China Mobile dividend gloom

Business | Avery Chen 22 Mar 2019

China Mobile (0941) posted 3.1 percent growth in net profit to 117.8 billion yuan (HK$138.29 billion) for last year, but declared a lower-than-expected final dividend of HK$1.391.

Total dividends amounted to HK$3.217 per share, with a dividend payout ratio of 49 percent.

Chairman Yang Jie, former chairman of China Telecom said the payout ratio is at a relatively high level, compared with companies of similar size.

Operating revenue rose 1.8 percent to 736.8 billion yuan of which revenue from telecommunications services climbed 3.7 percent to 670.9 billion yuan.

The total number of mobile customers was 925 million in 2018, representing a net addition of 37.87 million, while the total number of 4G customers reached 713 million in 2018.

Mobile average revenue per user fell 8 percent to 53.1 yuan, amid Beijing's "speed upgrade and tariff reduction" requirements and ever-escalating peer competition in the personal mobile market, the company said. Yang expects ARPU to continue to fall this year.

He said the firm will build 30,000 to 50,000 5G based stations this year, and he expects 2020 and 2021 will see 5G investment peak.

With a net increase of 37.42 million, the number of household broadband customers totaled 147 million and accounted for a market share of 41.5 percent. Household broadband blended ARPU added 3.2 percent to 34.4 yuan.

Shares of China Mobile slumped 4.7 percent to HK$83.15 yesterday.

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