Chunghwa Telecom (CHT) Q3 2026 earnings review
Chunghwa IT orders rise 84%, but property sale inflates profit
Chunghwa Telecom reported its best third quarter in years, but a one-off property sale did much of the work. Revenue rose 17% and profit per share 29%, both records for a third quarter, chairman Chih-Cheng Chien said. Without the property project and the subsidiaries, the three telecom business groups grew at less than half that pace, led by enterprise IT projects and iPhone sales. Chunghwa has not updated its full-year plan, so by our math that plan now implies an 18% revenue decline in the fourth quarter, a figure president Rong-Shy Lin said the group will beat.
| Revenue | NT$67.6B +16.7% from a year ago |
|---|---|
| Revenue of the three telecom business groups | +6.9% by our math; excludes the property sale and other subsidiaries |
| Profit per share | NT$1.57 +29.5% from a year ago |
| Full-year outlook | Unchanged nine-month revenue already at 108% of plan |
⚖️ Verdict: 🟢 Bullish
The story got better because the enterprise business booked far more work than it sold: order intake rose 84% from a year ago and recurring IT revenue grew 19%, so growth no longer depends on one or two large projects. The bad news: the enterprise unit's profit fell even as its revenue rose, and the group's margin before depreciation slipped despite the property gain.
The question now is whether the enterprise order book turns into profit or only into revenue. Either project margins recover once the bonus catch-up passes, as finance chief Audrey Hsu expects, or the shift toward equipment-heavy projects keeps the enterprise margin below 15%. The enterprise unit's pre-tax margin in the fourth-quarter results in February will tell.
🐂 Bull Case
Enterprise Orders Rose 84% and Recurring Revenue 19%
Chunghwa Telecom sells data-centre space, cloud computing, cybersecurity and system-building projects to companies and government agencies, a business it calls ICT. It is the fastest-growing part of the group: enterprise ICT revenue rose 23% from a year ago to NT$8.5 billion. That was the highest third-quarter figure since 2021, president Rong-Shy Lin said.
Orders grew even faster. Third-quarter order intake rose 84% from a year ago, "mainly driven by large government-related projects, as well as AIDC installations for enterprise customers", Lin said; AIDC means data centres built for AI computing. Orders booked in the first nine months already exceed 1.4 times the whole of 2025.
- Cloud revenue: up 45% from a year ago
- Data-centre (IDC) revenue: up 26%, the tenth quarter of growth in a row
- Cybersecurity revenue: up 22%
- Recurring ICT revenue: up 19%
The orders matter because project revenue is lumpy: enterprise ICT revenue fell 6% in the final quarter of 2025 against a high comparison. An order book this size covers that risk for several quarters. But vice president of finance Angela Tsai said "the onetime project revenue is still larger than the recurring revenue", so quarterly growth still depends on when projects complete.
What to watch: enterprise ICT revenue growth in the fourth quarter, due in February. Growth above 20% against last year's weak quarter would show that the order book turns into revenue within months rather than sitting in the backlog.
Core Telecom Customers Keep Paying More
Mobile and fixed broadband are Chunghwa's largest and steadiest businesses, and both grew again. Mobile service revenue rose 2.9% to NT$17.8 billion, because half of smartphone users now have 5G plans, which cost about 40% more per month than 4G, Lin said. Roaming revenue grew 18% as more customers travelled.
Fixed broadband revenue rose 3.0% because customers keep moving to faster lines. Sign-ups of 1 Gbps or faster rose 52% from a year ago. Lines of 300 Mbps or more now make up 43% of the broadband base, up from 38% a year ago, so the average monthly bill rose NT$12 to NT$822.
What to watch: postpaid average revenue per user next quarter, now NT$573. Growth of around 2% would show that 5G upgrades still lift bills even as 5G passes half of smartphone users, the point Lin expects by year-end.
