Key investment points
From January to November, the revenue of the telecommunications industry increased by 8.1% year-on-year and maintained a rapid growth trend. From January to November, the revenue of telecommunications services increased by 8.1% year-on-year and maintained a rapid growth trend. Among them, emerging services / mobile data services / fixed data services drove the growth of 3.6/1.9/1.6pct respectively; From January to November, the total amount of telecom services calculated according to the unchanged price of the previous year increased by 28% year-on-year.
The cumulative telecom business income has continued to grow from 0.0% from January to August 2019 to 8.1% from January to November 2021. Our previous judgment on the formation of telecom business income inflection point has been verified. Under the trend of digital transformation and 5g evolution, we continue to be optimistic about the development of operators during the 14th Five Year Plan period.
China Mobile: the repurchase plan will effectively thicken EPS and achieve high-quality growth throughout the year
The company plans to repurchase no more than 2047548289 Hong Kong shares (equivalent to no more than 10% of the Hong Kong shares issued at the 2021 annual general meeting), which will effectively thicken the company’s EPS and enhance the value per share. The company predicts that the operating revenue in 2021 will be about 844.9-852.6 billion yuan, with a year-on-year increase of about 10-11%; The net profit attributable to the parent company was about 114.3-116.5 billion yuan, with a year-on-year increase of about 6-8%; The net profit attributable to the parent company after deducting non profits was about 107.3-109.3 billion yuan, with a year-on-year increase of about 5-7%.
China Telecom Corporation Limited(601728) : Tianyi cloud implemented equity diversification reform and introduced four major state-owned assets
Tianyi cloud Technology Co., Ltd., a subsidiary of China Telecom Corporation Limited(601728) introduced four central enterprises: China Electronics Technology, China Electronics, China Chengtong and China Guoxin through capital increase and share expansion. All partners will focus on the key core technologies of cloud computing, the construction of domestic ecosystem and the application of secure and trusted cloud products, promote deeper business collaboration, build closer partnerships and jointly build a “national team” in the field of cloud computing.
China United Network Communications Limited(600050) : plan the second phase of equity incentive and strengthen the implementation of strategy in the transition period
China United Network Communications Limited(600050) (A shares) disclosed the second phase of restricted stock incentive plan (Draft), which plans to grant no more than 900 million restricted shares to about 8000 incentive objects (core management talents and professionals), accounting for about 2.9% of the current total share capital, with a price of 2.48 yuan per share. The unlocking conditions require that the growth rate of income and profit should not be lower than the industry average, and the improvement percentage point of roe requires the industry to be higher, Reflect the confidence and determination of high-quality development.
Investment suggestion: highlight the value of the sector
On the 5th, China Mobile (A-share) will be listed on the Shanghai Stock Exchange, with multiple catalysts such as repurchase, equity incentive and equity diversification reform. The valuation of operators is expected to improve. At present, H-share China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) 0.69 times, 0.48 times and 0.30 times are significantly lower than 1.13 times, 0.69 times and 0.68 times of the five-year historical center, and 1.59 times lower than the global comparable level. The industry fundamentals are stable and positive, with a high dividend rate, and the investment value of the operator plate is prominent.
Risk warning: the operator’s expenses exceed expectations; 5g application development is not as expected.
