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China Mobile Limited (CHL)

  • Dec. 1, 2014, 10:38 AM
    • Chinese Internet  and telecom names are among the biggest tech decliners as the Nasdaq registers a 0.9% drop. A soft November PMI print isn't helping.
    • Giants Alibaba (BABA -4.3%) and Baidu (BIDU -2.8%) are among the casualties. As is Qunar (QUNR -5.8%), which reports after the bell.
    • Other Internet decliners: BITA -12%. QIHU -4.4%. CTRP -4.3%SFUN -7.2%. LEJU -7.5%. RENN -6.3%. SINA -3.8%. WB -3%. YY -3.9%. VIPS -3.8%. SOHU -3.5%. MOBI -4.3%. CMGE -8.6%.
    • Telecom decliners: CHL -3.6%. CHU -3.9%. CHA -4%.
  • Oct. 10, 2014, 6:24 AM
    • Deutsche Telekom (OTCPK:DTEGF, OTCQX:DTEGY) and China Mobile (NYSE:CHL) ink a JV offering telecom services in China's connected-cars business.
    • The pair will jointly develop 4G-based vehicle-information services for drivers in the Chinese connected-car market. The JV will start operating at the beginning of 2015.
    • The Chinese automobile market is the biggest in the world, and requirements for car safety and information and entertainment services in cars are expected to rise in the future.
    • DT traders shrug off the news, with shares recently -2.2% in Frankfurt.
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  • Sep. 16, 2014, 8:41 AM
    • According to a report in the state-owned 21st Century Business Herald, Apple (NASDAQ:AAPL) may not get Beijing's approval for iPhone 6 sales until next year.
    • Meanwhile, China Mobile (NYSE:CHL) Chairman Xi Guohua tells reporters he doesn't know when the new iPhones will be available, and his company will focus on selling cheaper phones which don't require subsidies. "The direction of our development is to completely focus on the mass market,” says Xi. “We have 4G devices selling for ¥1K. I believe, subsidy or no subsidy, discount or no discount, the common person will be able to appreciate this.”
    • China Mobile fell the most in two years in Hong Kong acton overnight, down 3.9%. Apple is lower by 1.1% premarket.
  • Sep. 15, 2014, 2:39 PM
    • America Movil (AMX +2.4%) has contacted potential suitors including AT&T (T +0.6%) and SoftBank (OTCPK:SFTBY, OTCPK:SFTBF), and perhaps BCE’s Bell Canada (BCE -0.1%) and China Mobile (CHL +1%), as it prepares to sell assets along the east coast of Mexico that could fetch as much as $17.5B, Bloomberg reports.
    • AMX is selling assets in its biggest market to appease antitrust regulators; the Mexico-based carrier, which commands 70% of the local wireless market and 80% of landlines, may get penalties revoked if it cuts market share below 50%.
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  • Aug. 15, 2014, 11:25 AM
    • Mizuho has upgraded China Mobile (CHL +2.3%) to Neutral following its 1H report, in which the carrier reported a 34% increase in data revenue to go with 5% and 13% respective declines in voice and SMS/MMS revenue.
    • The Street has been quite pleased with CHL's plans (following government pressure) to cut its 2014 phone subsidy budget to RMB21B ($3.4B) from a prior RMB34B ($5.5B). With the company having spent RMB15.3B on phone subsidies in 1H14, that suggests 2H subsidy spend will only be RMB5.7B ($930M).
    • Deutsche and Morgan Stanley hiked their targets yesterday. The latter noted management expects earnings (down 8.5% Y/Y in 1H) to bottom in 2014, sooner than the firm expected.
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  • Aug. 14, 2014, 1:18 PM
    • 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)
  • Jul. 14, 2014, 10:03 AM
    • Aruba (ARUN +1.2%) has been upgraded to Outperform by Macquarie. Shares rallied on Friday after the FCC cleared a $2B school Wi-Fi initiative.
    • China Mobile (CHL +2.7%) has been upgraded to Buy by BofA/Merrill.
