Operating Margin - China Telecom Corp Ltd (SSE:601728)

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Price: 6.82 CNY -0.73%

Market Cap: 624.1B CNY

7.2%

Current

Average

9.7%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

7.2%

Operating Profit

38B

Revenue

525.9B

Operating Margin Across Competitors

Country	Company	Market Cap	Operating Margin
CN	China Telecom Corp Ltd SSE:601728	624.1B CNY	7%
US	AT&T Inc NYSE:T	177.8B USD	19%
US	Verizon Communications Inc NYSE:VZ	174.1B USD	24%
DE	Deutsche Telekom AG XETRA:DTE	134.1B EUR	23%
JP	Nippon Telegraph and Telephone Corp TSE:9432	12.8T JPY	13%
SG	Singapore Telecommunications Ltd SGX:Z74	75.2B SGD	10%
SA	Saudi Telecom Company SJSC SAU:7010	189B SAR	18%
FR	Orange SA PAR:ORA	36.4B EUR	11%
AU	Telstra Corporation Ltd ASX:TLS	56.4B AUD	17%
CH	Swisscom AG SIX:SCMN	28.7B CHF	12%
HK	China Unicom Hong Kong Ltd HKEX:762	267.7B HKD	5%

China Telecom Corp Ltd
Glance View

Market Cap

624.1B CNY

Industry

Telecommunication

In the vast and bustling realm of China's telecommunications industry, China Telecom Corp Ltd. stands as a towering giant, weaving a complex web of connectivity across the nation and beyond. Originally a part of the expansive government-run China Telecom system, the company has transformed itself over the years into a formidable force in the global telecom market. With a rich legacy dating back to 2002 when it spun off from the larger governmental umbrella following aggressive reforms, China Telecom quickly adapted to the dynamic digital age. Serving as one of the leading providers of high-quality fixed-line and mobile telecommunications services, the company has facilitated seamless connections across urban and rural landscapes alike. Its operations are not limited to just providing basic telecom services but extend to offering an expansive array of internet access, information services, and even cloud computing solutions, positioning itself as a versatile player in an increasingly interconnected world. Behind China Telecom's sprawling network lies its strategic ability to monetize a varied portfolio of services, making it a linchpin in China's digital infrastructure. The company's revenue streams are built on the provision of voice, data, and multimedia services, driven by both consumer and enterprise demand. Its mobile service wing boasts a staggering number of subscribers, a testament to China's vast population and the growing necessity of mobile connectivity. Beyond traditional telecommunications, China Telecom has embraced the burgeoning world of data, diversifying into cloud computing and data center services, capitalizing on the digital transformation sweeping across industries. By offering integrated solutions that cater to businesses looking to digitize their operations, China Telecom has adeptly positioned itself as an indispensable partner in China's ongoing technological revolution. The company's strategic investments in next-generation technologies and infrastructure ensure it remains at the forefront of innovation, continually expanding its footprint both domestically and on the international stage.

View China Telecom Corp Ltd Analysis

China Telecom Corp Ltd Intrinsic Value

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What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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China Telecom Corp Ltd
SSE:601728