# China Telecom (601728.SHG)

Canonical: https://gigainvestors.com/s/601728.SHG

Analysis as of: 2026-10-16T07:33:43.109Z. Financial observations: FY2001–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 6.85 per share; close as of 2026-10-15.

Estimated value: low CNY 3.73 per share, central CNY 4.36 per share, high CNY 4.91 per share. Buy at or below the central value CNY 4.36 per share. Valuation as of 2026-10-16T07:33:43.109Z; scenarios are not confidence intervals.

Expected annual return: 7.0% at the stated quote. About 7.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.04×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.08×

- FY2017: 0.07×

- FY2018: 0.08×

- FY2019: 0.08×

- FY2020: 0.07×

- FY2021: 0.07×

- FY2022: 0.07×

- FY2023: 0.07×

- FY2024: 0.08×

- FY2025: 0.07×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 24.6pp below the typical margin (limit 4pp)

- ROIC, median of available years: 5.9%

- ROIC, second-lowest year: 5.4%

- Typical minus recent gross margin: 24.6 pp

- Typical gross margin (annual median): 52.6%

- Recent gross margin (lower of latest and 3-year median): 28.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 20.8%

- ROIC including acquisitions, ten-year median: 4.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 5.5%

- FY2017: 5.4%

- FY2018: 5.6%

- FY2019: 5.3%

- FY2020: 5.6%

- FY2021: 6.2%

- FY2022: 6.4%

- FY2023: 7.5%

- FY2024: 8.2%

- FY2025: 7.8%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.88×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 132B

- Net income, five-year total: CNY 150B

- Return on incremental invested capital: 6.6%

- Working capital / revenue, annual change: 1.2 pp

- Working capital / revenue, change between three-year averages: 7.9 pp

- Working capital / revenue, final three-year average: -13.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.67×

- FY2022: 0.52×

- FY2023: 0.63×

- FY2024: 0.70×

- FY2025: 1.75×

### management: fail

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 5.5% vs 7.8%

- Per-share earnings: 0.23 to 0.36 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.2%

- Ordinary dilution, 5-year annual growth: 2.5%

- Diluted shares, 10-year annual growth: 1.2%

- Diluted shares, 5-year annual growth: 2.5%

- Per-share value growth: 5.8%

- Per-share value change: CNY 0.13

- Per-share value, starting three-year median: CNY 0.23

- Per-share value, ending three-year median: CNY 0.36

- Buyback history: 0 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 38B

- Cumulative net income, 10 years: CNY 249B

- ROIC, first three-year median: 5.5%

- ROIC, last three-year median: 7.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.22

- FY2017: CNY 0.23

- FY2018: CNY 0.26

- FY2019: CNY 0.25

- FY2020: CNY 0.26

- FY2021: CNY 0.28

- FY2022: CNY 0.30

- FY2023: CNY 0.33

- FY2024: CNY 0.36

- FY2025: CNY 0.36

### accounting: pass

- Sloan accruals: -10.8%

- Receivables to sales index (DSRI): 1.12×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 3.83×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.18×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -12.7%

- FY2017: -11.8%

- FY2018: -11.8%

- FY2019: -13.1%

- FY2020: -15.6%

- FY2021: -14.6%

- FY2022: -13.5%

- FY2023: -12.8%

- FY2024: -12.9%

- FY2025: -10.8%

## Holders

## Price story

Price needs cash profits to grow 10% a year for ten years · sales -1.2%

Story as of 2026-10-16T09:59:57.422Z; price observation 2026-10-15.

Price needs cash profits to grow 10% a year for ten years

### Sales · FY2024–2025

sales -1.2%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 353B 

- FY2017: CNY 366B 

- FY2018: CNY 377B 

- FY2019: CNY 376B 

- FY2020: CNY 394B 

- FY2021: CNY 440B 

- FY2022: CNY 481B 

- FY2023: CNY 514B 

- FY2024: CNY 529B 

- FY2025: CNY 523B 

### Gross margin · FY2025

gross margin 28%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 57.8% 

- FY2017: 56.3% 

- FY2018: 53.4% 

- FY2019: 53.9% 

- FY2020: 52.9% 

- FY2021: 52.4% 

- FY2022: 51.7% 

- FY2023: 50.7% 

- FY2024: 50.2% 

- FY2025: 28.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in telecom services; annual sales are CNY 523.2 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2025: revenue 523157071000; grossProfit 146586369000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601728.SHG: China Telecom Corporation Limited, together with its subsidiaries, provides mobile communications, wireline and satellite communications, internet access, cloud computing and computing power, AI, big data, quantum, ICT integration in the People's Republic of China. The company offers mobile communications; wireline and smart family; industrial digitalisation; and other services. The company also develops and deploys industry-specific large models and digital platforms, including the Xingchen platform series, to support digital transformation in sectors such as manufacturing, education, healthcare, government, and smart city management. The company was incorporated in 2002 and is based in Beijing, China. China Telecom Corporation Limited operates as a subsidiary of China Telecom Group Co., Ltd.

