China Mobile Limited (HKG:941) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of CN¥1.0t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.1% to hit CN¥6.15 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Mobile after the latest results.
SEHK:941 Earnings and Revenue Growth March 24th 2024
Taking into account the latest results, the most recent consensus for China Mobile from 18 analysts is for revenues of CN¥1.07t in 2024. If met, it would imply a modest 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 8.9% to CN¥6.71. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.08t and earnings per share (EPS) of CN¥6.76 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of HK$84.29, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values China Mobile at HK$114 per share, while the most bearish prices it at HK$74.69. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that China Mobile's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 7.3% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.3% annually. Factoring in the forecast slowdown in growth, it looks like China Mobile is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for China Mobile going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with China Mobile , and understanding this should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.