Investment Rating - Maintains a "Buy" rating with a target price of HKD 78.00, corresponding to 10.4x/9.9x/9.6x P/E for 2024-2026 and dividend yields of 7.0%/7.5%/8.0% [1] Core Views - China Mobile's Q1 2024 performance exceeded expectations, driven by cost control and efficiency improvements, which are expected to enhance profitability and support higher-than-expected dividend payouts [1] - The company's high-growth and high-dividend characteristics are expected to persist, supported by sustained industry growth [1] - Despite slightly lower-than-expected Q1 2024 profit growth, full-year profit and dividend growth remain optimistic, with service revenue and net profit reaching RMB 219.3 billion (+4.5% YoY) and RMB 29.6 billion (+5.5% YoY), respectively [2] - Mobile and home broadband users increased by 4.63 million and 6.83 million, respectively, with stable ARPU expected to continue in 2024 [2] - The company plans to increase its dividend payout ratio to over 75% starting from 2024, with dividend growth expected to outpace profit growth [2] Cost Efficiency and Capital Expenditure - 5G network construction has reached a moderate scale, with future capital expenditure expected to slow down as 5G demand becomes more fragmented [3] - China Mobile's 5G network capital expenditure is projected to decrease by 21.6% YoY in 2024, with total capital expenditure down 4% YoY, leading to healthier cash flow and reduced depreciation pressure [3] - The company adjusted the depreciation period for 5G wireless and related transmission equipment from 7 to 10 years, reducing annual depreciation by approximately RMB 18 billion [3] Dividend and Shareholder Returns - Based on the closing price as of April 22, 2024, China Mobile's estimated dividend yields for 2024/2025/2026 are 7.8%, 8.3%, and 8.9%, respectively, supported by stable profit growth [3] - The company's high and stable dividend growth is expected to provide a strong margin of safety for its stock price [3] Industry Comparison - China Mobile's valuation metrics (P/E and dividend yield) are competitive compared to peers in Hong Kong, the US, Japan, South Korea, and Europe, with a 2024F P/E of 9.8x and a dividend yield of 7.4% [7][10] - The company's capital expenditure is shifting towards computing power, with a focus on reducing costs and improving efficiency [7]

Financial Performance - For the three months ended March 31, 2024, the operating revenue was RMB 263.7 billion, representing a year-on-year increase of 5.2%[3] - The communication service revenue for the same period was RMB 219.3 billion, reflecting a year-on-year growth of 4.5%[7] - The EBITDA for the first quarter of 2024 was RMB 78 billion, a decrease of 2.3% compared to the previous year[9] - The profit attributable to shareholders was RMB 29.6 billion, which is a 5.5% increase year-on-year[7] - In Q1 2024, the group's communication service revenue was RMB 219.3 billion, representing a year-on-year growth of 4.5%, while sales of products and other revenues amounted to RMB 44.4 billion, up 8.6% year-on-year[12] - The profit attributable to shareholders for Q1 2024 was RMB 29.6 billion, an increase of 5.5% year-on-year, with a profit margin of 11.2%[14] - EBITDA for the same period was RMB 78 billion, down 2.3% year-on-year, with an EBITDA margin of 35.6% of communication service revenue[14] - The total comprehensive income for the period was RMB 30.5 billion, compared to RMB 27.4 billion in the previous year[15] Customer Metrics - The total mobile customer base reached 996 million, with 5G package customers numbering 799 million[11] - The average revenue per user (ARPU) for mobile services was RMB 47.9, up from RMB 44.9 in the previous year[9] - The total number of fixed broadband customers was 305 million, with a net increase of 6.83 million during the quarter[9] - The average revenue per user (ARPU) for household customers in Q1 was RMB 39.9, reflecting a year-on-year growth of 1.8%[12] - The average monthly mobile internet traffic per user (DOU) was 14.9 GB, showing a year-on-year increase of 3.3%[11] - As of March 31, 2024, the total number of broadband customers reached 305 million, with a quarterly net increase of 6.83 million, including 269 million household broadband customers, which saw a net increase of 5.28 million[12] Cash Flow and Investments - Cash and cash equivalents amounted to RMB 166 billion, up from RMB 141.6 billion in the previous quarter[22] - Operating cash inflow for Q1 2024 was RMB 65.9 billion, compared to RMB 82.7 billion in the same period last year[22] - For the three months ended March 31, 2024, the net cash outflow from investment activities was RMB 20,491 million, a decrease of 39% compared to RMB 33,721 million in the same period of 2023[24] - The net cash outflow from