What You Need To Know About China Mobile Ltd

China Mobile Ltd (SEHK:0941) is the leading telecommunication companies in China. The company provides a wide range of telecommunications services in China, such as mobile and fixed-line broadband, GSM, fixed line, information and communications technology, data communications, and other services.

STOCK INFORMATION

TICKER SYMBOL: SEHK:0941
MARKET CAP: HK$ 1,785 Billion (Updated 25 May 2016)
MARKET PRICE / SHARE: HK$ 87.20 (Updated 25 May 2016)
SECTOR: Utility
INDUSTRY: Telecommunications

THE BUSINESS: China Mobile

Listed on both the Hong Kong Stock Exchange and New York Stock Exchange (ADR), China Mobile is one of the main telecommunication companies in China. Majority owned by the State-owned enterprise, China Mobile Communications Corporation, the company currently (Apr 2016) serves about 835 million customers and has more than 300 million 4G customers. To place things in perspective, their competitor China Unicom Ltd had 260 million mobile subscribers in Apr 2016, close to a third of China Mobile.

As China’s leading telco a 63% market share, China Mobile has a network is able to support coverage for over 1.2 billion people.

KEY STATISTICS (FY2015) 

Net Revenue: RMB 668 Billion
Net Income: RMB 108.5 Billion
Total Assets: RMB 1,428 Billion
Earnings per Share: RMB 5.30
Dividend per Share: RMB 2.21
Net Income Margin: 16.2%
ROE: 12.0%

KEY OPPORTUNITIES

1. Rise of Data
Data usage is growing fast in China. With a strong 4G network and the largest 4G customer base, the company is well-positioned to capture the growth in data. In FY2015, revenue from data usage surpasses those of voice revenue, the first in the company’s history.

Moreover, as technology advances, there would be more and more appliances that require the internet to function. The internet-of-things industry is growing rapidly. With more and more usage and demand for internet access, telecommunication services are needed more than ever.

2. Government Support
The China government is very supportive of improving the infrastructure in China. Telecommunication is a key infrastructure pillar for China. The strong government support means that it is in the country’s interest to see the big three telcos succeed.

KEY RISKS

1.High Penetration
Out of a country with 1.3 billion in population, China Mobile already served more than 800 million customers. The market is turning to a saturation point, thus, the growth might be slowing as well.

2. Tariff
With more competition, the pricing of the telcos might be under pressure. As the market becomes more competitive, we might see more price competition among the three telcos, reducing margins for everyone.

VALUATION

China Unicom is currently trading around 13.9 times its earnings and offers a 3.1% dividend yield.

LISTED PEERS

1. China Telecom Corp (HK:0728)
2. China Unicom (HK:0762)

INVESTOR RELATIONS

Investor Relation Material:
–Annual Report
–Financial Information

Address: 60th Floor, The Center,
99 Queen’s Road Central, Hong Kong
Tel: (852) 3121 8888
Fax: (852) 2511 9092
Email: ir@chinamobilehk.com

TOP SHAREHOLDERS DIRECT INTEREST (31 March 2016)

1. China Mobile Communications Corp – 72.72%
2. Blackrock Inc – 0.90 %
3. Capital Research And Management – 0.81%

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