We maintain the TP as HK$61.50 but upgrade the investment rating from "Accumulate" to "Buy". We forecast FY22-FY24 EPS to be RMB5.906/ RMB6.472/ RMB6.941, respectively. Considering rising profitability and dividends, we upgrade the investment rating to "Buy".
　　China Mobile's 1HFY22 results were in line with our expectations. Revenue from telecom services increased by 8.4% yoy, while EBITDA increased by 7.4% yoy. Shareholders' net profit increased by 18.9% yoy.
　　We expect "home" market revenue and "business" market revenue to still grow rapidly in 2H22. We expect wireline broadband users to further rise. Due to bandwidth upgrades as well as penetration of value-added applications, we expect broadband blended ARPU to still increase. We expect net addition of corporate customers to still be high in 2H22. With strong market demand and the Company's continuous investment and its strength in cloud and network convergence, we expect DICT revenue to still grow over 40% yoy in 2H22. We expect mobile service revenue to be stable in 2H22.
　　We expect future dividend payout to exceed market expectations. In 2H22, we expect growth of network, operation and support expenses as well as employee benefit expenses to be higher than growth of service revenue; we expect costs of products sold to still be in line with sales of products. We expect EBITDA margin to decrease yoy but shareholders' net profit to increase steadily. The Company plans to raise dividend payout ratio to over 70% in 2023, and we expect that dividend payout may exceed market expectations in the future.
　　Catalyst: Increase in dividend payout ratio.
　　Risk warning: Slower-than-expected growth of DICT business; increased competition may put pressure on ARPU.