YOU ARE AT:CarriersChina Telecom stock down 27% since May

China Telecom stock down 27% since May

China Mobile and China Unicom are also slipping in value

Shares of China Telecom slipped by about 5% this week after Zacks downgraded the stock to a “Sell” rating from a “Hold” rating on June 17.

In general, the stock has declined steadily over the past month – losing more than a quarter of its value since mid-May.

Shares of China Telecom closed at $59.50 on June 18, down 27.4% from a closing price of $72.90 on May 15. It has traded as low as $48.04 and as high as $78.28 in the past year.

The Chinese state-owned telecom company operates local telephone networks in 10 provinces in China, as well as domestic and international fixed-line networks and infrastructure with a market cap of $48 billion.

TheStreet also has a “Hold” rating on China Telecom’s stock, citing weaknesses such as a disappointing return on equity, deteriorating net income and feeble growth in the company’s earnings per share. On the positive side, TheStreet cited a solid stock price performance, attractive valuation levels and expanding profit margins.

In late May, analysts at Jefferies Group upgraded the stock to a “Buy” rating from a “Hold” rating. And analysts at Sanford C. Benstein upgraded shares to an “Outperform” rating from a “Market Perform” rating in mid-April.

China Telecom also recently announced an annual dividend, which will be paid on July 27th. Investors of record on June 1 will be paid a dividend of $1.283 per share, representing a dividend yield of 1.8%.

Meanwhile, the country’s other state-owned telecommunications companies have also seen stock declines over the past month.

Still, on June 3 Zacks ranked China Mobile’s stock as “Buy,” citing expected earnings growth of 16.2% for the current year. Shares of China Mobile – the world’s largest carrier – closed at $64.51 on June 18, down 7% from $69.58 on May 15.

Meanwhile, China Unicom‘s stock closed at $15.69 on June 18, down 14% from a closing price of $18.29 on May 15.

ABOUT AUTHOR

Mary Ann Azevedo
Mary Ann Azevedo
Mary Ann Azevedo is an award-winning journalist based in Austin, Texas. She has covered business and technology issues for Silicon Valley Business Journal, San Francisco Business Times, The Network, Venture Capital Journal and the Houston Business Journal.