China Mobile (600941)
Business upgrading and transformation, digital intelligence and new driving force to accelerate the development of business
In 2021, China Mobile achieved an operating revenue of 848.26 billion yuan, a year-on-year increase of 10.44%, an EBITDA of 311.01 billion yuan, a year-on-year increase of 9.1%, and a net profit attributable to the parent company of 115.94 billion yuan, a year-on-year increase of 7.51%.
Chbn's layout in all fields, 5g drives the stabilization and recovery of the personal market, transformation and upgrading, structural optimization, and promotes the rapid growth of business. Among them, 5g business in the personal market has been significantly driven, and customers and ARPU have stabilized and rebounded simultaneously, driving the recovery of business income; The growth of the household market remained strong, with both volume and price rising; The government enterprise market has accelerated to catch up and provide the main growth momentum; Emerging markets have made positive layout and achieved remarkable results in innovation.
Transformation and upgrading, continuously increasing R & D investment, slowing capital expenditure and accelerating the release of profits. We believe that the ratio of capital expenditure to revenue of Chinese operators is much higher than that of overseas operators, and the occupation of free cash flow makes Sinotrans Limited(601598) operators have a fault in the global industry valuation system. In 2021, the capital expenditure / depreciation and amortization rate was 1.00, which continued to decrease after 2017. With 5g capital expenditure remaining stable, it is expected that the pressure of depreciation and amortization in the later stage is expected to be reduced and the profit space will be released.
5g capex gradually decreased, alleviated the pressure of depreciation, focused on industrial digitization and accelerated growth momentum
We believe that with the 5g network construction entering the post cycle, the capex investment on the mobile terminal is expected to reduce the depreciation pressure. At the same time, with the full coverage of 5g network, relevant applications are expected to start. Therefore, the company has increased its investment in digital transformation business, focusing on computing network and smart middle office business, so as to provide growth momentum for hBN digital transformation business.
Positioning as a world-class information service science and technology innovation company, SunPower network set sail
5g industry terminal has entered the stage of replication acceleration, and to B application has been continuously improved; China Mobile's 5g vertical industry has maintained a leading position, and many industries including smart mine, smart factory, smart power, smart metallurgy, smart port and smart hospital have entered the stage of scale replication.
We believe that with the advent of the computing power network era and the rapid development of the digital economy, "connection + computing power + capability" has gradually become an important cornerstone to support the digital intelligence transformation of the whole society. Operators rely on their own integration advantages to accelerate industrial innovation, transformation and upgrading and actively build. The company anchored the positioning of information service technology innovation company, actively promoted the construction of new infrastructure, systematically built a new information infrastructure focusing on 5g, computing network and smart console, accelerated the integrated application of information technology and data elements, and created a new growth model driven by digital intelligence.
Undervalued and high dividends, operators have become a safe haven for funds in repeated market fluctuations
Investment advice
Considering that the overall valuation level of the operator industry is at a historically low level and the company's new positioning in the era of computing power network, the company's revenue is expected to be 895.54/938.27/979.79 billion yuan from 2022 to 2024, and the expected earnings per share are 5.8/6.1/6.4 yuan respectively, corresponding to 66.0 yuan / share on March 25, 2022, with PE 11.4/10.8/10.3 times and Pb 1.7/1.6/1.5 times respectively, It is still lower than the global industry average and is rated as "overweight" for the first time. Risk statement
5g network construction and promotion are not as expected; The construction of computing network is not as expected; The development of industrial intellectualization is less than expected; Systemic risk.
