We maintain the TP at HK$78.00 and the investment rating as "Buy". Given the margin of safety from the relatively high dividend yield rate, and new opportunities brought about by cloud and data factor market, we maintain the TP at HK$78.00 and the investment rating as "Buy". The TP represents 11.2x/ 10.4x/ 9.6x FY23-FY25 PER.
　　Steady earnings and dividend growth, in line with market expectations. China Mobile’s (the “Company”) service revenue and shareholders' net profit in 1H23 were RMB171.0 billion (+6.3% yoy) and RMB12.39 billion (+13.1% yoy) respectively, in line with market expectations. The number of mobile customers and household broadband customers increased by 10.38 million and 11.15 million, respectively, with both ARPU been stable yoy. We expect mobile ARPU to remain stable in 2024. CAPEX in 2023 is expected to decrease yoy, while the Company wish its CAPEX to slowly decline continuously. The Company plans to increase its full-year dividend payout ratio in 2023 to over 70%; with strong cash flow as well as easing pressure on depreciation, we expect the Company may further increase its dividend payout ratio in 2024 and thereafter.
　　We expect the DICT business to grow beyond market expectations. Despite the Company's plan to slightly reduce CAPEX in 2023, the Company has increased its investment in computing power and other DICT areas.
　　China Mobile Cloud revenue in 1H23 increased by 80.5% yoy, leading the industry and beat market expectations. With more investment and strong market demand, we expect scale of the business to be further improved. But more important, China Mobile will keep investing in the R&D of self-developed core competencies to raise the proportion of self-developed products; this could increase the Company's voice in the industrial chain and the profit margin of the corresponding business. In terms of data factor, the amount of data collected by the Company's data middle platform every day is about 5.5PB, and the Company already has cooperations with several data exchanges. We believe that the Company will promote the development of data factor combined with AI from a strategic level, and the business will enter into more vertical industries, so we expect the data factor market will bring very large market opportunities.
　　Catalysts: Increase in dividend payout and dividend payout ratio; promotion of data factor-related business.
Risks: Slower-than-expected growth of cloud and data-related business; mismatch between investments and benefits.