Nomura: Maintains "buy" rating on China Mobile Limited (00941) with target price lowered to HK$88.

Nomura released a research report stating that they have slightly lowered the target price for China Mobile Limited (00941) by 1.1%, from HK$89 to HK$88, while maintaining a "Buy" rating. Nomura has also lowered the company's revenue forecast for the 2024-2026 fiscal years by 2.4-3.7% and profit forecast by 1.1-2.5%, mainly reflecting weak demand from customers and enterprises, but they believe that its revenue and profit will bottom out in the 2025 fiscal year. The company is expected to have a dividend yield of 6.3% in the 2025 fiscal year. The bank believes that China Mobile Limited continues to be one of the most defensive H-share stocks, mainly due to its strong balance sheet, strong cash flow growth, and reduced capital expenditure, allowing for sustainable dividend growth (with a dividend payout ratio of over 75% expected in 2026). The company's weak fundamentals may continue as its core business, especially the mobile business, faces saturation and increased competition. China Mobile Limited's government and enterprise business is also affected by weak IT spending, which will likely see the company bottoming out by the time the economy recovers.