On January 5, China Mobile's A-share market was listed, the largest IPO in nearly a decade, with a market value of more than one trillion yuan.
After the era of mobile Internet, where will the main battlefield of communication operators be, and what impact will the expectations of metacosmity and blockchain have on the communication industry?
After Fetion and Migu, what C-end products will China Mobile have a new layout in the future?
This issue of "Titanium Hot Review" invites senior media people to join them on the topic of "The return of communication giants, how can China Mobile support the trillion market value?" "There was a discussion, and below is a collection of some of the ideas.
Guo Shiliang, economic observer of Guangdong Radio and Television Station:
Shortly after China Mobile went public, its stock price was on the verge of breaking. Due to the support of the green shoe mechanism, China Mobile does not have the risk of breaking in the short term, but the green shoe disk is only a short-term measure, and in the medium and long term, it still depends on the core values and growth capabilities of the mobile itself.
As of now, China Mobile's A shares are nearly 30% premium to H shares. At present, the total market value of China Mobile is 1.24 trillion yuan, and the valuation is about 11 times, but the net assets per share are 55.87 yuan.
China Mobile's return to A-share listing is mainly due to several reasons. Among them, China's core assets were delisted from the US stock market and returned to the A-share market, and the three major operators achieved simultaneous listing of AH shares, which is conducive to protecting China's core assets and avoiding the risk of overseas capital sniping.
In addition, China Mobile has broadened its A-share financing channels and listed AH shares simultaneously, further improving financing efficiency and meeting the needs of medium- and long-term sustainable development of enterprises.
In addition, China Mobile's return to A-share fundraising this time is mainly used in 5G boutique network construction projects, new generation information technology research and development and digital intelligence ecological construction projects and other projects, through the deep cultivation of 5G business, to open a new profit breakthrough.
In the era of big data and the era of meta-universe, traditional operators have many advantages that can be played on the basis of having a huge user scale. However, whether traditional operators such as mobile and telecommunications have the development genes of fresh products still need to be continuously excavated.
As a giant and leader of global operators, with the rise of the 5G era, China Mobile has the expectation of opening up profitable growth space. However, from the perspective of the capital market, China Mobile belongs to traditional operators, the valuation given by the market will be more conservative, more likely to be regarded as a long-term market value placement of the holding object, in the mobile 5G construction and application scenario development did not appear beyond the expected performance, the market for the traditional operator's valuation pricing or tend to be cautious.
Yang Yi, editor of The Weekly Journal of Finance and Economics:
The three major telecom giants gathered in A shares to achieve A+ H listing.
Although China Telecom did not make a good start, in fact, the performance of operators is still quite good. China Telecom's financial report shows that in the first three quarters of this year, China Telecom's operating income and net profit attributable to the mother were 326.536 billion yuan and 23.227 billion yuan, respectively, and the revenue and profit achieved double-digit growth.
In the first three quarters of 2021, China Mobile's revenue was 648.6 billion yuan and net profit was 87.2 billion yuan. Guizhou Moutai, the leader of A-shares, only had a net profit of 37.2 billion yuan in the first three quarters.
The next A-share performance of the three major operators will mainly depend on their respective developments in the 5G field.
In its prospectus, China Mobile clearly stated that one of the financing purposes is 5G construction. After the maturity of 5G networks, it will bring more application scenarios and create more value for operators. But it will take time. The time has yet to come for 5G networks to create value for operators on a large scale.
Mustang Finance author Xu Changqing:
As early as 2019, China's communications industry has encountered bottlenecks due to the severe challenges of speeding up and reducing fees, market saturation, fierce market competition, and the gradual fading of 4G traffic dividends. When the era of relying on the demographic dividend is gradually drifting away, 5G is regarded by the industry as the hope of breaking the game, and the three major operations are also shifting the competition to the position of 5G.
According to public information, at the end of 2020, the number of 5G network users in China officially exceeded 160 million, accounting for 89% of the total number of global 5G users. In that year, 720,000 5G base stations had been built in the country, accounting for more than half of the world's total. Among these 5G base stations, China Mobile occupies half.
At the end of June 2021, China Mobile's 5G package customers reached 251 million, with a penetration rate of 27%, and the mobile ARPU (customer unit value) was 52.2 yuan, and the number of customers was the sum of China Telecom and China Unicom. In November 2021, the three major telecom operators released data showing that China Mobile accounted for more than 50% of mobile users, 5G package users, and new 5G package users.
