Incident: China Mobile released its 2024 quarterly report. In the first quarter of 2024, the company achieved operating income of 263.7 billion yuan, a year-on-year increase of 5.2%; net profit to mother of 29.6 billion yuan, an increase of 5.5%; and EBITDA780 billion yuan, a year-on-year decrease of 2.3%.
Broadband ARPU has been steadily improved. The company's mobile ARPU was 47.9 yuan, the same as the previous year. The total number of mobile customers reached 996 million, including 465 million 5G network customers. On the home side, China Mobile's comprehensive home ARPU was 39.9 yuan, an increase of 1.8% over the previous year. Among them, the number of home broadband customers reached 269 million, a net quarterly increase of 5.28 million.
The digital business is growing well. 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. In the first quarter, the company's DICT business revenue continued to grow well.
The nine-day big model shines a sword. On April 2, the China Internet Communications Office published a list of major models. China Mobile's “Nine Day Natural Language Interaction Big Model” is on the list, marking that China Mobile's nine-day AI model can officially provide generative artificial intelligence services to the outside world. It also became the first major model developed by a central enterprise to simultaneously pass the national “Generative Artificial Intelligence Service Filing” and the “Domestic Deep Synthesis Service Algorithm Filing”. Based on the nine-day natural language interaction model, China Mobile has achieved a series of industry-enabling achievements. It has not only built the “Nine Days · Zhongqing Foundation Big Model” for key industries, but has also accelerated the construction of more than 20 major industry models.
Investment advice: The company's overall performance in the basic business is growing steadily. Through investment and deep cultivation in the digital business, the digitalization of the company's industry has shown results in AI and other fields. We are optimistic about the company's development and forecast that in 2024-2026, the company will achieve revenue of 1119.324 billion yuan, 1236.853 billion yuan, and 1354.354 billion yuan; net profit to mother of 143,659 billion yuan, 159.564 billion yuan, and 178.991 billion yuan; EPS 6.71, 7.46, 8.37, PE 16X, 14X, 12X, maintaining a “buy” rating.
Risk warning: Industrial digitization falls short of expectations; technology implementation falls short of expectations; increased market competition; risk of loss of users.