China Mobile's nine-month profit falls 7.9% on higher costs

Overview

• China telecom operator's nine-month operating revenue fell 1.8% yr/yr to RMB780.3 bln

• Profit attributable to equity shareholders dropped 7.9% yr/yr to RMB106.2 bln

• Company added 8.89 mln mobile and 13.05 mln broadband customers in nine months

Outlook

• China Mobile plans to accelerate integrated deployment of communications, computing and AI networks

• Company aims to reinforce strategic positioning in AI and expand in the computing market

• China Mobile will focus on improving quality and efficiency to enhance core competitiveness

Result Drivers

• PRINCIPAL BUSINESS DECLINE - Co said revenue from principal businesses fell 3.7% yr/yr, contributing to overall revenue and profit declines

• HIGHER PRODUCT COSTS – Cost of products sold rose RMB11.5 bln, driving total operating expenses higher despite declines in other expense lines

• NETWORK EXPANSION - Co said it continued to expand communications and broadband networks, adding 8.89 mln mobile and 13.05 mln broadband customers

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the integrated telecommunications services peer group is "buy"

• Wall Street's median 12-month price target for China Mobile Ltd is HK$95.50, about 18.6% above its October 20 closing price of HK$80.50

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)