At present, China Mobile has completed the key technology verification of 5G millimeter wave, and plans to achieve commercial deployment of 5G millimeter wave this year, and millimeter wave is considered to be an essential technology for the second phase of 5G, and its high speed, large capacity and low latency are also the basis of the Internet of Everything.
Industry analysts pointed out that cooperative competition to achieve balanced competition and multi-win results is an unchangeable mainstream development trend in the telecommunications industry. Competition and co-construction is a non-zero game, and the enterprise strategy of cooperation and competition is to focus on the ideological analysis of the game and the fair and reasonable cooperative competition relationship, and finally achieve a win-win situation, and even maximize the interests of each in the game.
Since the second half of 2019, the three major operators have opened up the reform of industry competition and cooperation, and have made great efforts to standardize market tariffs, sales costs and behaviors, while China Telecom and China Unicom have also opened a co-construction and sharing model.
Luo Chaolin, founder of Zero One Growth:
Non-market factors aside, individuals are happy to see high-quality targets listed on A-shares (do we see the giants of the United States listed outside the United States?). ）。 When the return of overseas listed targets to A shares will bring great overall improvement to A shares. The most direct point is that if you want to buy the world's top target in the future, you can come to A shares, exchange for RMB (indirectly stimulate appreciation), you can make your own rules of the game, you can... (Not to expand, many practices of the US stock market, we can do, but not necessarily choose to do). Therefore, the repurchase of A shares should be a deterministic event in a long period.
Back to China Mobile itself, the trillion market value is properly matched, look at its shareholder structure, assets, users, infrastructure services, etc., you know. For example, can you make a phone call without sending a message from your mobile number or without using a mobile network?
At the business model level, at the current and trend point of view, voice MMS has gradually changed from the main business to the secondary business, which is the reaction of the market iteration, and the mobile has also switched tracks to various network-related services (Internet access and various value-added services). It can be said that holding the entrance-level products (telephone + network) that are just needed is the real "hydropower coal" of the Internet giant APP, and will you still brush without the WeChat vibrato of the network?
Therefore, relying on the background of shareholders, in the case that the senior management team does not make a principled error, revenue may not necessarily increase significantly, and the level of net profit is still guaranteed. Of course, we can combine the post-95-05 grounded innovation, carry out moderate venture capital of the user base here (with the help of CVC, strategic LP, FOF and other forms), become a strategic shareholder of the C-end gathering place, and may be able to obtain more users and more stable business opportunities.
Value Institute Editor Lin Zhibai:
As an anticipated superIPO, the capital market does not seem to be so optimistic about China Mobile, and it seems inevitable that it will break in the near future.
In fact, the pressure on mobile is not small: on the one hand, the decline in the revenue of individual users, per capita ARPU fell from 60 yuan in the peak period of 2017 to less than 50 yuan last year; on the other hand, the cost of 5G infrastructure and network maintenance has risen, and the energy cost of 5G network construction alone in the first half of the previous fiscal year was as high as 24.3 billion yuan - in contrast, the annual energy cost of the year before the commercial use of 5G was only 32 billion.
Under pressure, even if the capital is strong, such as China Mobile, it can only take the open source and cost reduction method to reduce operating costs. For example, in the past three years, the number of social places has been significantly reduced, and the number of employees has dropped from 459,000 at the end of 2018 to 446,000 in 2021.
In addition to throttling, open source is of course also an important way for China Mobile to get rid of business pressure. The emerging concepts of metacosmity and blockchain are still in the exploratory stage, and it is not realistic to achieve commercialization at this stage. In fact, as early as 2020, China Mobile's home market, mobile market and other C-end businesses have shown signs of saturation, and it is very difficult to maintain rapid growth. On the contrary, in the case of the rapid development of the industrial Internet and the tide of digitalization and intelligence sweeping the world, China Mobile, which has the advantages of communication and technology, should pay more attention to the growth space of the B-end.
Miao Lingyun, deputy editor-in-chief of Mustang Finance:
If analyzed from a purely fundamental point of view, China Mobile can be said to be a white horse stock with certain development potential.
The first is the financial situation, 1.8 trillion yuan of total assets, 35.05% debt ratio, 274.1 billion cash and equivalents, without any debt (interest-bearing borrowings); corresponding to about 800 billion yuan of revenue per year, 100 billion of non-net profit, 300 billion net flow of operating activities (2020 data), security naturally need not be said.