financing activities was RMB 12,064 million, a decrease of 18% compared to RMB 14,719 million in the same period of 2023[26] - The net increase in cash and cash equivalents for the period was RMB 24,349 million, compared to RMB 26,765 million in the same period of 2023[26] - The total cash and cash equivalents at the end of the period was RMB 166,026 million, down from RMB 193,648 million at the end of the same period in 2023[26] - The company received RMB 3,720 million in interest and other income, significantly up from RMB 1,600 million in the same period of 2023[24] - The company disposed of financial assets measured at amortized cost, generating RMB 31,225 million, compared to RMB 10,146 million in the same period of 2023[24] - The company reported a decrease in the purchase of fixed assets and other non-current assets to RMB 34,478 million from RMB 37,246 million in the same period of 2023[24] - The company’s statutory deposit reserve decreased by RMB 2,214 million, compared to RMB 275 million in the same period of 2023[24] Assets and Liabilities - The total assets as of March 31, 2024, were RMB 2,030.9 billion, an increase from RMB 1,992.7 billion as of December 31, 2023[17] - The total liabilities increased to RMB 653.8 billion from RMB 646.7 billion in the previous quarter[20] Strategic Initiatives - The company aims to enhance core competitiveness and accelerate the development of strategic emerging industries[1] - The company is committed to digital transformation and high-quality development as part of its strategic implementation[11] Cautionary Statements - The company cautioned investors regarding reliance on the unaudited financial data presented, highlighting potential risks and uncertainties[28]

Financial Performance - The company achieved a basic earnings per share of HKD 2.4002 for the fiscal year 2023, with a total dividend of HKD 4.830, reflecting an increase from HKD 4.410 in 2022[19]. - The total revenue for 2023 was RMB 1,009.309 billion, reflecting a significant increase from RMB 812.058 billion in 2022[189]. - The company plans to distribute over 70% of its profits to shareholders in cash for the year 2023[70]. - The board of directors proposed a full-year dividend payout ratio of 71%, with a final dividend of HKD 2.40 per share, resulting in a total annual dividend of HKD 4.83 per share, an increase of 9.5% compared to 2022[107]. Sustainability and Environmental Initiatives - The company has built 86,000 ultra-simple 5G base stations, with energy efficiency per new large data center dropping to below 1.32 PUE, and a 9% year-on-year improvement in energy efficiency for new single stations[3]. - The clean energy supply capacity has reached 21 million peak watts, enhancing the company's commitment to green development[3]. - The company has reduced paper usage by 130 million sheets through a 99.9% paperless procurement rate, resulting in a carbon emission reduction of 260 tons[3]. - The company has enabled a reduction of approximately 310 million tons of greenhouse gas emissions through its green technology initiatives[3]. - The company plans to continue its sustainable development initiatives, including the establishment of a sustainability committee under the board of directors starting January 1, 2024[8]. - A sustainable development committee was established on January 1, 2024, to oversee corporate social responsibility and sustainability goals[66]. Corporate Governance - The company maintains a strong focus on corporate governance, ensuring transparency and effective communication with shareholders and stakeholders[7]. - The board discussed the company's corporate governance report in 2023, focusing on compliance with legal regulations[29]. - The company has implemented a director nomination policy to ensure suitable candidates are appointed to the board[25]. - The company has committed to continuously improving its corporate governance practices to meet shareholder expectations and ensure long-term sustainable development[127]. - The company received confirmation of independence from independent non-executive directors, affirming their compliance with independence requirements[41]. - The board consists of independent non-executive directors who review the board's structure and composition annually[66]. Audit and Internal Controls - The audit committee held 6 meetings in 2023, with a notable attendance rate, and met with external auditors 3 times, including 1 meeting without executive directors present[34]. - The audit committee approved the audited financial statements for the year ending December 31, 2022, and the profit distribution plan for 2022, along with the interim dividend for 2023[35]. - The internal audit department conducts independent audits across all business units