ...


CEO Compensation Analysis

Compensation vs. Market: Ruiwen has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Hong Kong market.

Compensation vs Earnings: Ruiwen's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.3yrs

Average Tenure

54yo

Average Age

Experienced Management: 728's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

2.4yrs

Average Tenure

55yo

Average Age

Experienced Board: 728's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCN¥90,086,53311 Oct 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares24,779,011
Max PriceCN¥3.64
BuyCN¥26,574,75326 Sep 19
GIC Pte. Ltd.
EntityCompany
Shares7,500,000
Max PriceCN¥3.54
BuyCN¥151,358,56425 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares41,054,173
Max PriceCN¥3.69
SellCN¥1,251,28223 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares337,200
Max PriceCN¥3.71
SellCN¥70,534,54323 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares19,007,904
Max PriceCN¥3.71
BuyCN¥223,76123 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares60,300
Max PriceCN¥3.71
BuyCN¥282,02123 Jul 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares76,000
Max PriceCN¥3.71
BuyCN¥60,180,21622 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares16,256,587
Max PriceCN¥3.70
SellCN¥100,235,51508 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares25,636,316
Max PriceCN¥3.91
BuyCN¥81,322,28203 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares20,844,377
Max PriceCN¥3.90
SellCN¥1,285,01427 Jun 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares331,198
Max PriceCN¥3.88
SellCN¥122,763,83427 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares31,641,000
Max PriceCN¥3.88
BuyCN¥445,80027 Jun 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares114,900
Max PriceCN¥3.88
BuyCN¥114,665,12627 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares29,553,649
Max PriceCN¥3.88
BuyCN¥5,486,36626 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares1,396,021
Max PriceCN¥3.93
SellCN¥28,833,73120 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares7,452,695
Max PriceCN¥3.87
BuyCN¥28,958,40413 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares7,305,896
Max PriceCN¥3.96
SellCN¥26,729,99710 May 19
Franklin Resources, Inc.
EntityCompany
Shares6,682,500
Max PriceCN¥4.00
SellCN¥17,817,74923 Apr 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares4,206,468
Max PriceCN¥4.24
BuyCN¥33,324,27822 Apr 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares7,834,187
Max PriceCN¥4.25
SellCN¥45,950,78712 Mar 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares11,069,021
Max PriceCN¥4.15
BuyCN¥112,84912 Mar 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares27,184
Max PriceCN¥4.15
BuyCN¥143,948,06911 Mar 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares33,624,854
Max PriceCN¥4.28
SellCN¥82,836,39724 Jan 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares20,381,459
Max PriceCN¥4.06
BuyCN¥81,863,04822 Jan 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares20,053,674
Max PriceCN¥4.08
SellCN¥54,570,15803 Jan 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares13,758,807
Max PriceCN¥3.97
SellCN¥97,835,20207 Dec 18
GIC Pte. Ltd.
EntityCompany
Shares24,410,000
Max PriceCN¥4.01
SellCN¥160,197,84128 Nov 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares39,293,092
Max PriceCN¥4.08
BuyCN¥78,128,47814 Nov 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares20,423,084
Max PriceCN¥3.83
SellCN¥13,695,67008 Nov 18
Franklin Resources, Inc.
EntityCompany
Shares3,664,000
Max PriceCN¥3.74
BuyCN¥21,865,08031 Oct 18
Franklin Resources, Inc.
EntityCompany
Shares5,708,000
Max PriceCN¥3.83

Ownership Breakdown


Management Team

  • Yuzhu Ma (65yo)

    Managing Director of Corporate Culture Department

    • Tenure: 0yrs
    • Compensation: CN¥415.00k
  • Tongqing Gao (55yo)

    Executive VP & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥765.00k
  • Ruiwen Ke (57yo)

    Chairman

    • Tenure: 0.4yrs
    • Compensation: CN¥779.00k
  • Jinxue Xiao (55yo)

    General Manager of Xinjiang Branch

    • Tenure: 0yrs
    • Compensation: CN¥500.00k
  • Zhongyue Chen (48yo)

    Executive VP & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥763.00k
  • Rebecca Wong

    Joint Company Secretary

    • Tenure: 2.8yrs
  • Zhiyong Zhang (53yo)

    Executive Vice President

    • Tenure: 1.3yrs
  • Guiqing Liu (52yo)

    Executive VP & Director

    • Tenure: 0.2yrs
  • Min Zhu (54yo)

    Executive VP

    • Tenure: 1yrs
    • Compensation: CN¥272.42k
  • Guoquan Wang (47yo)

    Executive VP & Director

    • Tenure: 0.2yrs

Board Members

  • Aloysius Tse (71yo)

    Independent Non-Executive Director

    • Tenure: 14.1yrs
    • Compensation: CN¥471.00k
  • Tongqing Gao (55yo)

    Executive VP & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥765.00k
  • Ruiwen Ke (57yo)

    Chairman

    • Tenure: 0.4yrs
    • Compensation: CN¥779.00k
  • Erming Xu (70yo)

    Independent Non-Executive Director

    • Tenure: 14.1yrs
    • Compensation: CN¥250.00k
  • Wang Hsuehming (69yo)

    Independent Non-Executive Director

    • Tenure: 5.4yrs
    • Compensation: CN¥257.00k
  • Zhongyue Chen (48yo)

    Executive VP & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥763.00k
  • Yixun Sui (55yo)

    Chairman of Supervisory Committee

    • Tenure: 0yrs
  • Guiqing Liu (52yo)

    Executive VP & Director

    • Tenure: 0.2yrs
  • Min Zhu (54yo)

    Executive VP

    • Tenure: 1yrs
    • Compensation: CN¥272.42k
  • Guoquan Wang (47yo)

    Executive VP & Director

    • Tenure: 0.2yrs

Company Information

China Telecom Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Telecom Corporation Limited
  • Ticker: 728
  • Exchange: SEHK
  • Founded: 2002
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: HK$294.594b
  • Shares outstanding: 80.93b
  • Website: https://www.chinatelecom-h.com/en/global/home.php

Number of Employees


Location

  • China Telecom Corporation Limited
  • Everbright Centre
  • 28th Floor
  • Wanchai
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHANYSE (New York Stock Exchange)SPONS ADR EACH REPR 100'H'COM CNY1USUSDNov 2002
ZCHADB (Deutsche Boerse AG)SPONS ADR EACH REPR 100'H'COM CNY1DEEURNov 2002
CHJH.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDNov 2002
728SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDNov 2002
ZCHDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURNov 2002
728SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDNov 2002
728SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDNov 2002

Biography

China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services primarily in the People’s Republic of China. It offers wireline voice services, i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 12:35
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.