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China fixed-line operator, China Telecom (ticker: CHA), announced (WSJ subscription required) its
net profit doubled in 2004 to $3.38 billion (assuming use of the company's restated financial numbers for 2003). Here are the details:

2004 Financial Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

  • Revenue rose 6.4% to $19.5 billion.
  • Internet service revenue was $1.7 billion.

  • Local
    telephone and Internet services subscribers were the key drivers of revenue
    expansion.
  • Net profit doubled to $3.4 billion.
  • Analysts had forecast net profits between $2.9 billion and $3.1 billion.

Misc:

  • The company restated its figures for 2003 to reflect
    the revaluation of the 10 provincial networks that it acquired from its
    parent in April of last year.
  • Removing the impact of asset
    revaluation, which China Telecom conducts every three years, analysts
    said the company's results would have shown high-single-digit year-on-year
    growth.

Subscribers:

  • Local telephone-service customers
    increased 16% to 186.65 million, which includes 42.2 million users of
    its wireless local access service, known as "Little Smart".

  • Broadband subscriber base grew 91% to 13.84 million.

2005 Guidance:

  • Capital expenditures are expected to drop slightly to $6.8 billion.

  • Capital expenditure covers the upgrade of its network and preparations
    for 3G networks.
  • CHA will reduce its capital expenditure on wireless local
    access service.
  • It will focus more on developing its
    broadband and internet-based networks.
  • It expects value-added services, such as short
    text messages, and broadband to grow.

As of the end of February 2005, China had:

  • 344 million mobile users.
  • 320 million fixed-line
    users.
  • Mobile penetration rate of 26%.

For more on China Telecom and other Chinese telecom companies, see here from the China Stock Blog.

China Telecom's stock market performance:
Cha331_1


Source: China Telecom (CHA) beats consensus profit estimates, shows strong broadband growth (4Q04)