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<Research>UBS Estimates CN Telecom VAT Hike to Impact Earnings of China Mobile/ China Telecom/ China Unicom by 9%/ 18%/ 18%+
China's three major telecom operators announced a VAT adjustment yesterday (1st), according to a UBS research report. Starting from January 1, 2026, the business tax rate for m...
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<Research>UBS Estimates CN Telecom VAT Hike to Impact Earnings of China Mobile/ China Telecom/ China Unicom by 9%/ 18%/ 18%+
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China's three major telecom operators announced a VAT adjustment yesterday (1st), according to a UBS research report. Starting from January 1, 2026, the business tax rate for mobile data, SMS/ MMS, and internet broadband services will be increased from 6% to 9%.

In UBS' estimate, this adjustment will gravely dent the earnings of the three Chinese telecom giants, as the revenues from the above-mentioned services accounted for 45-60% of their estimated service revenues in 2025.

Related News UBS Lowers TP for CHINA TELECOM (00728.HK) and CHINA UNICOM (00762.HK); Limited Dividend Growth for Telecom Stocks Expected
UBS expects the VAT hike to affect the service revenues of telecom operators by around 1.5-2%. Assuming a corporate income tax rate of 25% and without considering other cost or tax deduction measures, the net profit of CHINA MOBILE (00941.HK)  +0.250 (+0.313%)    Short selling $314.81M; Ratio 104.264%   , CHINA TELECOM (00728.HK)  0.000 (0.000%)    Short selling $45.91M; Ratio 200.147%   , and CHINA UNICOM (00762.HK)  -0.040 (-0.562%)    Short selling $28.82M; Ratio 173.964%   will be impacted by around 9%, 17.9%, and 18.2%, respectively, based on the 2025 net profit forecast.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.)

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