$CHINA MOBILE (00941.HK)$ In 2024, both revenue and net income achieved growth, with overall performance remaining stable. The effectiveness of digital transformation was significant, with its share of Communications Services revenue further rising to over 31%, becoming an important engine for the company's growth.

Amid the wave of rapid AI Technology development, the company has made significant investments in key areas such as computing power networks, reaching a scale of 29.2 EFLOPS by the end of last year.

On the afternoon of the 20th, Thursday, CHINA MOBILE announced its annual performance report for 2024. The key points are as follows:

• Financial performance: Operating revenue reached 1,040.8 billion yuan, a year-on-year increase of 3.1%; Net income attributable to shareholders was 138.4 billion yuan, a year-on-year increase of 5.0%;

• Business development: The number of mobile customers exceeded 1.004 billion, with 5G network customers reaching 0.552 billion; Digital transformation revenue was 278.8 billion yuan, a year-on-year increase of 9.9%, accounting for 31.3% of Communications Services revenue;

• Capital expenditure: In 2024, capital expenditure was 164 billion yuan, accounting for 18.4% of Communications Services revenue, a year-on-year decrease of 2.5 percentage points, primarily used to promote the deepening coverage and upgrade of the 5G network, as well as the construction and optimization of computing power networks.

• Shareholder return: The Board of Directors recommends a full-year payout ratio of 73% for 2024, with a final dividend of HK$2.49 per share, totaling an annual dividend of HK$5.09 per share, an increase of 5.4% year-on-year.

• Strategic progress: Significant upgrades of the 'two new types' (new information infrastructure and service systems), with 5G network investment reaching 69 billion yuan, and over 2.4 million 5G base stations opened cumulatively.

• AI and computing capacity layout: Actively promoting the 'AI+' initiative, creating a universal model with nine skies, having launched 24 AI+ products and 39 AI+ DICT applications, serving 0.19 billion AI product customers; in terms of computing capacity deployment, the scale of general computing capacity reached 8.5 EFLOPS, while the scale of Asia Vets computing capacity reached 29.2 EFLOPS.

Financial performance is stable, and shareholder returns continue to improve.

In the fiscal year 2024, CHINA MOBILE's operating revenue reached 1,040.8 billion yuan, an increase of 3.1% year-on-year, of which Communications Services revenue was 889.5 billion yuan, also a 3.0% year-on-year growth. Net income attributable to shareholders was 138.4 billion yuan, up 5.0%, with earnings per share of 6.45 yuan.

Notably, the company generated free cash flow of 151.7 billion yuan, a significant year-on-year increase of 22.9%, demonstrating strong cash generation capability. The Board of Directors recommends a full-year payout ratio of 73% for 2024, with a final dividend of HK$2.49 per share, together with the already distributed interim dividend, totaling an annual dividend of HK$5.09 per share, an increase of 5.4% year-on-year.

What is more noteworthy is that the company announced that starting in 2024, cash distribution profits will gradually increase to over 75% of the net income attributable to shareholders over three years, further enhancing shareholder returns.

Digital transformation is rapid, with collaborative development in four major markets.

CHINA MOBILE's market layout revolves around CHBN (individual, family, government enterprises, and Emerging Markets), with significant transformation results. In 2024, revenue from digital transformation reached 278.8 billion yuan, a year-on-year increase of 9.9%, accounting for 31.3% of Communications Services revenue, an increase of 1.9 percentage points from the previous year, becoming an important engine for company growth.

In the personal market, the company strengthened the "connection + application + rights + Hardware" strategy, with mobile customers exceeding 1 billion, and 5G network customers reaching 0.552 billion, with a penetration rate of 55.0%. The mobile ARPU is 48.5 yuan, maintaining an industry-leading position.

The family market performed well, with revenue reaching 143.1 billion yuan, a year-on-year increase of 8.5%. Family broadband customers reached 0.278 billion, with gigabit family broadband customers reaching 0.099 billion, an increase of 25.0%. The comprehensive ARPU for family customers reached 43.8 yuan, a year-on-year increase of 1.6%.

Revenue from the government enterprise market reached 209.1 billion yuan, a year-on-year increase of 8.8%. Mobile cloud income reached 100.4 billion yuan, a year-on-year increase of 20.4%, with IaaS + PaaS revenue scale firmly among the top five in the industry. Revenue from 5G private networks reached 8.7 billion yuan, significantly increasing by 61.0% year-on-year.

Revenue from Emerging Markets reached 53.6 billion yuan, a year-on-year increase of 8.7%, among which digital content revenue reached 30.3 billion yuan, a year-on-year increase of 8.2%, with Migu Video having 0.52 billion monthly active customers across all scenarios.

The new information infrastructure leads the Industry, significantly enhancing computing power networks.

As the core of the "two new types" plan, CHINA MOBILE continues to improve its new information infrastructure. In the 5G network area, an investment of 69 billion yuan is made in 2024, with a cumulative total of over 2.4 million 5G base stations opened, creating the world's first large-scale commercial 5G-A network.

In terms of computing power networks, the company actively implements the national "East Data West Computing" project deployment, with the general computing power scale reaching 8.5 EFLOPS, and intelligent computing power scale reaching 29.2 EFLOPS. The national multi-level, comprehensive smart computing capability layout continues to improve, with the first batch of 13 smart computing center nodes put into production. The company's system builds a computing power optical network that spans east and west, radiating through hubs, continuing to optimize the "1-5-20ms" three-level low-latency computing power service circle.

AI + Global Strategy is fully emerging, with product innovation blossoming at multiple points.

CHINA MOBILE seizes the opportunity for AI development, clearly defining its roles as 'Supplier, Aggregator, and Operator', and accelerating the shift from ' + AI' to ' AI + '. The company independently tackles the Nine-Day General Model, supporting language, vision, voice, structured data, multimodal and various sizes, and plans to lay out 40 AI industry large models.

In terms of product applications, the company has launched 24 AI + products and 39 AI + DICT applications, accelerating a comprehensive upgrade to intelligent services. In the government and enterprise market, industry applications such as AI inspection and AI quality inspection have been introduced; in the public market, an AI product family has been constructed, upgrading strategic products like video ringtones, 5G new calls, and Mobile Cloud Disk, and releasing the CHINA MOBILE AI intelligent assistant Lingxi Robot. By the end of 2024, the total number of 'AI-based products' customers is expected to reach 0.19 billion.

Embrace the opportunities and challenges of the AI + new era.

Looking ahead, CHINA MOBILE's management believes the company has entered a critical phase where strategic opportunities, kinetic energy transformation, and reform challenges intertwine. Although facing challenges such as a complex and changing macroeconomic environment and intensified industry competition, the new round of technology revolution and industrial transformation driven by AI has created vast space for the company.

The company will continue to deepen the implementation of the '1225' Global Strategy, comprehensively promote the 'three major plans', deepen reform efforts, achieve innovative breakthroughs, further strengthen 'two new types', expand the scale effect of 'AI +', continuously build a new pattern of high-quality development, and move towards the goal of being a world-class information service technology innovation company.

Editor/rice