### Why customers stay

Margins ranged from 28% to 50.7% during 2023–25; it earns 5.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2023: grossProfit / revenue = 50.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2024: grossProfit / revenue = 50.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2025: grossProfit / revenue = 28%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); 10-year return on capital observations [[2016,0.0552883353584269],[2017,0.054168061134518615],[2018,0.056477538306195285],[2019,0.053117179318059454],[2020,0.05588894551025001],[2021,0.06248415154521836],[2022,0.06423786286272157],[2023,0.07458840821985852],[2024,0.08164413258311735],[2025,0.07820707652127079]]; median 0.05948084492570682. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 52% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); Gross margin observations: [[2021,0.5236137621629247],[2022,0.5173705156112395],[2023,0.5069311519206466]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2016: growth capex 28671871734.857925; upkeep 68100128265.142075; owner earnings 14359871734.857925. Growth capex / owner earnings = 1.9966662839514284.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2017: growth capex 16315000000; upkeep 71108000000; owner earnings 18617000000. Growth capex / owner earnings = 0.8763495729709405.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2018: growth capex 12728000000; upkeep 71127000000; owner earnings 21210000000. Growth capex / owner earnings = 0.6000942951438001.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2019: growth capex 0; upkeep 83163000000; owner earnings 8312000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2020: growth capex 18526000000; upkeep 70442000000; owner earnings 20850000000. Growth capex / owner earnings = 0.888537170263789.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2021: growth capex 13668000000; upkeep 71506000000; owner earnings 17468600000. Growth capex / owner earnings = 0.7824324788477611.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2022: growth capex 18782000000; upkeep 72730000000; owner earnings 14213800000. Growth capex / owner earnings = 1.3213918867579395.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2023: growth capex 14939725000; upkeep 75234000000; owner earnings 19236200000. Growth capex / owner earnings = 0.7766463750636821.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2024: growth capex 13886000000; upkeep 76042000000; owner earnings 23169800000. Growth capex / owner earnings = 0.5993146250722924.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); FY2025: growth capex 0; upkeep 73148181000; owner earnings 58212248000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); Dividend observations: [[2016,6489000000],[2017,7530000000],[2018,7568000000],[2019,8891000000],[2020,9262000000],[2021,8438737000],[2022,26537070000],[2023,20059000000],[2024,23526485000],[2025,25063806000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 88% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601728.SHG SharesStats.PercentInsiders = 87.967 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:43.109Z); Ten-year compound average after fade. Initial solved rate 0.13018549557298986. Price 6.85; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.10460018058717348 → FY2025 0.6361497981048233. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2021-08: CNY 4.56 per share

- 2021-09: CNY 4.29 per share

- 2021-10: CNY 4.39 per share

- 2021-11: CNY 4.28 per share

- 2021-12: CNY 4.33 per share

- 2022-01: CNY 4.16 per share

- 2022-02: CNY 4.12 per share

- 2022-03: CNY 4.00 per share

- 2022-04: CNY 3.89 per share

- 2022-05: CNY 3.87 per share

- 2022-06: CNY 3.73 per share

- 2022-07: CNY 3.71 per share

- 2022-08: CNY 3.75 per share

- 2022-09: CNY 3.83 per share

- 2022-10: CNY 3.93 per share

- 2022-11: CNY 4.34 per share

- 2022-12: CNY 4.19 per share

- 2023-01: CNY 5.00 per share

- 2023-02: CNY 5.85 per share

- 2023-03: CNY 6.33 per share

- 2023-04: CNY 6.69 per share

- 2023-05: CNY 6.09 per share

- 2023-06: CNY 5.63 per share

- 2023-07: CNY 5.68 per share

- 2023-08: CNY 5.76 per share

- 2023-09: CNY 5.79 per share

- 2023-10: CNY 5.33 per share

- 2023-11: CNY 5.19 per share

- 2023-12: CNY 5.41 per share

- 2024-01: CNY 5.75 per share

- 2024-02: CNY 5.85 per share

- 2024-03: CNY 6.08 per share

- 2024-04: CNY 6.00 per share

- 2024-05: CNY 5.94 per share

- 2024-06: CNY 6.15 per share

- 2024-07: CNY 6.02 per share

- 2024-08: CNY 6.10 per share

- 2024-09: CNY 6.71 per share

- 2024-10: CNY 6.36 per share

- 2024-11: CNY 6.47 per share

- 2024-12: CNY 7.22 per share

- 2025-01: CNY 7.06 per share

- 2025-02: CNY 7.75 per share

- 2025-03: CNY 7.85 per share

- 2025-04: CNY 7.69 per share

- 2025-05: CNY 8.03 per share

- 2025-06: CNY 7.75 per share

- 2025-07: CNY 7.49 per share

- 2025-08: CNY 7.61 per share

- 2025-09: CNY 6.66 per share

- 2025-10: CNY 6.69 per share

- 2025-11: CNY 6.86 per share

- 2025-12: CNY 6.30 per share

- 2026-01: CNY 6.00 per share

- 2026-02: CNY 5.79 per share

- 2026-03: CNY 5.67 per share

- 2026-04: CNY 6.03 per share

- 2026-05: CNY 6.05 per share

- 2026-06: CNY 5.19 per share

- 2026-07: CNY 6.30 per share

- 2026-08: CNY 6.37 per share

- 2026-09: CNY 6.28 per share

- 2026-10: CNY 6.62 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 2.20 per share, central CNY 2.46 per share, high CNY 2.82 per share

- FY2017: low CNY 2.20 per share, central CNY 2.48 per share, high CNY 2.85 per share

- FY2018: low CNY 2.27 per share, central CNY 2.56 per share, high CNY 2.94 per share

- FY2019: low CNY 2.28 per share, central CNY 2.56 per share, high CNY 2.94 per share

- FY2020: low CNY 3.01 per share, central CNY 3.39 per share, high CNY 3.88 per share

- FY2021: low CNY 3.39 per share, central CNY 3.76 per share, high CNY 4.25 per share

- FY2022: low CNY 3.01 per share, central CNY 3.33 per share, high CNY 3.75 per share

- FY2023: low CNY 3.19 per share, central CNY 3.51 per share, high CNY 3.93 per share

- FY2024: low CNY 3.77 per share, central CNY 4.50 per share, high CNY 5.08 per share

- FY2025: low CNY 3.79 per share, central CNY 4.42 per share, high CNY 4.97 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:29.278Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations