Earnings First Take: 1Q22 net profit increased by 6.5% y-o-y, slightly below market expectations
- Net profit increased by 6.5% y-o-y to Rmb25.6bn in 1Q22, slightly lower than market expectations of c.8%
- Service revenue grew by 9.1% y-o-y to Rmb193.8bn
- EBITDA increased by 5.6% y-o-y to Rmb76.1bn in 1Q22, with EBITDA margin contracting 1.3ppts
- Expect negative share price reaction
What’s New
– China Mobile (941 HK) announced its 1Q22 results on 21 Apr 2022 after market close.
– Operating revenue increased by 14.6% y-o-y to Rmb227bn. Service revenue grew by 9.1% y-o-y to Rmb193.8bn, with DICT revenue grew by 50.9% y-o-y to RMB23.7 billion.
– Total mobile sub and 5G package sub net-add were 9.75m and 79.74m in 1Q22 respectively, with 5G penetration reaching 48.3%. Mobile ARPU increase by 0.3% y-o-y to Rmb47.5.
– EBITDA increased by 5.6% y-o-y to Rmb76.1bn in 1Q22, with EBIDTA margin contracting by 1.3ppts to 39.3%.
– Net profit increased by 6.5% y-o-y to Rmb25.6bn in 1Q22, lower than market expectations of c.8% due to higher than expected network operations and support expenses.
Our View:
– We expect negative share price reaction as the 1Q22 earnings growth rate is slightly lower than market expectations.
– We currently rate BUY on the counter with TP of HK$71.