20160112-法国巴黎银行-中国移动-00941.HK-Refocus_on_strong_fundamentals_11页_472kb

报告摘要

China Mobile (941 HK) Summary

Core Content

China Mobile Limited is a leading telecommunications company in China, maintaining its dominant position in the mobile broadband market. The report highlights its strong fundamentals, stable financials, and positive outlook for future performance. Despite recent challenges and policy changes, the company is expected to benefit from reduced government policy risks in 2016 and continued growth in earnings and free cash flow (FCF).

Main Points

Strong Market Position: China Mobile has achieved nationwide 4G coverage by the end of 2015 and is expected to retain its leadership in mobile broadband, with 4G subscribers projected to reach 500 million by end-2016.
Earnings and FCF Growth: The report forecasts earnings growth for 2016 at 10.4% and FCF yield rising to 8.5% in 2016 and 10.2% in 2017. This is attributed to declining capital expenditures and stronger revenue growth.
Balance Sheet Strength: China Mobile has a robust balance sheet with net cash accounting for over 30% of its market cap in 2015. It has a strong book value per share and improving financial metrics such as ROE and ROA.
Dividend Policy: The company's dividend yield is expected to increase from 3.5% in 2014 to 4.5% in 2017, reflecting a commitment to shareholder returns.
Valuation Metrics: The report shows a consistent trend in valuation metrics such as P/E, EV/EBITDA, and P/FCF, with the target price (TP) at HKD122.00, unchanged from previous recommendations.

Key Information

Financial Highlights (2014–2017E)

Metric	2014A	2015E	2016E	2017E
Revenue (RMB m)	641,448	703,070	744,883	792,337
Recurring Net Profit (RMB m)	109,279	115,247	127,261	141,933
Recurring EPS (RMB)	5.35	5.70	6.29	7.02
FCF Yield (%)	5.9	5.0	7.1	8.5
Net Debt/Equity (%)	(48.2)	(48.9)	(51.8)	(55.4)
ROE (%)	13.3	13.0	13.3	13.7

Valuation Metrics

Metric	2014A	2015E	2016E	2017E
Recurring P/E (x)	12.6	11.8	10.7	9.6
EV/EBITDA (x)	4.0	3.5	3.0	2.6
Price/Book (x)	1.6	1.5	1.4	1.3
P/FCF (x)	17.0	20.1	14.1	11.7

Earnings Sensitivity

Factor	2015E Change (%)	2016E Change (%)
Mobile ARPU	+5%	+5%
Mobile Subscribers	+5%	+5%

Risk Factors

Severe price competition may lead to weaker ARPU than expected.
High capex beyond 2016 could hinder FCF growth.
Regulatory pressure to cut prices may impact profitability.

Investment Thesis

China Mobile is expected to sustain its leadership in mobile broadband due to its extensive network coverage and strong financials. The company's strong balance sheet and improving FCF are seen as key drivers for future valuation growth. The report reiterates a BUY rating with an unchanged target price of HKD122.00.

Catalysts

Rising ARPU as a leading indicator of earnings growth.
Decline in capex in 2016, which should improve FCF generation.

Event Calendar

1/20/2016: Operating stats for Dec 2015
16-Mar: 2015 results
16-Aug: 1H16 results

Conclusion

The report reiterates a BUY recommendation for China Mobile, citing its strong fundamentals, leadership in mobile broadband, and improving FCF. It suggests that the company is well-positioned to benefit from reduced policy risks and continued growth in the sector. The target price remains at HKD122.00, reflecting confidence in its long-term performance.

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