The second is the growth space, the company's current main business by voice, short MMS, wireless Internet access, wired broadband, application and information services five blocks, the first four business is well understood, application and information services refer to ICT, IDC, cloud computing, Internet of Things, data line and other specific projects.
As can be seen from the above figure, wireless Internet access and limited broadband services are the cornerstone businesses of China Mobile, and due to the advantages of licenses and resources, the company can maintain a first-mover advantage in these two services for a long time.
For example, the rise of 5G in recent years, by the end of 2020, the number of 5G base stations built nationwide is 720,000, accounting for more than half of the world's total. As of the end of June 2021, the number of 4G base stations of China Mobile reached 3.32 million, accounting for about one-third of the global total, and 500,000 5G base stations, while the company's 5G package customers reached 251 million, with a penetration rate of 27%, which is the sum of China Telecom and China Unicom, not to mention other peers.
The number of base stations of this scale is also one of the important reasons why China Mobile's signal is relatively good.
It is worth focusing on China Mobile's application and information service business.
From 2018 to the first half of 2021, the proportion of revenue of this business has risen from 11.28% to 17.62%, although it is still less than 20%, but in absolute terms, it has risen from 75.7 billion to 69.2 billion (half-year data), almost doubled. Compared with the above business, this business has shown greater growth.
For example, ICT (DICT), holding a large number of 5G resources, China Mobile has a natural information channel and bridge in this field, which can bring customers one-stop, integrated services; for example, China Mobile has a huge amount of data storage, computing, processing needs, it has accumulated considerable technical experience in the field of IDC and mobile cloud, which can stably realize the ultra-low latency service and super computing power sinking of cloud and edge computing, and promote these capabilities, both product advantages and low marginal costs; "Super SIM" business, digital identity (such as ID card), digital currency, digital car key, digital access control, digital certificate integration can be said to be an important development trend in the future, then the "SIM" card is undoubtedly an important carrier of these content to choose from; what may be less known is that as of the end of June 2021, China Mobile has more than 14 million home security (that is, smart cameras, smart cat's eye, etc.) users...
It can be said that China Mobile is an important participant and beneficiary of the "new infrastructure", and its layout of business in many specific areas has its own genes.
So why is China Mobile "certain" rather than "great" development potential? This should be understood from two levels of logic.
First, is its special identity, whether it is a practical need or strategic planning, China Mobile needs to put more energy and money on the cornerstone business construction, to ensure the stability and comprehensiveness of services, to do more social responsibility, national defense and security and other non-profit layouts, such as laying optical fiber cables in remote areas, contracting some special business, etc., and China Post has certain similarities. Under such circumstances, China Mobile's investment and explosive power in innovation are relatively limited.
In 2018, 2019, 2020 and the first half of 2021, China Mobile's R&D expenses were 3.865 billion yuan, 6.67 billion yuan, 11.099 billion yuan and 5.795 billion yuan, accounting for 0.52%, 0.89%, 1.45% and 1.31% of the revenue, respectively, which is not high; and half of the funds raised in this A-share IPO are also invested in the construction of 5G networks, which is a matter of Loudin Xisheng.
At the same time, China Mobile's leadership in the 5G field has a lot to do with the achievements of Huawei, the largest supplier in the 5G field, rather than its own technological breakthrough.
Second, based on the above reasons, China Mobile is not outstanding in marketing and service, and can even be said to be short-board, which can be seen from the market response of "Migu Video, Migu Music, Migu Game" and other series of products; of course, from the marketing expense rate of about 7%, it can also be judged that marketing is not the main strategy of China Mobile.
Back to this A-share listing, compared with the two barrels of oil, perhaps more should be understood as the "Chinese construction" in the era of new infrastructure, doing the industrial chain "from top to bottom, steady innovation" things, China's information and communication industry "2G follow, 3G breakthrough, 4G synchronization, 5G leading" leapfrog development, but also with China's construction industry from small to large, from weak to strong The process is quite similar, of course, this is a foreign word.
Jia Xiaojun, head of Bedo Finance:
China Mobile's listing in A-shares has played a certain role in boosting its own operations. We can take this opportunity to see that some of China Mobile's plans for the future, such as: 5G, cloud, Gigabit, etc., are also indispensable infrastructure construction for the future development of the Internet.
