occurrences

The company released its 2024 Q3 performance report. The company achieved operating income of 791.458 billion yuan in the first three quarters, up 2.05% year on year; net profit to mother was 110.881 billion yuan, up 5.09% year on year; net profit after deducting non-return to mother was 100.5 billion yuan, up 3.61% year on year. Among them, Q3 2024 achieved operating income of 244.714 billion yuan, a year-on-year decrease of 0.05% and a decrease of 13.54%; net profit to mother of 30.68 billion yuan, an increase of 4.59% year-on-year and a decrease of 39.36% month-on-month; net profit after deducting non-return to mother of 27.462 billion yuan, an increase of 1.03% year-on-year and a decrease of 41.49% month-on-month.

The company accelerates the popularization of 5G and continues to consolidate the customer base in the individual market. The company strengthens market segmentation, deepens traffic operations, and consolidates the foundation of the individual market. As of September 30, 2024, the company's total number of mobile customers reached 1.004 billion, up 1.41% year on year, with 5G network customers reaching 0.539 billion, up 26.82% year on year; in the first three quarters, mobile internet traffic was 123.9 billion Gb, up 2.06% year on year; mobile internet DOU reached 15.7 GB/household/month, up 0.64% year on year; mobile ARPU was RMB 49.5, a decrease of 3.32% year on year.

Actively promote leading gigabit drive broadband

In the household market, the company is actively creating new growth points such as FTTR and HDICT. As of September 30, 2024, the total number of the company's wired broadband customers reached 0.314 billion, up 6.44% year on year; in the first three quarters, the comprehensive ARPU for home customers was RMB 43.2, up 2.61% year on year. In the government and enterprise market, as of the first three quarters of 2024, the company's DICT business revenue was RMB 86.6 billion, an increase of 26.4% over the previous year.

The company continues to develop with high quality and is given a “buy” rating

We expect the company's revenue for 2024-2026 to be 1064.218/1122.586/1189.776 billion yuan, with year-on-year growth rates of 5.44%/5.48%/5.99%, respectively; net profit to mother is 140.079/148.668/157.886 billion yuan, with year-on-year growth rates of 6.31%/6.13%/6.20%, and EPS 6.52/6.92/7.35 yuan/share, respectively. In view of the company's efforts to improve its core competitiveness, vigorously promote digital transformation and high-quality development, we maintain a “buy” rating.

Risk warning: risk of user growth falling short of expectations; risk of government business payments falling short of expectations; risk of increased competition in the industry.