China Mobile expected to report 30pc rise in earnings
China Mobile is expected to deliver an 18 to 30 per cent increase in net profit for last year, thanks to strong growth in the rural market.
The mobile operator will announce its full-year results on Wednesday, with market analysts expecting a profit of between 63 billion yuan and 69.7 billion yuan on revenue of 294.3 billion yuan, a rise of about 20 per cent.
According to monthly figures, China Mobile saw a 22 per cent jump in subscribers last year, extending its user base to beyond 301 million by the end of December last year, up from 246 million in 2005.
Market focus will be on the company's dividend payout ratio, with UBS expecting it to distribute 48 per cent of its net profit to shareholders, including a special dividend as compensation for the change in its depreciation policy.
There will also be strong interest in its capital expenditure level, the schedule for third-generation licences, the TD-SCDMA trial and the implementation of the calling-party-pay pricing mechanism.
'On the listed company level, China Mobile's capital expenditure level should be higher than our previous estimate due to the rural expansion, capacity increase and network upgrade,' UBS analyst Wang Jinjin said.
UBS estimated its capital expenditure at 96 billion yuan for this year and 95 billion yuan for next.
China Mobile and China Unicom have started to offer free incoming call packages in big cities such as Beijing and Guangzhou and the market believes the elasticity over pricing should boost their market penetration.
The market also is focused on the schedule of China Mobile's return to the domestic stock market.
