In a report released today, Gary Yu from Morgan Stanley maintained a Hold rating on China Mobile, with a price target of HK$85.00.
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Gary Yu has given his Hold rating due to a combination of factors, including China Mobile’s only marginal top-line expansion and pressure on profitability. Service revenue in the latest quarter grew slightly and roughly matched his expectations, while EBITDA also inched higher but still came in just below his model, indicating limited operational upside in the near term.
At the same time, reported net profit fell sharply, largely driven by adverse tax effects related to package restructuring, which clouds earnings visibility. Although the company is committing to disciplined capex cuts in legacy networks, ramping investment in computing and AI, and delivering growing free cash flow and dividends, Yu appears to see these positives as already largely reflected in the share price, leaving only moderate upside to his target and justifying a Hold stance.