Last week, you might have seen that China Mobile Limited (HKG:941) released its third-quarter result to the market. The early response was not positive, with shares down 4.8% to HK$77.10 in the past week. It looks like the results were a bit of a negative overall. While revenues of CN¥242b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.7% to hit CN¥1.24 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from China Mobile's 15 analysts is for revenues of CN¥1.06t in 2027. This would reflect a modest 2.2% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 5.5% to CN¥6.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.06t and earnings per share (EPS) of CN¥6.25 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for China Mobile
The analysts reconfirmed their price target of HK$94.58, 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. There are some variant perceptions on China Mobile, with the most bullish analyst valuing it at HK$102 and the most bearish at HK$80.71 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting China Mobile is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. 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 2027 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 4.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that China Mobile is also expected to grow slower than other industry participants.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider 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. We have forecasts for China Mobile going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for China Mobile that you should be aware of.
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