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2026-11-02 12:36:51 BOC International released a research report stating that CHINA MOBILE (00941.HK)'s third-quarter profit fell 12.4% YoY to RMB27.3 billion, while service revenue declined 5.1% to RMB205 billion, mainly affected by the VAT rate hike starting from 2026. Traffic growth remained resilient, supporting stable fundamentals, and the broker expects earnings recovery to become clearer in 2027. The broker noted that CHINA MOBILE's computing power service revenue in 1H26 increased 14% YoY, driven by AIDC and intelligent computing power, with earlier investments beginning to translate into growth. Computing power and AI services accounted for 22.6% of core business revenue, up 2.2 ppts YoY. The broker expects AI computing power to become an important new growth engine, although short-term margins may face some dilution pressure. Third-quarter EBITDA fell 7% YoY to RMB73.9 billion, while the margin decline narrowed to 0.7 ppts. Operating expenses fell 1.8% YoY, reflecting proactive cost control. The broker adjusted its earnings forecasts for CHINA MOBILE for 2026 to 2028 by -6%, +0.6% and +1.8%, respectively, to reflect continued VAT pressure and AI computing power expansion. It also lowered the DCF-based TP from HKD96 to HKD93.04 and reiterated the Buy rating. Interim DPS rose 0.3% YoY to RMB2.51. Management previously guided for a stable-to-rising payout ratio in 2026, supporting an industry-leading dividend yield of about 7.2%. The broker currently ranks the sector as CHINA MOBILE (00941.HK) > CHINA TELECOM (00728.HK) > CHINA UNICOM (00762.HK), favoring CHINA MOBILE for its resilient earnings base, scale advantages and stronger shareholder returns. (da/)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |