China Mobile is a Chinese state-owned company. China Mobile Limited provides mobile voice and multimedia services through its nationwide mobile telecommunications network across mainland China and Hong Kong.
China Mobile Limited is listed on both the NYSE and the Hong Kong Stock Exchange. It is the largest mobile telecommunications corporation by market capitalisation, and also the world’s largest mobile network operator by the total number of subscribers, with over 942 million subscribers as of September 2019. As of 2020, China Mobile Limited’s total market value stood at RMB 1.31 trillion.
Why we like China Mobile:
Comments: Although 3.5MHz band product has more matured technology and better international collaboration, China Mobile already has a large number of TD-LTE equipment at 2.6GHz, which will make China Mobile lead in 5G construction with less additional investment and engineering time.
Meanwhile, with the holding of 4.8GHz bands (High-frequency bands), China Mobile will be further benefited from 5G technology development in the future and maintain its leading position.
Comments: 5G network construction starts from base station construction. The purchase of SPN equipment shows the demand for equipment upgrading and progress in 5G infrastructure construction.
According to MIIT, as of December 23, 2019, 5G base stations in China has reached 126,000; and by the end of 2020, 5G signal should cover most of the cities in China.
Summary: As a leading operator in China, we believe that China Mobile will surpass China Unicom and Telecom’s 5G combined network in coverage and attract more early adopters of 5G services. Accroding to China Mobile, more than 10 million have pre-registered for 5G. The 5G will also help increasing China Mobile’s ARPU, 5G services’ ARPU reach more than RMB 100 comparied to China Mobile’s Mobile services APRU RMB 50.2 for the first three quarters of 2019.
We are positive on China Mobile mainly due to its leading positions and progress in 5G construction. We belive China Mobile currently trades at P/E of 11.5 and P/B of 1.3.
China Mobile (HK: 941) downtrend have seen a light in a tunnel and recent technical indicate that the stock may head into a bullish rally soon:
*This call is valid only for 4-5 weeks.
Red dotted line = Upper Band
Blue dotted line = Middle Band
Green dotted line = Lower Band