not vested
China Mobile (941 HK) - Strong growth in digital transformation business
China Mobile’s (CM; 941 HK) FY22 results met expectations.
Its operating revenue increased 10.5% YoY to CNY937.3b in FY22 while net profit grew 8.0% YoY to CNY125.5b.
A final dividend of HKD2.21 per share was declared, bringing full-year dividend per share (DPS) to HKD4.41 (+8.6% YoY), representing a dividend payout ratio of 67%.
Management reiterated the group’s target of a dividend payout ratio of 70% or above by 2023.
Customer market’s performance was stable while Home, Business and New markets registered double-digit growth in their revenue in FY22.
Digital transformation was the key growth driver of CM, contributing to 79.5% of incremental service revenue.
We expect to see further growth in this segment, supported by China’s digital economy development and rising digitalization demand.
We continue to like CM, given its payout visibility with attractive dividend yield of ~8%, strong balance sheet, and relatively defensiveness in the midst of market volatility.
After adjustments, we increase our fair value estimate from HKD72.20 to HK84.55. BUY.
Source: OCBC