China Mobile: 1 billion users on borad, setting sail for trillion-yuan revenue

China Mobile (600941.SH/00941.HK) released its second quarter financial report for 2024 after the Hong Kong stock market closed on the evening of August 8, 2024, Beijing time, with the following key points:

1. Overall Performance: Steady growth. China Mobile's total revenue for this quarter was 283 billion RMB, an increase of 1.1% year-on-year. The revenue growth this quarter was mainly driven by the growth of broadband business and application and information services. China Mobile's net profit for this quarter was 50.6 billion RMB, a 5.1% increase year-on-year. The growth in net profit was influenced by the increase in revenue and gross profit margin.

2. Business Segments: China Mobile's current revenue mainly comes from communication services and product sales, with communication services being the most significant business, accounting for over 80% of the revenue.

1) Wireless Internet Business: Driven by short videos and short dramas, the wireless internet business is currently the largest source of revenue for the company. The revenue for the first half of 2024 was 205.1 billion RMB, a 3.2% decrease year-on-year, accounting for 37.5%. Despite an increase in usage driven by demand, the revenue of the wireless internet business still declined due to the trend of price reduction.

2) Wired Broadband Business: The revenue for the first half of 2024 was 63 billion RMB, an 8.4% increase year-on-year, maintaining a share of 11.5%. The company's wired broadband business continued to grow, mainly benefiting from an increase in market share.

3) Voice and SMS Business: ① The revenue for voice business in the first half of 2024 was 36.3 billion RMB, a 4.3% decrease year-on-year. Influenced by social software such as videos, voice call revenue continued to decline; ② The revenue for SMS business in the first half of 2024 was 16.2 billion RMB, a 0.5% increase, remaining stable.

4) Application and Information Services: $CHINA MOBILE(00941.HK) The revenue for the first half of 2024 was 143.1 billion RMB, an 11.5% increase. This was the fastest-growing segment, including new personal services like mobile cloud storage, smart home revenue, and IoT revenue.

3. Capital Expenditure: China Mobile's capital expenditure for the first half of 2024 was 64 billion RMB. Combining with the full-year plan, it is expected that the capital expenditure for the second half of the year will exceed 100 billion RMB. The company's full-year capital expenditure plan for 2024 is 173 billion RMB, showing a slight decrease year-on-year, with the plan remaining unchanged.

Dolphin's View: China Mobile's Performance Remains Stable

Although both revenue and profit growth have declined, the company still maintains a steady growth trend. The number of customers continues to grow this quarter, surpassing the 1 billion mark. In addition, broadband and emerging businesses are also experiencing continuous growth.

Currently, the company is the largest domestic operator with the widest customer base. Whether it's short videos or AI, they all rely on traffic. Therefore, the market demand for traffic remains strong, which is also the company's main source of revenue. With the support of its leading position, if the company adjusts its pricing strategy downwards, there will be a significant improvement in performance. With the guarantee of continuous user growth and increasing market share, the company's performance is relatively controllable.

For investors focusing on the company, China Mobile still maintains three investment highlights: stable operations, a relatively high dividend yield, and declining capital expenditures. Although the company's growth rate is far behind that of emerging growth stocks, China Mobile is still favored by certain preference investors. This stable financial report does not affect the company's investment logic.

Below are Dolphin's data charts on $CHINA MOBILE(600941.SH):

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