China Mobile Reports Solid 2021 With Growth Likely To Continue Into 2022; FVE to HKD 91

We increase our fair value estimate for China Mobile to HKD 91 per share from HKD 89 per share previously, following a strong 2021 result that was broadly in line with our expectations and the results reported by its two domestic competitors, China Unicom and China Telecom. 2021 services revenue grew 8%, EBITDA grew 9.1% and net profit grew 7.7%. Fourth-quarter services revenue grew 5%, EBITDA grew 7.8% and net profit grew 8.9% from the previous year. Like the other telcos, China Mobile is seeing very strong growth from cloud revenue (110% year on year) and data center revenue (33%), but has also seen a return to growth from its core mobile services revenue of 1.3%,which contributes 59% of its total service revenue. Industry mobile revenues have benefited from mobile data price declines that have moderated from 50%-60% declines in 2017 and 2018 to 20%-25% declines over the past two years, as the government has removed its previous network speed upgrade and tariff reduction requirements.