and reports directly to the audit committee four times a year[140]. - The internal audit plan includes financial audits, internal control audits, and risk assessments, ensuring compliance with relevant regulations[141]. - The company has maintained effective internal controls over financial reporting, with no significant deficiencies identified as of December 31, 2023[123]. - The company has established a comprehensive internal audit framework to address risks and improve audit oversight, focusing on key business transformation areas[143]. Talent Development and Workforce - The company emphasizes the importance of talent development as a core competitive advantage, implementing various employee welfare programs[2]. - The company has a total employee count of 451,830, with female employees making up 52.3% of the workforce[97]. - The company aims to strengthen its talent pool with over 5,000 provincial-level experts and more than 10,000 outstanding engineers in key technology areas[151]. - The company has implemented a comprehensive incentive system to drive performance growth, focusing on "two breakthroughs and four enhancements" development goals[152]. - The workforce has been optimized with over 28,000 digital employees developed to enhance productivity in key business areas[153]. Innovation and Technology - The company successfully developed the first domestic reconfigurable 5G RF transceiver chip "Breaking Wind 8676" in August 2023[198]. - The company launched the "BASIC6" scientific innovation plan to stimulate innovation momentum in October 2023[198]. - The company aims to build a smart auditing ecosystem and enhance audit quality through AI and innovative practices in 2024[143]. Shareholder Engagement and Transactions - The company reported a year-on-year increase in interim profit distribution approval rate of 99.9906% at the annual general meeting held on May 24, 2023[21]. - The general authorization for the board to issue and handle Hong Kong shares was expanded based on the number of repurchased shares, with an approval rate of 96.9777%[22]. - The company received 99.9959% approval for a related party transaction agreement with China Tower Corporation[67]. - The company has not entered into any significant transactions or arrangements with its directors or related entities during the year[131]. Financial Management and Fund Utilization - The total amount raised from the issuance of RMB shares is RMB 51,981,373,781.86, with a net amount of RMB 51,373,879,467.74 after deducting issuance costs[80]. - As of December 31, 2022, the company has invested approximately RMB 42.917 billion of the raised funds, with RMB 8.457 billion remaining uninvested[80]. - For the fiscal year ending December 31, 2023, the company has invested approximately RMB 6.654 billion of the raised funds[80]. - The company aims to utilize the raised funds for projects related to 5G network construction, cloud infrastructure, and new generation information technology research and development[80]. - The company has not experienced significant changes or delays in the planned use of the raised funds as disclosed in previous announcements[99].

Investment Rating - The report maintains a "Buy" rating for China Mobile (00941 HK) with a target price of HK$78.00 [23][21][15]. Core Insights - The company is expected to achieve stable growth in revenue and net profit, with service revenue reaching RMB 863.5 billion (up 6.3% YoY) and net profit reaching RMB 131.8 billion (up 5.0% YoY) in 2023 [3][11]. - The company plans to increase its dividend payout ratio to 71.5% for 2023 and aims to raise it to over 75% in the next three years [11][15]. - The report anticipates that the company's cost control measures and efficiency improvements will enhance profitability, allowing for dividends to exceed market expectations [21][15]. Financial Summary - For the fiscal years 2024 to 2026, the expected earnings per share (EPS) are RMB 6.912, RMB 7.245, and RMB 7.533 respectively [15][21]. - The projected dividend yields for 2024, 2025, and 2026 are 7.0%, 7.5%, and 8.0% respectively [21][15]. - The company’s capital expenditure is expected to decline, particularly in 5G infrastructure, which will help alleviate operational cost pressures [22][15]. Market Position and Strategy - The competitive environment for traditional telecom operators is expected to remain moderate, benefiting profitability [26]. - The company has been actively repurchasing shares, reflecting management confidence and adherence to state-owned enterprise value management requirements [15][11]. - The report highlights the strong demand for industrial digitalization and the easing of depreciation pressures from traditional business investments as key factors supporting growth [3][11].

Investment Rating - The report assigns a "Buy" rating for China Mobile [3] Core Views - China Mobile's revenue has surpassed 1 trillion yuan, achieving a record high in profit, with a revenue of 1,009.3 billion yuan in 2023, representing a year-on-year increase of 7.7% [3] - The company aims to increase its dividend payout ratio to over 75% within the next three years, with a projected dividend payout ratio of 71% for 2023 [3] - The report highlights the continuous optimization of revenue structure and strong growth in various segments, including personal market revenue and enterprise market revenue [3] Financial Summary - Revenue for 2022 was 937,259 million yuan, with a projected increase to 1,068,640 million yuan in 2024, reflecting a growth rate of 5.9% [7] - Net profit for 2022 was 125,459 million yuan, expected to rise to 141,007 million yuan in 2024, with a growth rate of 7.0% [7] - The report forecasts an increase in earnings per share (EPS) from 6.35 yuan in 2022 to 7.14 yuan in 2024 [7] - The company’s EBITDA for 2023 is projected at 341.5 billion yuan, with an EBITDA margin of 39.5% [3][11] Capital Expenditure and Cash Flow - Capital expenditure for 2023 is reported at 180.3 billion yuan, with a year-on-year decrease of 1.9% [3] - Free cash flow is expected to improve, with a focus on returning value to shareholders through increased dividends [3] Market Position and Growth - China Mobile has a strong market presence with 990 million mobile users, including 180 million 5G subscribers [3] - The company is expanding its cloud services and digital content offerings, with significant growth in enterprise market revenue [3][11] Valuation - The report sets a target price of 80 Hong Kong dollars for China Mobile, maintaining a buy rating based on the company's strong governance and growth potential [3]

Financial Performance - The company's basic earnings per share for the year ended December 31, 2023, were based on a profit attributable to shareholders of RMB 131,766 million, compared to RMB 125,459 million in 2022, with a weighted average number of shares of 21,376,288,436[5]. - The operating revenue reached RMB 1,009.3 billion, an increase of 7.7% year-on-year, with communication service revenue at RMB 863.5 billion, growing by 6.3%[54]. - Shareholders' profit attributable to the company was RMB 131.8 billion, up 5.0% year-on-year, with earnings per share at RMB 6.16[51]. - EBITDA was RMB 341.5 billion, reflecting a year-on-year growth of 3.7%, accounting for 39.5% of communication service revenue[51]. - Free cash flow increased by 29.2% year-on-year to RMB 123.5 billion, indicating strong operational efficiency[51]. - The total comprehensive income for the year was RMB 133,447 million, up from RMB 126,853 million in 2022, indicating a growth of 5.5%[114]. - The company's profit for the year reached RMB 131.935 billion, an increase from RMB 125.594 billion[95]. - The net profit attributable to shareholders for 2023 was RMB 131,935 million, representing an increase of 5.7% from RMB 125,594 million in 2022[113]. Customer Growth and Market Penetration - The cloud mobile service officially launched, achieving a customer base of 11.99 million by the end of December 2023, reflecting positive market feedback[1]. - In the public market sector, 17 products reached a customer scale of over 100 million, with 4 products exceeding 200 million customers[1]. - Six products in the government and enterprise market generated revenue exceeding RMB 100 billion, showcasing industry-leading service capabilities[1]. - The "Mobile Home" and "Thousand-Mile Eye" services reached a total customer scale of 56.26 million, indicating strong market penetration[1]. - The number of mobile customers reached 991 million, with 5G package subscribers totaling 795 million, reflecting a net increase of 18 million[60]. - The number of broadband customers reached 298 million, with household broadband customers at 264 million, and household ARPU at RMB 43.1[54]. - The number of enterprise customers grew to 28.37 million, with a net increase of 5.17 million[63]. - The number of 5G network customers reached 465 million, supporting a total of 33,000 commercial use cases[66]. Innovation and Technology Development - The company is committed to strengthening its innovation leadership and sustainable development capabilities through optimized management and expanded collaborative ecosystems[2]. - The company has established a "1+N" specialized large model system, releasing over 450 AI capabilities including intelligent voice recognition and natural language processing[28]. - The company led 60 international standards for 5G-A, ranking first among global operators, and successfully developed the first domestic reconfigurable 5G RF chip "Pofeng 8676"[28]. - The company launched 19 innovative achievements in 5G-A, with the RedCap technology already commercialized in 52 cities across the country[28]. - The company is focusing on the development of new products and technologies, including intelligent lightweight terminals and low-altitude coverage new business models[34]. - The company aims to enhance its core competitiveness and achieve sustainable high-quality development, targeting a revenue breakthrough of over RMB 1 trillion[68]. - The company is focusing on digitalization and network intelligence to enhance service quality and meet customer demands effectively[59]. Sustainability and Corporate Responsibility - The company is committed to sustainable development, emphasizing its responsibility as a corporate citizen to drive economic, social, and environmental progress[39]. - The company has launched the "C² Three Energy - Carbon Peak and Carbon Neutral Action Plan," focusing on energy conservation and low-carbon initiatives[40]. - In 2023, the total energy consumption per unit of telecom business decreased by 13.0%, while carbon emissions per unit dropped by 13.1%[40]. - The company was recognized as one of the top ten "China ESG Model" enterprises and received multiple awards for its performance in ESG and investor relations[32]. Strategic Initiatives and Partnerships - The company has established partnerships with over 1,300 upstream enterprises to enhance industrial chain collaboration and resilience[36]. - The company has strengthened its strategic cooperation with national agencies, local governments, and enterprises to promote cross-border collaboration in information services[36]. - The company has implemented a comprehensive governance structure, enhancing risk prevention capabilities and ensuring sustainable development[31]. Financial Management and Investments - The company aims to maintain its dividend per share amount, with the final dividend expected to be distributed around June 26, 2024, pending shareholder approval[23]. - The company proposed a dividend payout ratio of 71% for the year 2023, with a final dividend of HKD 2.40 per share, totaling HKD 4.83 for the year, a 9.5% increase from 2022[58]. - The company aims to increase cash distribution to shareholders to over 75% of the profit attributable to shareholders within three years starting from 2024[52]. - The company incurred tax and surcharges amounting to RMB 3,071 million in 2023, up from RMB 2,898 million in 2022, which is an increase of 5.9%[157]. Challenges and Market Conditions - The company has faced challenges due to complex external environments, including international trade and technology barriers affecting supply chain security[45]. - The company has reported a significant increase in the integration of AI technologies, which is transforming the information service landscape[45].

Financial Performance - For the first three quarters of 2023, the operating revenue reached RMB 775.6 billion, representing a year-on-year growth of 7.2%[8] - Communication service revenue was RMB 664.6 billion, also reflecting a year-on-year increase of 7.2%[9] - EBITDA amounted to RMB 268.5 billion, with a growth of 6.7% compared to the previous year[9] - The group's net profit attributable to shareholders was RMB 105.6 billion, an increase of 7.1% year-on-year, with a profit margin of 13.6%[38] - The EBITDA for the same period was RMB 268.5 billion, reflecting a year-on-year growth of 6.7%[38] - The revenue from the group's DICT business reached RMB 86.6 billion, marking a significant year-on-year increase of 26.4%[37] - Operating expenses totaled RMB 662.1 billion, up from RMB 621.3 billion in the previous year[40] - The group reported a total comprehensive income attributable to shareholders of RMB 107.2 billion for the period, compared to RMB 100.3 billion in the previous year[41] Customer Metrics - The number of mobile customers reached 990 million, with 750 million subscribing to 5G plans[9] - The total number of fixed broadband customers reached 295 million, with a net increase of 22.52 million in the first three quarters[11] - The average revenue per user (ARPU) for mobile services was RMB 51.2, showing a year-on-year increase of 1.0%[20] - The average monthly mobile internet traffic per user reached 15.6 GB, indicating stable growth in data services[20] Cash Flow and Assets - The net cash increase for cash and cash equivalents was RMB 9.77 billion, compared to a decrease of RMB 39.54 billion in the same period last year[5] - As of September 30, 2023, total assets amounted to 1,984,476 million, an increase from 1,935,538 million in December 31, 2022[42] - The company's total liabilities increased to 665,247 million from 634,115 million year-over-year[43] - Equity attributable to shareholders rose to 1,315,073 million, up from 1,297,348 million in the previous year[43] - Net cash inflow from operating activities for the nine months ended September 30, 2023, was 237,678 million, an increase from 227,592 million in the prior year[44] - The company's cash and cash equivalents increased to 177,383 million from 167,106 million year-over-year[42] - Accounts receivable rose significantly to 69,140 million from 40,245 million, indicating a 71.7% increase[42] - The company reported a decrease in inventory to 13,830 million from 11,696 million, reflecting a strategic reduction[42] - Non-current assets totaled 1,472,263 million, slightly down from 1,479,167 million in the previous year[42] - The company’s deferred tax assets increased to 47,447 million from 43,638 million, indicating a positive trend in tax management[42] Strategic Initiatives - The company aims to expand its "full thousand-gigabit + cloud life" value space in the home market, focusing on broadband and IoT services[11] - The group aims to enhance quality development and create greater value for shareholders and customers through risk control and efficiency improvements[22] - The group emphasizes the development of new information service systems focusing on 5G and computing power networks[36] Profitability - Operating profit before tax for the nine months ended September 30, 2023, was 137,848 million, compared to 127,955 million for the same period in 2022[44]

Stock Options and Fair Value - The weighted average fair value of stock options granted was HKD 4.00 per share for the first grant and HKD 3.28 per share for the second grant[1]. - The average exercise price of stock options as of June 30, 2023, was HKD 52.60, with a total of 859,601,819 stock options outstanding[13]. - The average remaining contractual life of unexercised stock options as of June 30, 2023, was 8.5 years, down from 9.0 years as of December 31, 2022[14]. - The total number of stock options exercisable as of June 30, 2023, was 166,515,356[14]. - The stock option incentive plan approved in May 2020 allows for the issuance of up to 2,047,548,289 shares, representing approximately 9.58% of the company's total share capital as of August 10, 2023[72]. - The company has a remaining plan authorization of 1,159,948,571 stock options as of June 30, 2023[78]. - The company has not granted any stock options during the six months ended June 30, 2023[77]. - The weighted average exercise price for stock options exercised from January 13, 2023, to June 30, 2023, was HKD 55.00, with an average closing price of HKD 64.10 prior to the exercise date[80]. - The stock options will be exercisable in three tranches, with the first tranche (40%) opening 24 months after the grant date[78]. Financial Performance - The company's operating revenue for the first half of 2023 was RMB 530.7 billion, an increase of 6.8% compared to the same period last year[48]. - Communication service revenue reached RMB 452.2 billion, growing by 6.1% year-on-year[48]. - The company's net profit attributable to shareholders was RMB 76.2 billion, reflecting an 8.4% increase from the previous