Operating Cash Flow Rose Faster Than Profit Spending
Chunghwa pays most of its profit out as dividends, NT$5.20 per share for 2025 or NT$40.3 billion in total, so the cash left after building networks matters more than reported profit. Cash from operations in the quarter rose 12% to NT$18.1 billion, even though capital spending rose too.
For the first nine months, free cash flow rose 20% to NT$33.7 billion, finance chief Audrey Hsu said. The group paid the full dividend in the quarter and still ended September with more cash than borrowings. That gives it room to fund data centres and satellites without new debt.
What to watch: fourth-quarter cash from operations, due in February. A figure that keeps pace with the rise in receivables and project inventories would show that the enterprise order book is not draining cash on its way to revenue.
🐻 Bear Case
A Property Sale Produced Most Profit Growth
Chairman and chief executive Chih-Cheng Chien called it the best third quarter since 2009 and said "our asset revitalization efforts contributed a one-off gain to profit, further demonstrating the effectiveness of our strategy". The gain came from apartments that subsidiary Light Era Development built in Taoyuan and handed to buyers this quarter, finance chief Audrey Hsu said.
Chunghwa Telecom did not say how large the gain was. The "Others" revenue line, which holds the property project and the chip-testing subsidiary Chunghwa Precision Test, rose to NT$7.3 billion from NT$1.5 billion. By our math the three telecom business groups together earned about 1% more before tax. That leaves about NT$3.2 billion of the NT$3.3 billion rise in pre-tax profit coming from outside them.
This matters because the headline hides a margin that slipped. EBITDA margin, profit before depreciation as a share of revenue, fell to 38.0% from 38.2%, the only measure below the company's own forecast range. Hsu said "we do not expect a contribution of similar size in the near term", so next year's third quarter starts against a high base.
What to watch: the Others revenue line in the fourth quarter, due in February. A fall back toward NT$2 billion would confirm that this quarter's revenue and profit are not the new base for the group.
Enterprise Profit Fell While Its Revenue Grew 8%
The Enterprise Business Group sells telecom and ICT services to companies and government. Its revenue rose 8.2% to NT$20.5 billion, but income before tax fell 3.1%. By our math its pre-tax margin dropped to about 13.9% from 15.6%, the second year in a row that profit lagged revenue in this quarter.
Hsu gave two reasons. ICT projects "carry lower margin than telecom service because they include equipment and construction costs", and "we accrue higher performance bonus in the third quarter" because full-year earnings run above plan. "This is a timing effect, not a structural change", she said. At group level, administrative costs rose 16% and, measured against the three groups' revenue, took 0.3 percentage points more of it.
What to watch: the enterprise unit's pre-tax margin in the fourth quarter, when the bonus catch-up should not repeat. A margin back near 15% would support Hsu's timing explanation; the group's own statement that ICT margins will improve is tested then.
Project Work Ties Up More Cash
Building data centres and government systems means Chunghwa buys equipment and does work before customers pay. Receivables rose 19% from a year ago to NT$31.9 billion. Inventories, mostly projects in progress, rose 40% to NT$18.4 billion. Revenue of the three business groups grew about 7% by our math, so both balances are growing far faster than the business behind them.
Customers do prepay part of this work. Contract liabilities, money received for work not yet done, rose 19.5% to NT$30.6 billion, and most of it relates to ICT projects, Hsu said. Cash from operations still rose in the quarter, so the build-up has not hurt cash yet, but it will if prepayments stop growing.
What to watch: receivables and inventories against contract liabilities at year-end. If the two assets keep rising faster than revenue while prepayments stall, the project book is consuming cash faster than customers fund it, and the dividend would then lean on borrowing.
👓 Other Themes
New AI Ventures With Google and Two Subsidiaries
Lin announced "an expanded collaboration with Google to broaden our AI-enabled services and accelerate consumer AI adoption", with no revenue figure attached. CHT InventAI, spun off a year ago, sells AI governance tools and AgentHub, software for managing AI agents, to banks and government and has begun to earn revenue. In October the group carved out CHT Intelligent Vision Solutions to sell video-analytics services for smart cities.
