China Mobile Reports Strong First-Half Result; Focus Shifting to DICT

China Mobile reported a strong first-half 2022 result with services revenue up 8.4%, EBITDA up 7.4%, and net profit up 18.9% on a reported basis and up 7.3% on an underlying basis. Second-quarter services revenue slowed slightly to 7.9%, but EBITDA growth accelerated to 8.8%. Like the other telcos, China Mobile is experiencing very strong growth from data, information, and communications technology, or DICT, which grew 44.2% year on year to CNY 48.2 billion (now representing 11.3% of China Mobile’s total services revenue). While cash flow remained strong, it did decline in the first half with operating cash flow down 9% to CNY 147 billion and free cash flow down 25% to CNY 73 billion. A HKD 2.20 interim dividend was declared, up 41% on last year, driven by the strong earnings growth on a reported basis and the dividend payout ratio increasing to 63% from 51% in the same period last year. Management also clarified that it was planning to increase its dividend payout ratio to 70% by 2023, not 2024 as was widely believed in the market.