Credit Suisse lowered its target price for China Mobile (00941) to HK$83.5 from HK$85 and maintained its "outperform" rating.
The research house sees a small "miss" in Mobile's 9-month results. EBITDA grew by 5.3%, largely due to the implementation of IFRS 16; tower lease payments are no longer being
charged at the EBITDA level. Given that the costs simply shifted down the P&L account, headline earnings declined by 13.9%, but this was still an improvement versus 1H's 14.6% decline.
Nevertheless, Credit Suisse trimmed its FY2019 service revenue, EBITDA and net profit forecasts by 1.7%, 2.2%, and 4.6%, respectively. Against this, management confirmed that the company will maintain a "stable" dividend across the full year, and the upside risk to total capex is now capped.
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