year[52]. - EBITDA for the first half of 2023 was RMB 183.5 billion, up 5.5% year-on-year, with an EBITDA margin of 34.6%[52]. - Operating expenses amounted to RMB 450.4 billion, a 6.6% increase year-on-year, accounting for 84.9% of operating revenue[49]. - Employee compensation and related costs rose to RMB 70.4 billion, a 10.2% increase compared to the previous year[49]. - The cost of sales for products was RMB 77.3 billion, increasing by 12.2% year-on-year, representing 14.6% of operating revenue[50]. - The company reported a free cash flow of RMB 79.1 billion for the six months ending June 30, 2023, with cash and bank balances totaling RMB 281.4 billion[56]. - The company aims to continue its prudent financial policy and maintain healthy cash flow generation capabilities[56]. Assets and Liabilities - As of June 30, 2023, the company's total assets amounted to RMB 1,991.6 billion, total liabilities were RMB 654.7 billion, resulting in a debt-to-asset ratio of 32.9%[54]. - The total equity attributable to shareholders increased to RMB 1,332,768 million from RMB 1,297,348 million, showing a growth of approximately 2.7%[170]. - Cash and cash equivalents reached RMB 204,928 million, up from RMB 167,106 million, representing an increase of about 22.6%[168]. - Accounts receivable surged to RMB 68,564 million from RMB 40,245 million, reflecting a significant increase of approximately 70.2%[168]. - The total amount of accounts payable as of June 30, 2023, was RMB 170,341 million, an increase from RMB 156,536 million as of December 31, 2022, representing a rise of approximately 8.8%[159]. - The company’s non-current liabilities decreased slightly to RMB 96,801 million from RMB 100,778 million, a decline of about 4.0%[170]. Capital Expenditure and Investments - In the first half of 2023, the company's capital expenditure reached RMB 81.4 billion, accounting for 18.0% of telecommunications service revenue, with RMB 42.3 billion allocated to 5G-related capital expenditure[53]. - The company has signed contracts for capital expenditures not yet recognized in the financial data, indicating ongoing investment in infrastructure[41]. - The company plans to utilize the raised funds in accordance with previously disclosed plans without significant changes or delays[58]. - As of June 30, 2023, the company had invested approximately RMB 42.9 billion of the raised funds, with RMB 8.46 billion remaining to be invested[58]. Revenue Growth and Market Performance - Revenue from communication facility construction services increased to RMB 771 million, up from RMB 701 million year-over-year, representing a growth of approximately 10%[17]. - Total revenue from integrated services decreased to RMB 167 million, down from RMB 179 million, reflecting a decline of about 6.7%[17]. - Technology support service fees decreased to RMB 152 million from RMB 191 million, a decline of approximately 20.4%[17]. - The personal market revenue reached RMB 259.4 billion, a year-on-year increase of 1.3%, with mobile customers totaling 985 million, net adding 10.38 million[119]. - The enterprise market revenue was RMB 104.4 billion, growing 14.6% year-on-year, with mobile cloud revenue at RMB 42.2 billion, up 80.5%[124]. - Emerging market revenue reached RMB 23.5 billion, a year-on-year increase of 18.4%, with international business revenue at RMB 10.1 billion, growing 25.9%[125]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 2.43 per share for the six months ended June 30, 2023[89]. - The company aims to distribute over 70% of its annual profit in cash to shareholders, enhancing shareholder value[115]. - The interim dividend per share declared was HKD 2.43, compared to HKD 2.20 in the previous year, reflecting an increase of about 10.5%[110]. - The company will withhold 10% corporate income tax on the interim dividend distributed to non-resident corporate shareholders[90]. Corporate Governance and Compliance - The company has fully complied with the Corporate Governance Code as per the Hong Kong Listing Rules during the six months ended June 30, 2023[86]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2023[83]. - The company’s auditor has issued a report on the financial statements without any reservations[197]. - The interim financial data is prepared in accordance with international accounting standards and complies with applicable disclosure requirements[193]. Strategic Initiatives and Future Outlook - The company is advancing its digital transformation strategy to stimulate high-quality development and create new growth momentum[57]. - The company is actively pursuing 6G research and has proposed a systematic 6G network architecture, showcasing its commitment to future technology[140]. - The company is enhancing its ESG management practices, focusing on sustainable development and social contributions, which have garnered high social recognition[144]. - The company is expanding its strategic partnerships with local governments and enterprises to promote digital economy innovation and cross-industry collaboration[142].