    • Informatica (INFA +1.2%) has been upgraded to Overweight by Evercore ahead of its July 24 Q2 report.
    • TripAdvisor (TRIP -1.5%) has been cut to Neutral by Nomura ahead of its July 23 Q2 report.
    • Teradata (TDC +1.5%) has been started at Buy by Standpoint Research. Q2 results are due on Aug. 7.
    • Jumei (JMEI +2.7%) has been started at Buy by BofA/Merrill.
    • MTS Systems (MTSC +1.4%) has been started at Buy by Needham.
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  • Jul. 8, 2014, 12:16 PM
    • The Chinese government has told China Mobile (CHL -0.4%), China Unicom (CHU +1.3%), and China Telecom (CHA -0.3%) to slash phone subsidies and advertising by a combined RMB40B ($6.4B) in 3 years, Bloomberg reports.
    • The government came to its decision after concluding carriers are spending too much to promote the iPhone (AAPL -1.8%) and other high-end hardware. While a large chunk of Chinese phone sales are unsubsidized, subsidies have been growing as carriers try to sign up higher-income subs to 3G/4G postpaid plans.
    • A possible motivation: Apple and Samsung control much of the high-end Chinese phone market, while local firms (both OEM and white-label) control much of the mid-range and low-end.
    • China Mobile, which began selling the iPhone in January, has forecast its subsidy spend will rise 29% in 2014 to RMB29B ($4.7B). China Telecom says it has already been "implementing stringent control on [its] selling expenses to ensure operating profitability.”
    • UBS, generally upbeat about Apple this year, thinks subsidy cuts and Samsung price cuts could slow Apple's Chinese momentum. The company's Greater China sales rose 13% Y/Y in FQ2 to $9.3B.
    • The Bloomberg report comes as Samsung says it expects to report soft Q2 smartphone/tablet sales. Among other things, the company blames tough low-end/mid-range phone competition, and weak tablet market demand caused by phablet cannibalization and low upgrade rates. CIRP has observed iPad upgrade cycles are notably longer than iPhone upgrade cycles.
  • Jun. 24, 2014, 4:34 PM
    • Light May 3G subscriber adds for Chinese carriers suggests Himax's (HIMX -3.9%) Q2 guidance is at risk, writes Chardan's Jay Srivasta, cutting his PT by $1 to $5.
    • Srivasta, who downgraded Himax to Sell in May, notes 57% of Himax's Q1 revenue was tied to small-panel LCD drivers (mostly for 3G smartphones), and that 52% of 2013 revenue came from China.
    • Worth noting: The 3G weakness is partly due to rising 4G subscriber adds. Top carrier China Mobile (CHL -0.1%) saw its 3G net adds drop to 4.3M in May from 7M in April, but also saw its 4G net adds rise to 3.3M from 2M.
    • Srivasta also reiterates his doubts about Google Glass' near-term value to Himax (previous). Shares have already been hit hard by reports Google is thinking of using a Samsung OLED microdisplay in a next-gen Glass model.
  • Jun. 9, 2014, 12:08 PM
    • China Mobile (CHL +0.3%) is spending $880M to buy an 18% stake in Thai carrier True. The company is getting a 13% discount to True's Bangkok trading price prior to the announcement.
    • CHL, the world's biggest carrier in terms of sub count, has been cautious with its overseas expansion efforts to date: Prior to the True deal, its biggest foreign investment was the acquisition of Pakistani carrier Zong (formerly known as Paktel).
    • But with the company sitting on $70B in cash and contending with both slowing growth and intensifying competition in China, a pickup in foreign investment activity could be in the cards. Chairman Xi Guohua mentioned last year CHL is on the lookout for foreign acquisitions.
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  • May 23, 2014, 4:04 PM
    • The recent rally in shares of Chinese carriers isn't justified given their earnings are likely to decline over the next 2-3 years, says HSBC's Tucker Grinnan, cutting shares of all three to Underweight. China Mobile (CHL -1%), China Telecom (CHA -1.5%), and China Unicom (CHU -1.3%) have slipped in response.
