HSBC Research lowers China Mobile's target price to 95 yuan, maintains "Buy" rating

HSBC Global Research published a report indicating that China Mobile (00941.HK) had slightly higher-than-expected revenue and EBITDA in the fourth quarter of last year, but net profit fell short of expectations due to a one-time value-added tax impact. Full-year service revenue grew 0.7% year-on-year, while communication service revenue declined by 1%, mainly due to a 3.5% drop in average revenue per user (ARPU), reflecting macro pressures and a high penetration rate of 5G. Computing service revenue increased by 11.1% year-on-year, benefiting from data center and cloud computing businesses growing by 9% and 14%, respectively. Artificial intelligence service revenue rose by 5.3% year-on-year to RMB 91 billion (same below). Last year's capital expenditure decreased by 8% year-on-year to RMB 150.9 billion, in line with guidance. Management expects capital expenditure to decline by 9.5% year-on-year in 2026, with computing-related capital expenditure increasing by 62% year-on-year.

The research team has lowered its profit forecast for China Mobile, reducing the target price for H shares from HKD 98 to HKD 95, and the target price for China Mobile A shares (600941.SH) from RMB 120 to RMB 112, maintaining a "Buy" rating for both H shares and A shares