Incident: China Mobile released its 2024 quarterly report, achieving operating revenue of 263.7 billion yuan, up 5.2% year on year, including main business of 219.3 billion yuan, up 4.5% year on year, net profit to mother of 29.6 billion yuan, up 5.5% year on year, net profit after deducting net profit of 261 billion yuan, up 8.4% year on year.
Here are our reviews:
Comprehensively promote digital intelligence transformation and high-quality development. Business development is showing a good trend in the individual market, adhering to the integration and expansion of “connection+application+equity”, improving the existing customer operation system, continuously strengthening scenario operations, deepening integrated development, and further consolidating the scale and value foundation of growth. As of March 31, '24, the total number of mobile customers in the company was 996 million, of which the number of 5G package customers reached 799 million, and the number of 5G network customers reached 488 million; in 24Q1, mobile Internet traffic increased 3.3% year-on-year, and mobile Internet DOU reached 14.9 GB; and mobile ARPU was 47.9 yuan.
In terms of the home market, build a “full gigabit+ cloud life” smart home ecosystem, promote the large-scale development of home security, mobile HD, and intelligent networking, upgrade the smart home ecosystem, and enhance the value contribution of HDICT. As of March 31, '24, the total number of the company's wired broadband customers reached 305 million, with a net quarterly increase of 6.83 million, of which home broadband customers reached 269 million, a net quarterly increase of 5.28 million; the comprehensive ARPU for household customers in 24Q1 was 39.9 yuan, an increase of 1.8% over the previous year.
In terms of the government and enterprise market, we will promote “network+cloud+DICT” scale expansion, increase commercial market expansion efforts, promote standardization, commercialization and platformization of government and enterprise solutions, deepen industry digital intelligence services, and promote high-quality development. 24Q1 Company's DICT business revenue continued to grow well.
Continue to increase dividends and pay attention to shareholder returns
Previously, the board of directors of the company proposed a dividend payout rate of 71% for the full year of 2023. In order to better give back to shareholders and share development results, the company fully takes into account profitability, cash flow conditions and future development needs. Starting in 2024, profits distributed in cash will gradually increase to more than 75% of the profit that shareholders should account for that year, and strive to create greater value for shareholders.
Profit forecasts and investment suggestions:
The company's CHBN continues to grow well, the 5G penetration rate continues to increase, smart homes are being effectively expanded, cloud business is growing rapidly in government and enterprise affairs, and its leading edge continues to be consolidated, and we are optimistic about the company's future development. The net profit for 24-26 is estimated to be 1426/1531/164.3 billion yuan, maintaining a “buy” rating.
Risk warning: industry competition exceeds expectations, cost investment exceeds expectations, new business progress is slower than expected, etc.