[Peek at Performance] China Mobile: Mixed Mid-term Results, Why Are Institutions Still Bullish?
On August 7, $CHINA MOBILE(00941.HK) released its performance for the first half of 2025. Overall, the results were "mixed," with a slight decline in total revenue but steady growth in profits.
The financial report shows that in the first half of this year, $China Mobile(600941.SH) reported revenue of 543.8 billion yuan (in RMB, same below), a slight year-on-year decrease of 0.5%, which was unsatisfactory. Among them, the main business revenue was 467 billion yuan, a year-on-year increase of 0.7%.
By business segment, China Mobile's traditional businesses continued to face pressure. Among them, voice service revenue was 34.2 billion yuan, a year-on-year decrease of 5.7%; SMS and MMS revenue was 16.1 billion yuan, a year-on-year decrease of 0.7%; and mobile internet revenue was 195.5 billion yuan, a year-on-year decrease of 4.7%.
However, the performance of wired broadband services and application and information services was strong, with revenues of 68.6 billion yuan and 136.7 billion yuan, respectively, representing year-on-year growth of 8.9% and 5.9%.
Facing the challenges of declining traditional businesses, China Mobile accelerated its digital transformation. In the first half of the year, digital transformation revenue reached 156.9 billion yuan, a year-on-year increase of 6.6%, accounting for 33.6% of main business revenue, an increase of 1.9 percentage points year-on-year.
From a segmented market perspective, China Mobile's personal business revenue in the first half of the year was slightly weaker than the same period last year, but key performance indicators remained industry-leading. Additionally, the company maintained steady performance in the home and enterprise markets, while emerging markets showed promising growth, with international and financial businesses achieving double-digit growth.
China Mobile's financial report shows that in the first half of 2025, personal market revenue was 244.7 billion yuan, a year-on-year decline of 4.11%. Mobile customers reached 1.005 billion, with a net increase of 560,000, including 599 million 5G network customers, a net increase of 46.91 million, with a penetration rate of 59.6%. Mobile ARPU remained industry-leading at 49.5 yuan.
In the home market, first-half revenue was 75 billion yuan, a year-on-year increase of 7.4%. Home broadband customers reached 284 million, with a net increase of 6.23 million, including 109 million gigabit home broadband customers, a year-on-year increase of 19.4%, and FTTR customers reached 18.4 million, a year-on-year increase of 264%. The comprehensive ARPU for home customers reached 44.4 yuan, a year-on-year increase of 2.3%.
In the enterprise market, first-half revenue was 118.2 billion yuan, a year-on-year increase of 5.6%. Among them, mobile cloud revenue was 56.1 billion yuan, a year-on-year increase of 11.3%, while 5G private network revenue reached 6.1 billion yuan, a significant year-on-year increase of 57.8%.
In emerging markets, first-half revenue was 29.1 billion yuan, a year-on-year increase of 9.3%; international business revenue reached 14 billion yuan, a year-on-year increase of 18.4%.
In fintech, the scale of industrial chain financial business in the first half of the year reached 47.1 billion yuan, a year-on-year increase of 24.5%. Investment returns in key areas of emerging and future industries were 7.2 billion yuan, a year-on-year increase of 17.0%.
On the profit side, in the first half of the year, China Mobile achieved a net profit attributable to shareholders of 84.2 billion yuan, a year-on-year increase of 5.0%; EBITDA reached 186 billion yuan, a year-on-year increase of 2.0%.
Regarding this report card, China Mobile Chairman Yang Jie admitted: "While the company achieved results in the first half of the year, we also clearly see the pressures and challenges in development."
Yang Jie analyzed six factors:
First, traditional communication demand is gradually saturating, and the demographic dividend is fading;
Second, new information services such as artificial intelligence are still in the cultivation stage; third, market competition is intensifying;
Fourth, affected by the macroeconomic situation, effective demand is insufficient;
Fifth, the company is actively optimizing its business structure, abandoning inefficient and ineffective businesses;
Sixth, maintaining rapid growth on a high base is significantly more difficult.
However, it is worth mentioning that to better reward shareholders, China Mobile has continued to increase cash dividends, highlighting the value of dividends.
The announcement shows that China Mobile decided to distribute an interim dividend of HK$2.75 per share (tax inclusive) for 2025, a year-on-year increase of 5.8%. The total interim dividend payout was approximately HK$59.4 billion.
After the results, major brokerage firms expressed their views, generally maintaining an optimistic outlook on China Mobile.
CLSA's research report stated that China Mobile's first-half performance was weak, with telecom service revenue growth below expectations, mainly due to slower growth in digital information and communication technology businesses and a decline in mobile service revenue. Although AI revenue grew rapidly, its contribution remains small. Supported by strict cost control, net profit remained stable. The group declared an interim dividend of HK$2.75, up 6% year-on-year, with a payout ratio of 64%. Despite weak revenue performance, the bank believes the full-year payout ratio may rise to 74%, equivalent to a dividend yield of about 6.4%, maintaining an "outperform" rating.
Citi's report also pointed out that China Mobile's first-half performance was generally weak, as net profit growth mainly came from cost control and lower depreciation expenses. However, the bank stated that it remains optimistic about the high dividend yield of over 6%, considering it defensive.
Possibly boosted by this, on August 8, China Mobile's A-shares and H-shares both rose. At the time of writing, its H-shares rose 1.05% to HK$86.85 per share; A-shares rose 1.98% to 109.98 yuan per share.
Author: Bottle
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