China Mobile (600941)
With good fundamentals and multiple factors, Telecom’s “lessons from the past” are difficult to reproduce. China Mobile Online + offline investors abandoned the purchase of 756 million yuan in total, and the market is still worried about the stock price performance of the company after returning to a. However, we don’t think we need to be overly pessimistic. On the one hand, the fundamentals of the company are good. According to the company’s performance forecast, the revenue growth rate in 21 years is 10% – 11%, the profit growth rate is 6% – 8%, the dividend payout rate of the company has remained above 50% in the past two years, and it is expected to exceed 60% this year and next; On the other hand, the premium rate of ah shares of the company is lower than that of its peers. In addition to the escort of the “green shoe” mechanism, the company has also taken three-year measures to stabilize the A-share price. At the same time, the company plans to repurchase no more than 10% of Hong Kong shares, and multiple factors fully protect the interests of investors.
Traditional businesses are basically stable, and industrial digitization is expected to open up growth space. End C: the number of mobile users continues to lead, the 5g penetration rate increases to drive the improvement of ARPU, the logic of mobile services changes from volume to price, and the 700m gold band complements the existing spectrum resources to achieve good network coverage. H-end: the market share continues to lead, the family integration package drives the growth of ARPU, and the wired broadband service is expected to usher in a simultaneous increase in volume and price. End B: facing the industrial digital blue ocean market, the company has the advantages of multiple resource endowments such as cloud, Internet, Internet of things and security, has a good customer base and channel resources, and has abundant cash flow, which can effectively promote the implementation of digital transformation projects. N-end: the four major fields of international business, equity investment, digital content and financial technology are fruitful, with a forward-looking layout of the universe, and objectively have the technical reserves of the whole industry chain at the edge of the cloud network.
Capital expenditure increased moderately, and the cost was rigid and controllable. In capex, compared with 3G and 4G periods, 5g network construction has a longer life cycle, which is conducive to easing the profit pressure brought by capital expenditure. In the future, with the deepening of mobile radio and television 5g co construction and sharing, the gradual withdrawal of 2 / 3G equipment and the extension of 4G equipment depreciation life, it is expected that the proportion of depreciation and amortization in revenue is expected to remain stable or decline slightly. In terms of opex, the proportion of tower electricity payment in the operator’s revenue remains stable. At the same time, 5g base station can achieve a significant reduction in power consumption through chip, software and other technical upgrades, and the power consumption of 5g base station is better than expected; The penetration and coverage capacity of 700m band is much higher than that of high-frequency band, and its coverage capacity will be more than three times that of the existing 5g network, which can greatly reduce the number of base stations deployed, so as to save the cost of station construction and further save depreciation and operation and maintenance costs; The industry competition of operators tends to be rational, and the proportion of sales expenses is also expected to decline.
Investment suggestion: the company’s traditional businesses such as mobile and fixed network maintain steady growth, and the industrial digital business is expected to open up long-term growth space. At the same time, when the capital expenditure and cost are relatively rigid, the profit is expected to improve. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 115.052/125007/133.321 billion respectively, corresponding to PE of 11x / 10x / 9x and Pb of 1.0x/1.0x/1.0x. Considering that the company has good fundamentals and the dividend yield is expected to be further improved, it has allocation value in the long run. For the first coverage, give a “recommended” rating.
Risk warning: market competition is further intensified, and ARPU is down; 5g permeability is lower than expected; The development of industrial digitization is less than expected