    • Grinnan's downgrade comes shortly after CHL, just given more freedom (along with peers) to set its own prices, announced plans to cut 4G data prices by up to 50%, and to also slash 2G/3G data prices.
    • Goldman upgraded CHL and downgraded CHA on Monday. China's carriers are expected to benefit from tower-sharing deals that will lower capex, but also have a list of challenges that includes SMS traffic declines, rising phone subsidies, and the pending arrival of MVNO competition.
    | 1 Comment
  • May 19, 2014, 12:53 PM
    • Goldman's Donald Lu has upgraded China Mobile (CHL +1.9%) to Conviction Buy, and simultaneously downgraded rival China Telecom (CHA -2.7%) to Neutral.
    • Lu thinks 3G/4G adoption will boost CHL's data ARPU, and help reverse the decline in its total ARPU in 2015. He adds the arrival of cheaper 4G smartphones (eventually reaching $100 unsubsidized price points) and potentially strong iPhone 6 demand will act as catalysts.
    • As for China Telecom, Lu believes a decent amount of good news, including steady earnings growth (wireline-driven) and a tower-sharing deal (will lower capex) has been priced in. He's also worried about possible share loss to CHL as the latter's 4G subscriber base grows.
    • Previous: Chinese carriers allowed to set their own prices
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  • May 9, 2014, 5:21 PM
    • Starting tomorrow, China's state-run carriers - China Mobile (CHL), China Unicom (CHU), and China Telecom (CHA) - will be able to set their own service prices without having to first clear them with the government (as has been the case thus far). The policy change covers voice, text, and broadband services.
    • Nonetheless, the carriers will still be prohibited from offering "excessive" discounts. The regulatory change is part of a broader effort by the Chinese government to let market forces determine prices.
    • It follows two moves from regulators that could pressure the carriers' bottom lines: The imposition of a telecom VAT, and the issuing of MVNO licenses to Alibaba and ten other firms.
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  • Apr. 22, 2014, 1:01 PM
    • China Mobile (CHL -0.5%) had Q1 revenue of RMB154.8B ($24.8B), +8% Y/Y and above a Bloomberg consensus of RMB142B. But 4G network investments and iPhone subsidies led net income to come in at RMB25.2B ($4B), -9% Y/Y and below a consensus of RMB27B.
    • The world's biggest carrier saw its customer base grow by 13.9M in Q1 to 781.1M. 3G subs grew by 33.4M to 225M, and 4G subs totaled 2.79M at quarter's end (services were launched in December).
    • Mobile messaging competition (most notably from Tencent's WeChat) led SMS activity to fall 20% Y/Y to 192.7B messages. Voice usage rose fractionally to 1.04T minutes, and mobile data traffic (not including Wi-Fi) grew 83% to 190.1B MB.
    • Going forward, a telecom VAT and competition from MVNOs might also pressure CHL's bottom line.
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  • Mar. 27, 2014, 7:13 AM
    • Alcatel-Lucent (ALU) has forged a one-year comprehensive frame agreement worth up to €750M to provide China Mobile (CHL) with technology that will enable the latter to move to an all-IP ultra-broadband network.
    • The deal includes 4G TD-LTE technology, and will pave the way for "future network functions virtualization (NFV) and cloud-based services."
    • Alcatel-Lucent's shares are +6.2% premarket.
  • Mar. 21, 2014, 9:54 AM
    • A day after selling off due to a soft Q4 report, China Mobile (CHL -2.5%) is being pressured by a downgrade to Neutral from HSBC.
    • The world's biggest mobile carrier had already been selling off in 2014 due to worries about a telecom VAT, MVNO competition, and the impact of Web-based messaging services.
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Company Description
China Mobile Ltd provides cellular telecommunications and related services in the People's Republic of China and Hong Kong SAR. It offers voice services, voice value-added services & telecommunications network planning.
Sector: Technology
Country: China