Goldman Sachs has released a research report stating that China Mobile's (00941) operating revenue for the first quarter of this year increased by 1% year-on-year to RMB 266.5 billion, largely in line with the bank's expectations. This performance was primarily driven by growth in mobile customers and the expansion of computing and artificial intelligence (AI) services during the quarter. However, the bank noted that China Mobile's first-quarter EBITDA declined by 5% year-on-year, falling short of its forecasts. Management has emphasized that improving efficiency is a key focus for enhancing competitiveness. By rolling the valuation model forward to 2027 and updating EBITDA projections, Goldman Sachs has raised the H-share target price from HK$88 to HK$94, while maintaining a "Neutral" rating.
Despite near-term pressure on communication services, Goldman Sachs remains positive about China Mobile's accelerated rollout of computing services, primarily driven by robust growth in intelligent computing services and the expansion of its cloud video user base. Furthermore, 5G base station deployments remain weak. Data from the Ministry of Industry and Information Technology shows that only 49,000 new 5G base stations were added in March 2026, below expectations. This is anticipated to pressure the company's short-term 5G subscriber growth and ARPU expansion. However, the bank expects that specialized services will drive ARPU improvement, and the 6G cycle will support long-term growth. Goldman Sachs has raised its net profit forecasts for China Mobile for 2026 and 2027 by 2% each, primarily reflecting increased AI/computing service revenue, product mix upgrades, and EBITDA margin improvements driven by enhanced operational efficiency.
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