From an investment point of view, holding China Mobile A shares is more cost-effective than China Unicom and China Telecom. In terms of price-earnings ratio, China Mobile ranks at the bottom of the three, and the relative value-added space is greater. However, this does not mean that buying China Mobile will necessarily make money. In terms of communication service providers alone, mobile, Unicom and telecommunications have shortcomings, especially service quality and tariff transparency.
Looking at the future, China Mobile's external exploration is not small, including Migu and the previous Fetion, etc., and whether it can be long-term is another matter. However, the basic logic of the basic aspects of mobile will not change, which also depends on the relative stability of its main business.
Recently, China Mobile also reported the news of entering consumer finance, which is similar to China Unicom and so on. However, relatively speaking, the pace of China Mobile in the financial-related fields is relatively slow, losing the first-mover advantage, and whether it can be made into a belt remains to be examined.
Jiang Han, senior researcher of Pangu Think Tank:
China Mobile's return to the A-share listing, we can see that the entire operator has re-gathered in the domestic capital market, we can divide this matter into several parts to analyze:
First of all, in recent years, China's operator market has formed a clear trend, which is the channelization of operators, especially with the full rise of social applications, for operators is undoubtedly too top passing, whether it is voice or SMS have gradually begun to demonstrate, only traffic management is the only advantage of operators, and traffic has also allowed operators to gradually fall into a channel embarrassing situation, whether it is China Mobile or other operators, have become an appendage of traffic, Therefore, being channelized is already a trend that operators cannot avoid. Therefore, on this basis, for major operators, they must find ways to enhance their market competitiveness.
Secondly, from the current point of view, for operators, it is almost impossible to subvert social applications such as WeChat, and the rise of the meta-universe has undoubtedly brought more opportunities to operators, because if the meta-universe is to be realized, the infrastructure represented by the operator will be the most critical core of everything, and these key applications will inevitably rely on the operator's infrastructure, so for the current operators, they will make great efforts to promote the development of the meta-universe market. No matter which meta-universe will eventually emerge, or the infrastructure of operators recognized by the market is essential, which is what the major telecom operators really want to do.
Third, although the applications of 5G news are actually operators who want to fight again, can really change WeChat, and absolutely crush the situation of themselves, but in fact, it is almost impossible to do 5G news, can only say that an upgraded application, the possibility of really subverting the social platform is very low, so we do not have to consider what 5G news can bring to operators at this level.
Li Jie, founder of Baisheng:
China Mobile's return to A-shares is not because of lack of money, it should be known that China Mobile can earn at least 310 million yuan per day on average in 2021, among more than 4600 listed companies in A-shares, only 1354 have a net profit of more than 310 million yuan in 2020, which means that China Mobile earns more than 70% of the profits of A-share listed companies in a year.
By returning to the A-share listing and laying out the 5G market, it is possible that China Mobile's real intention is. In the next few years, it will be a period of rapid development of 5G application scenarios and industrial ecology, 5G has given China Mobile more imagination space, in terms of 5G landing industry applications, mobile 5G base stations exceed 500,000, ranking first in the world, with the continuous investment in education, medical, mining and other application scenarios, the industry's leading position will be further enhanced and consolidated.
China Mobile, which has returned strongly with a giant posture, if it wants to support the trillion market value, more directions should start from 5G, after all, it is no longer realistic to do C-end products in the case of the overall situation of social APP. With the development of new technologies such as industrial Internet of Things, intelligent cars, meta-universes, and blockchains, devices can be added to increase communication profitability, and the first-hand advantages in 5G communications can be used to continuously improve profitability.
Zhang Zhen, founder of the village affairs operator:
China Mobile returns to A shares, focusing on the return! Other aspects may not attract much attention! On the maturity and scale of the market, the overseas market advantage may be better than the domestic one, but the capital market needs the possibility, and the possibility of moving in these years has been fully demonstrated, and now it is a fixed template story, and only stability can speak of. The possible business sectors in China are basically scorched by major companies and major capitals! The business side of mobile is the one that's getting ahead. These new concepts and the like are presumably less likely to be in a hurry to follow, most likely digital infrastructure and big data. These two are the natural advantages of China Mobile, and they are the most potential and dynamic pieces, but if this story can be told, it is used globally. It is still necessary to look at the real product. There are also two companies of the same level in China, and the homogenization business and playing style have not seen a sense of freshness! So stability is the biggest expectation, as for others do not be demanding!
