China Mobile (600941)
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 848.3 billion yuan, a year-on-year increase of 10.4%, including a main business revenue of 751.4 billion yuan, a year-on-year increase of 8.0%, and an EBITDA of 311 billion yuan, a year-on-year increase of 9.1%. The net profit attributable to the parent company was 115.9 billion yuan, a year-on-year increase of 7.5%. The company announced a final dividend of HK $2.43 in 2021, and the annual dividend ratio reached 60%.
The strong reversal of mobile business and the strong growth of Jiakuan business. In 2021, the company’s mobile business revenue was 483.4 billion yuan, a year-on-year increase of 1.4%, and the household market revenue was 100.5 billion yuan, a year-on-year increase of 20.8%. The company has 957 million mobile customers, with a net increase of 14.97 million, and the net increase has changed from negative to positive. Arpu48. Mobile business of the company 8 yuan, up 3.0% year-on-year, reversing the downward trend. The company has 218 million home broadband customers, with a net increase of 25.88 million. The growth rate is leading in the industry, and the home broadband arpu39.9% 8 yuan, a year-on-year increase of 5.6%, maintaining a good growth. We believe that with the full cultivation of traffic consumption habits, the rise of 5g penetration rate and the slowdown of the pace of raising speed and reducing fees, the stabilization and recovery trend of the company’s C-end business will continue to provide strong security support for the company’s future revenue and profits.
The business scale of government and enterprises has broken through, and the mobile cloud has performed brilliantly. In 2021, the company will give full play to the integrated service capability of integrated computing network and the advantages of fully equipped national localized services, focus on key industries and promote the scale expansion of “network + cloud + dict” in an integrated manner. In 2021, the company’s government enterprise market revenue was 137.1 billion yuan, up 21.4% year-on-year, accounting for 18.3% of its main business, up 2.1pp. Among them, the mobile cloud revenue was 24.2 billion yuan, a year-on-year increase of 114%, accelerating towards the top cloud manufacturer camp. The revenue of Internet of things was 11.4 billion yuan, a year-on-year increase of 21.3%, and the number of Internet of things connections reached 1.049 billion.
Attach great importance to shareholder returns and greatly increase the proportion of dividends. The company’s annual cash dividend accounted for 60% of the profits attributable to shareholders in 2021. The final dividend of the year was HK $2.43 per share, an increase of 38.0% year-on-year. Together with the interim dividend of HK $1.63 per share, the total dividend of 2021 was HK $4.06 per share, an increase of 23.4% over 2020. At the same time, the profits distributed in cash within three years from 2021 will gradually increase to more than 70% of the profits attributable to the shareholders of the company in that year.
In 2022, capital expenditure was basically flat, shifting from 5g to cloud capacity-building. The company’s capital expenditure in 2021 was 183.6 billion yuan, of which 5g capital expenditure was 114 billion yuan. The company expects capital expenditure of 185.2 billion yuan in 2022, including 110 billion yuan of 5g capital expenditure. By the end of the year, it plans to open 1.1 million 5g base stations, including 48 Shenzhen Sdg Information Co.Ltd(000070) 0m base stations. The company plans to put into operation 4.85 million sets of cloud servers, with a total capital expenditure of more than 20.25 million yuan.
Investment suggestion: maintain the “buy” rating. We expect the company’s revenue to be 9331 / 10171 / 1098.4 billion yuan in 2022 / 2023 / 2024, and the net profit attributable to the parent company to be 124.5/132138.5 billion yuan. With the rise of dividend yield and the upward inflection point of the company’s operation, the company’s valuation space is expected to be further opened.
Risk tip: 5g penetration rate does not meet expectations and market competition intensifies.
