Financial Services Association, March 21 (Reporter Fu Jing) Today, after the market, China Mobile (600941.SH)'s annual report was released. Last year, its revenue exceeded trillion dollars. Communications service revenue was higher than the industry average growth rate, while digital transformation contributed nearly 90% to the increase in communications service revenue, which was also the number one driving force for China Mobile's revenue growth last year.

According to financial data, China Mobile achieved revenue of 1009.309 billion yuan last year, up 7.7% year on year; achieved net profit of 131,766 billion yuan, up 5.0% year on year, and the profit scale also reached a record high; EBITDA was 341,478 billion yuan, up 3.7% year on year, and EBITDA accounted for 39.5% of communications service revenue. Among them, communications service revenue reached 863.5 billion yuan, up 6.3% year on year, higher than the industry average growth rate.

Specifically, the total number of connections reached 3.35 billion, a net increase of 410 million. CHBN (note: individual market, household market, government and enterprise market, and emerging markets respectively) all grew. HBN revenue accounted for 43.2% of communications service revenue, up 3.4% year on year. Among them, in the government and enterprise market, Mobile Cloud steadily ranked first among domestic cloud service providers, with revenue reaching 83.3 billion yuan, up 65.6% year on year. Self-powered revenue increased by more than 100% year on year; sales volume of cloud computers exceeded 2.7 million units, an increase of more than 10 times over the previous year.

Last year, China Mobile's digital transformation revenue reached 253.8 billion yuan, an increase of 22.2% over the previous year, contributing 89.7% to the increase in communications service revenue, accounting for 29.4% of communications service revenue — a CIFA reporter learned from China Mobile that digital transformation is the number one driving force for China Mobile's revenue growth.

In terms of new information infrastructure construction, China Mobile has opened more than 1.94 million 5G base stations, and gigabit broadband covers 390 million households. The world's largest REDCap commercial network was deployed, the world's first 5G new call network was built, and research and testing of 5G-A new technology solutions were promoted in an orderly manner. At the same time, a nationwide computing power network with comprehensive leading technology and scale was initially built. The data center capacity covered all of the country's “East Digital and Western Computing” hub nodes, and the general computing power scale reached 8 EFLOPS. Construction of the Hohhot hyperscale Single Computing Center and 12 intelligent computing center regional nodes in 11 provinces began. The “N+X” multi-level, full-coverage intelligent computing capability layout was formed at an accelerated pace, and the scale of intelligent computing power reached 10.1 EFLOPS.

In terms of computing network applications, the “Tianqiong” computing network brain was tested and commercialized throughout the network last year, supporting 115 types of network services such as East Digital and Western Computing, Intelligent Computing Supercomputing, and Data Express; the “Baichuan” computing power grid-connected platform was released to manage more than 3.3 EFLOPS social computing power from more than 10 manufacturers. According to China Mobile, the “Computing Leader” is poised for large-scale, standardized, and commercial operation.

At the same time, the reporter noticed that China Mobile's capital expenditure last year was 1803 billion yuan, with capital expenditure accounting for 20.9% of communications service revenue, down 1.9 percentage points from the previous year; free cash flow was RMB 123.5 billion, an increase of 29.2% over the previous year.

China Mobile estimates that this year's total capital expenditure will be about 173 billion yuan, down 4.0% from last year, and the capital expenditure ratio is expected to fall below 20%. It will mainly be used to promote leading connectivity perception, accelerated computing power development, capacity intensive efficiency and infrastructure expansion layout, and support CHBN's business development. Among them, the capital expenditure of 5G networks is about RMB 69 billion, mainly from cash flow from operating activities. By the end of this year, the company will have opened 2.35 million 5G base stations, with an intelligent calculation scale exceeding 17 EFLOPS.

However, China Mobile also admits that its transformation and development is also facing some uncertainties. On the one hand, the external environment is complex and severe, and supply chain security is facing challenges due to international trade and technical barriers, which have an impact on operations to a certain extent; on the other hand, the trend of integrated innovation and cross-border integration and development of information technology is more obvious. New technologies such as AI bring disruptive changes to the form of information services. Upstream and downstream industrial chains seize core links in the value chain through capacity integration and ecological aggregation, and market players in the information services sector are more diverse and more intense.

It is worth mentioning that the board of directors of the company recommended a dividend rate of 71% for the full year of 2023, and that a final dividend of HK$2.40 per share for the year ended December 31 last year be paid to all shareholders. Together with the interim dividends already paid, the total dividend for the full year of 2023 was HK$4.83 per share, an increase of 9.5% over the previous year. Starting this year, profits distributed in cash within three years will gradually increase to more than 75% of the profits due to shareholders in that year.