Government and AI Spending Drive the Order Book
Demand this quarter came from two outside sources. Taiwanese government agencies ordered surveillance, smart-transport and digital-wallet systems, and satellite contracts under the government's joint procurement system passed NT$250 million. AI build-outs lifted US subsidiary revenue 27% on equipment deployment in California and raised profit at Chunghwa Precision Test, which tests AI chips. Both streams depend on budgets Chunghwa does not control.
💲 Other KPIs
Rose 8.8% from a year ago, the first increase this year after two quarters of lower spending; nine-month spending is still down 6.5%. Non-mobile spending, on data centres, cables and satellites, rose 11% while mobile rose 4%. Spending equalled 9.4% of revenue, down from 10.0%, because revenue grew faster.
Cash exceeds borrowings by NT$4.3 billion, against NT$4.0 billion of net debt a year ago. Net cash was NT$9.8 billion at year-end and fell after the NT$40.3 billion dividend payment in the quarter. NT$12.6 billion of loans come due within a year, up from NT$1.9 billion, so refinancing is the next balance-sheet event.
Rose 60% from a year ago, twice the pace of parent profit, because listed subsidiaries that Chunghwa does not fully own, above all chip-testing firm Chunghwa Precision Test, earned more on AI demand. Minority holders took 5.1% of consolidated net income, up from 4.2%, so part of the group's profit growth belongs to outside shareholders.
🔮 Guidance
Unchanged, and now out of date. Nine-month revenue of NT$188.9 billion is already 108% of what the plan assumed for the period. By our math the full-year range leaves NT$53.0–54.7 billion for the fourth quarter, an 18% decline from a year ago at the middle. Lin said the group will exceed its full-year forecasts; it has not published a new range.
Unchanged. Nine-month profit per share of NT$4.25 is already 86% of the middle of the range. By our math the range implies NT$0.57–0.77 for the fourth quarter, against NT$1.20 a year ago. The property gain explains part of the gap, and Hsu said a gain of similar size will not recur soon, but the rest reflects a plan set before the quarter.
Unchanged. Nine months delivered NT$72.5 billion, so by our math the range implies NT$17.8–19.3 billion for the fourth quarter, below last year's NT$21.6 billion. That would put the fourth-quarter EBITDA margin near 34%, the level of last year's final quarter when a 3G equipment write-off hit. The third-quarter margin of 38.0% came in below the 38.2–39.1% the company forecast.
Unchanged. Spending through September was NT$16.2 billion, so the plan leaves about NT$15.7 billion for the fourth quarter by our math, half as much again as the NT$10.4 billion spent in the same quarter last year. Most of the year's budget, NT$24.2 billion, is for non-mobile projects such as data centres, submarine cables and satellites. A fourth quarter well short of that would mean projects slipped into 2027.
❓ Key Questions
How large was the property gain?
Chunghwa did not disclose the revenue or profit from the Taoyuan apartment deliveries. Without it, readers cannot tell how much of the 27% rise in operating income the ongoing businesses produced, or what base next year's third quarter must beat.
What share of ICT revenue is recurring?
Tsai said one-off project revenue still exceeds recurring revenue but declined to give the split. The share decides how much of the 84% order growth becomes multi-year revenue from data centres and cloud rather than one-time equipment sales.
Will Chunghwa publish a new full-year forecast?
Nine-month revenue is already 108% of the nine-month plan, and the unchanged annual range implies a fourth-quarter revenue decline by our math. Lin said the group will exceed the forecast; a revised range would say by how much.
Will fourth-quarter capital spending reach NT$15.7 billion?
By our math the NT$31.9 billion plan leaves that much for the final quarter, half as much again as last year's. The answer shows whether the Linkou AI data centre and the satellite projects are on schedule.
When does the Linkou AI data centre start earning?
Hsu said the Linkou AIDC will serve confirmed customers under long-term contracts once online but gave no date or capacity. The start date sets when recurring ICT revenue gets its next step up.