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0941:HKG – Market expectations are for China Mobile to see Uniform ROA decline further from recent lows, driven by increasing competition and the 5G transition

April 20, 2018

      • China Mobile Limited (0941:HKG)is currently trading below historically average valuations relative to UAFRS-based (Uniform) Earnings and Assets, with a 11.6x Uniform P/E and a 0.9x Uniform P/B. At these levels, the market is expecting Uniform ROA to decline from 8% in 2016 to 4% through 2021, representing trough levels never before seen by the company
      • Specifically, the market appears to expect the firm to be unable to offset recent revenue declines in their voice services offerings through investments in their Wireline Broadband and IoT segments. Additionally, the market appears concerned about the sustainability of the firm’s leadership position as the world transitions to 5G over the next few years

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