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<Research>JPM: Slowdown in Cloud Rev. Growth for CN Telecoms due to Reduced Digitalization Demand from SOEs
Recommend 36 Positive 56 Negative 33 |
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The three major Chinese telecom operators charted an overall net profit increment of about 5% YoY in 1H25, JPMorgan said in its research report. This growth was mainly underpinned by cost optimization. All three key operators uplifted their dividend payout ratios YoY for 1H25, demonstrating their commitment to enhancing shareholder returns. JPMorgan estimated that the dividend yield of H shares for the three telecom operators remains at an attractive level of 5-6%, with CHINA MOBILE (00941.HK) being the highest at 6%. The report also took note that the annual growth rate of cloud revenue for the three telecom operators evidently slowed from 17-35% in 2024 to 5-10% in 1H25. This was attributable to the expanded market share of internet companies and the reduced digitalization demand from SOEs. The broker maintained a positive outlook on CHINA MOBILE, CHINA TELECOM (00728.HK), and CHINA UNICOM (00762.HK), assigning an Overweight rating to all, upbeat about their strong dividend yields, profit growth, and potential upward space for cloud revenue. JPMorgan continued to list CHINA TELECOM as its top pick given its highest proportion of cloud business and most resilient traditional mobile/ broadband service. AASTOCKS Financial News Website: www.aastocks.com |
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