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China Mobile rallies following 1H report

China Mobile's (CHL +3.4%) operating revenue rose 7.1% Y/Y in H14 to RMB324.7B ($54.1B). But net profit fell 8.5% to RMB57.7B ($$9.37B) thanks to 4G investments, iPhone subsidies, and declining SMS revenue (high-margin).

The world's biggest carrier ended July with 793.6M subs, up from 790.6M at the end of June and 767.2M at the end of 2013. 3G subs have grown to 240.9M from 191.6M at the end of 2013, and 4G subs have grown to 20.4M since the launch of services in February.

CHL's 4G network now covers 300+ cities. The company has an RMB225.2B 2014 capex budget, of which RMB74.9B is devoted to 4G. It hopes to have 50M 4G subs by year's end.

Voice services revenue fell 5.3% Y/Y in 1H14 to RMB165.8B, and SMS/MMS revenue 13.2% to RMB18.2B. But data services revenue rose 34% to RMB121.9B on the back of a 91.4% increase in mobile data traffic.

Chairman Xi Gouhua reiterates CHL will look for foreign acquisitions to boost growth."Our targets are not limited to those in emerging countries. We will also invest in companies that operate in developed markets if they offer good growth opportunities."

Credit Suisse has upgraded shares to Outperform.

Earnings slides (.pdf)

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Comments (2)
  • Humble Eagles
    , contributor
    Comments (2418) | Send Message
    Let's not forget the ~.99 cent interim dividend either! They have a very low PE, high divvy, a ton of cash, and almost 800MM subscribers and they are very cheap compared to most other places and stocks.
    14 Aug 2014, 03:31 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2418) | Send Message
    I also like that they are offering wideband data pipes in a lot of places where it is not available...very different from the US.
    14 Aug 2014, 03:33 PM Reply Like
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