China Mobile (600941)
Event: on April 21, the company released the report for the first quarter of 2022. In 2022q1, the operating revenue reached 227.3 billion yuan, a year-on-year increase of 14.6%; The net profit attributable to the parent company was 25.6 billion yuan, a year-on-year increase of 6.5%; Net profit deducted from non parent company was 24 billion yuan, with a year-on-year increase of 6.5%. The comprehensive integrated development of chbn led to the steady growth of the company's performance in the first quarter, exceeding expectations. The main business income in 2022q1 was 193.8 billion yuan, a year-on-year increase of 9.1%; Other business income was 33.5 billion yuan, a year-on-year increase of 61.6%, mainly due to the significant increase in mobile phone sales; EBITDA was 76.1 billion yuan, a year-on-year increase of 5.6%.
Accelerate 5g migration in the personal market and help improve mobile ARPU. As of March 31, 2022, the total number of mobile customers of the company is about 967 million. Among them, 5g package customers accounted for 49.9%, reaching 467 million, an increase of about 80 million compared with the end of 2021; 5g network customers accounted for 24.1%, reaching 233 million, an increase of about 26 million compared with the end of 2021. The personal market accelerated from 4G to 5g, the customer structure continued to be optimized, and helped the mobile ARPU increase to 47.5 yuan, a year-on-year increase of 0.3%. The company will continue to deepen the integrated operation of "connection + application + equity", and mobile ARPU is expected to maintain a steady growth trend.
Smart home continues to develop, and broadband customers grow rapidly. The company continues to develop the smart home business represented by mobaihe, improve the penetration rate and value-added service ordering rate, accelerate the upgrading of Gigabit broadband network, and build a "cloud Gigabit + cloud life" service system. As of March 31, 2022, the total number of wired broadband customers of the company has reached 249 million, with a net increase of 8.99 million in the quarter. Among them, the number of home broadband customers reached 225 million, accounting for 90.4% of the total number of wired broadband customers, with a quarterly net increase of 7.27 million, accounting for 80.9% of the net increase of wired broadband customers in a single quarter. 2022q1 wired broadband ARPU and home broadband comprehensive ARPU were 32.4 yuan and 37.8 yuan respectively, with a year-on-year increase of 1.8% and 5.3% respectively.
Promote the integration of government, enterprise and market, promote "network + cloud + dict", and expand the scale of information service business. The company plans to invest 48 billion yuan to build a computing network in 2022, improve the integrated service capacity of computing network, promote the differentiation of mobile cloud and strengthen the competitiveness of information service business. In 2022q1, the business income of dict was 23.7 billion yuan, with a year-on-year increase of 50.9%, which contributed a strong driving force to the company's performance. The company will continue to carry out scale replication in multiple high-frequency and high-value segments, expand information service business, and accelerate breakthroughs in emerging fields.
Investment suggestion: in 2022q1, the company's revenue and scale net profit increased steadily. Under the background of 5g construction and "counting from the east to the west", as a leading enterprise in communication operation, the company expects that the number of 5g users will continue to grow in 2022, the construction of computing network will accelerate, the company is optimistic about the company's smart home business and dict business, and the company's performance is expected to achieve better growth in 2022. We expect that the company's revenue from 2022 to 2024 will be 9268 / 10011 / 1064.5 billion yuan respectively, and its net profit will be 1222 / 1312 / 1388 billion yuan respectively, corresponding to EPS 5.72/6.14/6.50 yuan, with outstanding growth. Give 13 times PE in 2023, corresponding to the 12-month target price of 79.82 yuan, and maintain the investment rating of "Buy-A".
Risk warning: 5g construction is not as expected, and the development of dict is not as expected