Technological Innovation and Development - The company has accelerated technological innovation and expanded collaborative efforts, enhancing its innovation capabilities for future development[4]. - The company has established a technology innovation system called "One Body, Five Circles," which includes over 1,300 partner companies to promote high-quality development in the industry chain[5]. - The company has made significant breakthroughs in key technologies, including the release of the V2.0 version of the He Yun network security platform engine, which integrates 71 mainstream tools in the industry[5]. - The company is actively promoting the integration of 5G technology with various industries through its 5G innovation consortium[5]. - The company has launched a new artificial intelligence platform called "Nine Heavens," which supports over 830 applications across 27 fields[13]. - The company has expanded its open cooperation strategy, enhancing partnerships with local governments and enterprises to promote digital economy innovation[14]. Financial Performance - Operating revenue reached RMB 530.7 billion, an increase of 6.8% year-on-year; communication service revenue was RMB 452.2 billion, up 6.1%[24]. - Shareholders' profit attributable to the company was RMB 76.2 billion, reflecting an 8.4% year-on-year increase[24]. - Digital transformation revenue amounted to RMB 132.6 billion, growing 19.6% year-on-year, accounting for 29.3% of communication service revenue[24]. - The company reported a total comprehensive income of RMB 77,892 million for the six months ended June 30, 2023, compared to RMB 70,999 million for the same period in 2022, representing an increase of approximately 10.6%[60]. - The company’s capital expenditure was RMB 81.4 billion, with free cash flow increasing by 43.3% to RMB 79.1 billion[50]. - EBITDA was RMB 183.5 billion, representing a year-on-year increase of 5.5%[50]. Customer and Market Growth - Mobile customer base reached 985 million, with 5G package subscribers totaling 722 million; mobile ARPU increased by 0.2% to RMB 52.4[24]. - Fixed broadband customer count was 286 million, with household broadband subscribers at 255 million; household customer ARPU grew by 0.7% to RMB 43.3[24]. - The household market revenue reached RMB 64.9 billion, with a year-on-year growth of 9.3% and a net increase of 11.15 million household broadband customers[33]. - The enterprise market revenue was RMB 104.4 billion, increasing by 14.6%, with a net addition of 1.1 million enterprise customers[46]. - The number of mobile customers reached 985 million, with a net increase of 10.38 million[57]. - The number of 5G package customers reached 722 million, with a net increase of 108 million[57]. Revenue Streams - Big data revenue reached RMB 2.56 billion, representing a year-on-year growth of 56.6%[16]. - The mobile cloud revenue reached RMB 42.2 billion, growing by 80.5%, with IaaS revenue ranking in the top 3[46]. - Emerging market revenue reached RMB 23.5 billion, a year-on-year increase of 18.4%[47]. - International business revenue amounted to RMB 10.1 billion, growing by 25.9% year-on-year[47]. - Digital content revenue reached RMB 13 billion, with a year-on-year growth of 12.5%[47]. Challenges and Future Outlook - Future outlook indicates challenges in macroeconomic operations, with insufficient overall demand and increased competition among diverse entities[22]. - The company is focusing on transitioning from quantity scale leadership to quality efficiency leadership and from short-term performance to long-term value growth[58]. - The company aims to build a new information service system centered on 5G, computing power networks, and capability platforms[58]. Shareholder Returns and Dividends - The interim dividend declared was HKD 2.43 per share, a 10.5% increase year-on-year, with cash distribution of profits expected to exceed 70% of the annual profit attributable to shareholders[24][28]. - The group declared an interim dividend of HKD 2.430 per share (approximately RMB 2.240), up from HKD 2.200 (approximately RMB 1.881) in 2022, totaling RMB 47,887 million for the period[125]. - The company will withhold 10% corporate income tax on interim dividends distributed to non-resident shareholders[149]. Asset and Liability Management - The company's total assets as of June 30, 2023, amounted to RMB 1,991,596 million, a slight increase from RMB 1,935,538 million at the end of 2022[61]. - Total liabilities as of June 30, 2023, were RMB 654,711 million, compared to RMB 634,115 million as of December 31, 2022, showing an increase of about 3.2%[80]. - The group's total equity as of June 30, 2023, was RMB 1,336,885 million, up from RMB 1,301,423 million at the end of 2022, representing a growth of approximately 2.7%[80]. Compliance and Governance - The company has fully complied with the corporate governance code as per the Hong Kong Listing Rules during the reporting period[146]. - The company has adopted the standards for directors' securities transactions as per the Hong Kong Listing Rules, ensuring compliance[146].

