[ET Net News Agency, 26 January 2018] HSBC Global Research lowered its target price for
China Mobile (00941) to HK$87 from HK$94, and maintained its "hold" rating.
The research house said China Mobile's broadband business has also been expanding
rapidly since 2016. It has become the second-largest broadband operator in China in terms
of number of subscribers.
However, HSBC expects China Mobile to assume national service when rolling out the 5G
network and build up national coverage. It could require huge amount of investment. HSBC
forecast total capex to exceed RMB625bn for 2018-20. But the research house expects only
incremental changes in shareholder return policy, with China Mobile expected to want to
retain full financial flexibility going into the 5G investment cycle.
It forecast a payout ratio of 48% for 2018, up 2ppt from 46% expected for 2017. (KL)