BOCI Securities: Lowered China Communications Services target price to HKD 4.57, optimistic about AI computing infrastructure demand

BOCI International released a research report saying that, considering a slowdown in telecom investment over the next two to three years, it cut China Communications Services (00552)’s profit forecasts for the current and next years by 8.1% and 11.8%, respectively. The target price was lowered from HK$5.15 to HK$4.57, implying a 7.5x forward P/E ratio for 2026. It reiterated a “Buy” rating, maintained a positive view on the company’s interim growth, and expects strong demand for AI computing infrastructure.

In the second half of 2025, China Communications Services’ revenue declined 3.2% year over year; however, net profit remained stable at RMB 1.48 billion (the same below), below the bank’s and the market’s expectations, mainly because revenue from domestic telecom operators fell 4.1% year over year last year. During the period, domestic non-telecom revenue increased 5.5% year over year. Non-telecom infrastructure service business accounted for more than half of total revenue, making the revenue mix more diversified and resilient. By the end of last year’s second half, the company’s free cash flow reached RMB 8.42 billion, up 14.1% year over year and improved versus the first half, mainly due to better management of accounts receivable.

(责任编辑：王治强 HF013)

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