“一利五率”体系下，重视利润增长、ROE 优化、现金流、研发等方向。上半年数据看，年化ROE 提升至12%，年初变更5G 相关设备折旧年限后，上半年折旧及摊销减少约95.35亿元；资本开支优化至640 亿元（对比23H1 814 亿元）；管理费用、财务费用亦不同程度优化，成本管控下收入-成本剪刀差明确。单三季度经营净现金流同比、环比分别增20.15%、24.47%；报表科创属性强，前三季度研发费用累计超200 亿元，研发比例进一步提升；算网建设提速，据半年报24H1 通用算力建设达8.2 FLOPS、智能算力19.6EFLOPS（已达成管理层年初对全年指引，预计后续继续增加）。深耕行业，量质并进。Key points of investment:
Incident: The company released its 2024 three-quarter report. During the reporting period, the company achieved revenue of 791.458 billion yuan YOY +2.05%, and net profit of 110.881 billion yuan YOY +5.09% to mother.
Overall results are in line with forward-looking expectations and are expected to achieve good growth guidelines throughout the year. Revenue and net profit growth rates for the first three quarters were 2.05% and 5.09% respectively, while revenue and net profit growth rates for the third quarter were -0.05% and 4.59% respectively. From a user data perspective, the Q1-Q3 mobile business increased net customers by 12.98 million, and the total number of customers exceeded 1 billion, and mobile ARPU was 49.5 yuan; the net increase in cable broadband customers was 15.36 million, the total number of customers was 0.314 billion yuan, and the comprehensive household ARPU was 43.2 yuan. The overall business market is stable. Although the market often discusses changes in demand for popular telecom services and changes in ARPU, we believe that in addition to factors such as the 5G penetration process and changes in individual user package consumption, more attention should be paid to transformational revenue contributions such as the continuous strengthening of user infrastructure and scale effects, growth in individual/household income, and integration of rights and interests. In fact, the overall demand for telecommunication services is resilient and long-term deterministic.
Under the “one profit, five rate” system, emphasis is placed on profit growth, ROE optimization, cash flow, R&D, etc. According to data for the first half of the year, annualized ROE increased to 12%. After changing the depreciation period for 5G-related equipment at the beginning of the year, depreciation and amortization decreased by about 9.535 billion yuan in the first half of the year; capital expenditure was optimized to 64 billion yuan (compared to 23H1 81.4 billion yuan); management expenses and financial expenses were also optimized to varying degrees, and the difference between revenue and cost under cost control was clear. Net operating cash flow for the third quarter increased by 20.15% and 24.47%, respectively; the report had strong science and technology innovation attributes, with cumulative R&D expenses exceeding 20 billion yuan in the first three quarters, and the R&D ratio further increased; computing network construction accelerated. According to the semi-annual report 24H1, general computing power construction reached 8.2 FLOPS and intelligent computing power 19.6 EFLOPS (it has reached management's guidelines for the whole year at the beginning of the year, and is expected to continue to increase). Deeply cultivate the industry and advance in terms of quantity and quality.
In addition to leading growth attributes in science and innovation, the company still has strong dividend allocation value. The mid-year dividend was HK$2.60 per share, up 7.0% year on year. The dividend ratio for the full year is expected to increase further compared to 23. Combined with the operator's profit growth and current cash flow, there is still a possibility that its dividend value will increase further. The high dividend strategy is also the best expression of the social responsibility and social feedback of central enterprises. Telecom operators are the crossroads of “big security,” “central enterprise valuation system,” and “digital economy.” The important future growth direction is reflected in the growth of AI domestic computing power, the digital transformation of industry customers, and the further penetration of cloud network demand.
Maintain a buy rating. China Mobile is currently in the development period of old and new kinetic energy conversion. Its leading attributes in science and innovation are prominent, ushering in a new starting point of growth. According to the company's disclosure of business development goals for 2024, it is expected to “strive to achieve good revenue and profit growth” throughout the year. Based on this, we expect net profit to be 139.157, 146.81, and 155.122 billion yuan respectively for 2024-2026, with growth rates of 5.6%, 5.5%, and 5.7% respectively. Currently, the market has a preliminary understanding of the dividend value of cloud networks in the context of the digital economy, and there is still room for further reevaluation of cloud-based AI/data capabilities. The fundamentals are steadily improving, and the scale effect is remarkable.
Risk warning: Industry customer penetration falls short of expectations; insufficient innovation efficiency limits product improvement; government and enterprise customers are under greater budget and payment pressure for digital transformation than expected.