Financial Performance - For Q1 2023, the operating revenue was RMB 250.7 billion, representing a year-on-year increase of 10.3%[8] - Communication service revenue reached RMB 209.8 billion, up 8.3% year-on-year[6] - Shareholders' profit amounted to RMB 28.1 billion, reflecting a 9.5% increase compared to the previous year[6] - EBITDA for the quarter was RMB 79.9 billion, with a year-on-year growth of 4.9%[6] - The company reported a profit of RMB 28,083 million for the three months ended March 31, 2023, compared to RMB 25,656 million for the same period in 2022, representing an increase of approximately 5.5%[20] - Total comprehensive income attributable to shareholders for the period was RMB 27,347 million, up from RMB 25,015 million in the previous year, reflecting a growth of about 9.3%[20] - Basic and diluted earnings per share for the period were both RMB 1.31, compared to RMB 1.20 in the same period last year, indicating an increase of 9.2%[20] - Operating profit before tax for the period was RMB 36,504 million, up from RMB 33,642 million in the same period last year, representing an increase of approximately 8.3%[31] Customer Metrics - The total number of mobile customers reached 983 million, with 689 million 5G package customers[13] - The average revenue per user (ARPU) for mobile services was RMB 47.9, showing a 0.8% increase year-on-year[13] - The total number of fixed broadband customers was 281 million, with a net increase of 8.72 million in the quarter[14] - The ARPU for fixed broadband services was RMB 31.4, down 3.1% year-on-year[14] Business Segments - The DICT business revenue was RMB 29.4 billion, marking a 23.9% year-on-year increase[14] - EBITDA margin for communication service revenue was 38.1%[6] Assets and Liabilities - The company's total assets as of March 31, 2023, were RMB 1,992,857 million, an increase from RMB 1,935,538 million as of December 31, 2022, showing a growth of approximately 2.9%[28] - The company’s total liabilities increased to RMB 663,636 million as of March 31, 2023, compared to RMB 634,115 million at the end of 2022, marking an increase of about 4.7%[30] Cash Flow and Investments - Cash inflow from operating activities for the period was RMB 75,205 million, compared to RMB 77,770 million in the previous year, reflecting a decrease of about 3.3%[31] - Investment cash outflow for the period ended March 31, 2023, was (33,721) million, compared to (40,438) million for the same period in 2022, representing a decrease of approximately 16.8%[33] - Cash and cash equivalents increased by 26,765 million, compared to a decrease of 10,305 million in the previous year[38] - The net interest and other financing income received was 1,600 million, a significant increase from 131 million in the same period last year[33] - The company reported a decrease in the purchase of property, plant, and equipment payments to (36,935) million from (40,438) million year-over-year, indicating a reduction of about 8.5%[33] - The net cash inflow from the disposal of financial assets measured at fair value was 2,659 million, down from 44,985 million in the previous year, reflecting a decline of approximately 94.1%[33] - The total cash and cash equivalents at the end of the period stood at 193,648 million, compared to 283,114 million in the previous year, showing a decrease of about 31.5%[39] - The company experienced a net decrease in bank deposits of 24,673 million, contrasting with a decrease of (4,927) million in the same period last year[33] Strategic Focus - The company aims to continue promoting open-source revenue growth and cost reduction while maintaining a focus on quality and efficiency[15] - The company is committed to enhancing resource allocation precision and achieving good growth in communication service revenue and net profit for the year[15] - The company plans to accelerate the construction and investment of new information infrastructure focusing on 5G and computing power networks[15] Investor Caution - The company cautioned investors to exercise caution when trading its securities, highlighting the importance of careful decision-making[35] - Forward-looking statements indicate potential risks and uncertainties that may significantly affect the company's actual performance and financial condition[40]