Core Insights - Qingdao Mobile has excelled in the 2025 National Key Area Mobile Network Quality Assessment, ranking fourth among 306 cities and winning the "Comprehensive Operator Award," highlighting its leading capabilities in mobile network construction and services [1][3]. Group 1: Network Quality Assessment - The assessment aims to implement the "Digital China Construction Overall Layout Plan" and the "14th Five-Year Plan" for the information and communication industry, evaluating mobile network signal quality in key urban scenarios through a combination of big data monitoring and on-site testing [1]. - Qingdao Mobile has previously received multiple national honors since 2020, including "Top Ten Excellent Cities for China Mobile's 5G Network" and "Key Scene Testing Excellent City," reflecting its commitment to network coverage, signal stability, and service responsiveness [3]. Group 2: Infrastructure Development - Qingdao Mobile has established over 24,000 5G base stations, accounting for more than half of the city's total, and has deployed 700M base stations in coastal areas, achieving full 5G signal coverage along high-speed rail and islands [4]. - The company has also launched over 3,000 5G-A base stations, ensuring basic coverage in main urban areas and core scenic spots, with a high visibility rate of 97% along coastal scenic areas [4]. Group 3: Digital Economy and AI Support - Qingdao Mobile has built the largest intelligent computing center in the northern coastal region, attracting over 300 local enterprises and major internet companies, providing robust AI computing support for regional digital economic development [5]. Group 4: Community and Social Services - The company integrates advanced communication technology into public services, enhancing events like the Qingdao Marathon and the Qingdao International Beer Festival with 5G-A technology to ensure seamless connectivity for large crowds [7]. - Qingdao Mobile's initiatives, such as the "Mobile Love Home" brand and "Honorary Military Service" program, demonstrate its commitment to improving the quality of life for citizens through technology [7]. Group 5: Future Aspirations - The recent award serves as both recognition of past achievements and motivation for future development, with Qingdao Mobile aiming to leverage its digital leadership to empower the city's digital transformation and contribute to the construction of an international metropolis [7].

Investment Rating - The report maintains a "Buy" rating for the company [6][11]. Core Views - The company reported a slight decline in revenue but a solid growth in net profit, indicating resilience in its operations. The net profit for the first half of 2025 increased by 5.0% year-on-year to CNY 84.24 billion, aligning with previous expectations [1][5]. - The company is well-positioned to benefit from the AI+ sector, with various business segments expected to gain from advancements in digital intelligence [1][5]. - The company continues to maintain a high dividend yield, with a proposed interim dividend of HKD 2.75 per share, reflecting a 5.8% increase year-on-year [1][5]. Revenue and Profitability - The company's revenue for the first half of 2025 was CNY 543.77 billion, a decrease of 0.5% year-on-year, primarily due to a decline in mobile terminal sales [1][10]. - The personal market revenue decreased by 4.1% to CNY 244.7 billion, attributed to a slight drop in ARPU, while the family market showed a 7.4% increase in revenue to CNY 75 billion, benefiting from the growth in broadband users [2][3]. - The enterprise market revenue grew by 5.6% to CNY 118.2 billion, with mobile cloud revenue increasing by 11.3% to CNY 56.1 billion, indicating a shift towards new growth drivers [3][4]. Cost Management and Profitability Metrics - The company effectively controlled costs, with network operation costs, depreciation, and sales expenses decreasing by 2%, 1.2%, and 1.5% respectively [4][10]. - The net profit margin improved by 0.82 percentage points to 15.50%, and return on equity (ROE) increased by 0.07 percentage points to 6.04% [4][10]. Future Earnings Projections - The company is projected to achieve net profits of CNY 145.4 billion, CNY 152.5 billion, and CNY 159.8 billion for the years 2025, 2026, and 2027 respectively [5][11]. - The report anticipates a steady increase in earnings per share (EPS) from CNY 6.73 in 2025 to CNY 7.39 in 2027 [11][18]. Valuation Metrics - The report assigns a target price of CNY 126.3 for A-shares and HKD 97.2 for H-shares, based on a price-to-book (PB) ratio of 1.9 times for A-shares and 1.34 times for H-shares [5][11]. - The company’s market capitalization is approximately CNY 2.33 trillion, with a six-month average daily trading volume of CNY 1.33 billion [7][10].