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2026-06-26 11:40:40 Chinese telecom operators have recently launched AI token plans for both consumer (ToC) and business (ToB) users, charging via subscription fees or token consumption, Goldman Sachs said in its report. The broker was positive on the incremental revenues from AI token packages and expected that, with the expansion of application scenarios such as office AI agents, OpenClaw and AI coding, this will lift ARPU. However, it will take time for AI token penetration to increase and translate into meaningful revenue. Meanwhile, weak progress in 5G base station deployment and a higher VAT rate were expected to exert immense pressure on the future expansion and growth of Chinese telecom operators. As a result, the broker downgraded CHINA TELECOM (00728.HK), CHINA UNICOM (00762.HK) and CHINA TOWER (00788.HK) from Neutral to Sell. The broker added that it would turn more constructive only if it sees faster adoption of AI token solutions or more high-quality enterprise AI projects being implemented. On individual stocks, CHINA TELECOM launched its AI token plans, with monthly fees for consumer users ranging from RMB9.9 to RMB49.9, and from RMB39.9 to RMB299.9 for business users. However, due to weak 5G service consumption, slower base station deployment and the VAT hike, Goldman Sachs lowered its earnings forecasts for FY2026-28 by 13%, 25% and 26%, respectively. It also slashed its 12-month TP from HKD6 to HKD4.2 and downgraded the stock from Neutral to Sell. Although CHINA UNICOM (00762.HK) reduced capex on 5G infrastructure, its blended ARPU breached RMB100, and the company launched programming initiatives and AI Token plans to enhance user value retention. However, revenue and net profit in 1Q26 faded 0.5% YoY and 17.6% YoY, respectively, which the broker attributed to meager mobile service growth. Goldman Sachs cut its earnings forecasts for 2026-28 by 17%, 23% and 39%, mainly reflecting weak mobile service revenue and the VAT increase. The TP was lowered from HKD8.8 to HKD6, implying 9% downside from the current price, and the rating was downgraded from Neutral to Sell. CHINA TOWER (00788.HK) is expanding into innovative businesses such as smart towers and energy, and expected its telecom service provider (TSP) business to remain stable amid slower 5G capex and declining rental fees. While 6G may provide long-term upside potential, standard setting and commercialization of terminal applications will take time. The company is committed to cost control, but rising maintenance expenses for tower assets are weighing on near-term margins. The TP was cut steely from HKD13.14 to HKD8.1, and the rating was lowered from Neutral to Sell. ~ AASTOCKS Financial News Website: www.aastocks.com | |