Zhongke Wenge Zhengyang:
The so-called dragon and phoenix, after experiencing the tragic failure of Feixin, the mobile should recognize the influence and importance of "genes". As a communication operator, Mobile has the advantages of strong base station coverage, user base, and national attributes. As early as 2017, Mobile joined hands with other operators to lay out the blockchain field, using blockchain technology to build a new 5G network infrastructure, while accelerating the development of 5G and blockchain integration applications, trying to shape a new business ecosystem. In the future, if we can start from the basic ecological construction of the metaverse, focus more on the underlying technology and ecological layout, perhaps in the future we can create a blue ocean, build a new identity of the ecological operator of the meta-universe, and achieve self-transcendence.
How much to say that the presiding chu shaojun:
Whether it is a metacosm or a blockchain, the real industry is formed, the ecology is formed, and there is still a long time, but whether it is a metacosm or a blockchain, the communication operators are not the protagonists, or they cannot escape the fate of the "pipeline". Relying on personal mobile messaging services, especially China Mobile, which started from SMS and voice, it is difficult to give birth to the pinnacle of SMS and voice call services that were once popular, even if data services such as CRBT and Fetion are difficult to recover. For the new layout of the C-end, it is a little bit of expectation to mention the "converged communication products" for many years, but it has not been launched for many years, and the resistance and difficulty can be seen. As early as 2014, China Mobile announced that it was about to launch the "converged communications" service, which was launched by upgrading the original three communication portals on the terminal, sms/MMS and address book, forming a basic communication service with new calls, new messages and new contacts as the core. From the perspective of the functional highlights emphasized by the fusion communication, users do not need to install other applications separately, they can directly send text, pictures, locations, etc. like WeChat, and the SMS, voice and address book icons in the mobile phone will be a social network after clicking on. Even if you don't have a number card in your phone, you can send text messages over free WiFi. It seems that it is actually an innovation of its own products, and it can even shake the status of WeChat to a certain extent, but it has not been out for many years, and the opportunity has long been missed, whether the follow-up will appear, and how it will appear is still unknown. In the 5G era, the "5G news" that China Mobile participated in pushing has some of the shadows of "converged communication" in that year, but so far it seems to be testing the water, and whether it can stir up a splash is unknown, let alone set off a big wave.
As for the future of China Mobile, personal mobile communication services, especially SMS and voice call services, the ceiling is already obvious, may not be as good as the traffic business to make money, but directly selling traffic is ultimately unable to escape the fate of "pipeline". If you have to find some possibilities for the future development of China Mobile, it is better to wait and see the current "government and enterprise affairs" sector of China Mobile's relatively fast growth, that is, the B-end business often said in the Internet industry, on the one hand, thanks to the user and data accumulation of China Mobile on the C-end, in fact, there should be a large amount of data that can be used to form B-end digital solutions to serve the government and enterprise market; on the other hand, China Mobile has been deeply cultivating in the "government and enterprise field" for many years, and the foundation is not to be underestimated; moreover, because of the epidemic and other factors, Because of the development of the times, B-end enterprises and government departments need a large number of data transformation services. In short, its own foundation and the development of the times have given China Mobile the mission and opportunity to do a great job in the government and enterprise market.
Li Shuhang, founder of Hangtong:
With the return of China Mobile to A-shares, China's three major communication operators have already won the victory in the domestic capital market. Of course, China Mobile can have this strong market value, mainly not because of how strong its future growth is, as long as it maintains its current state. For investors, mobile is also a more reliable investment target than the "predecessors" such as two barrels of oil or postal storage.
The rise of the mobile Internet has changed the past when operators were lying on the back of money, and the basic services of calling and text messages, which used to rely mainly on operator networks, were "overhead" due to instant messaging software. This is also the main reason why the mobile Fetion has rapidly declined after a short period of glory. But ott this kind of thing you can do, I can also do, the three major operators have smashed the cable TV job through IPTV. Mobile Migu further becomes the copyright owner of video resources, which also extends this practice.
But it's clear that c-end products like Migu are unlikely to be a major component of mobile's future strategy, especially when 5G networking has little incentive for end consumers and makes more sense for industrial applications. 5G has the advantages of high bandwidth and low latency. For end consumers, there is no obvious difference from 4G, but for mine mines, autonomous driving, telemedicine and other industrial applications that require higher precision, it may be a game-changer. This means that like the other two operators, mobile business expansion will have more room for enterprise-level 5G applications.
The other is the cloud business strength that mobile has accumulated over a long period of time. Before Alibaba, Tencent, Huawei, Baidu, etc. went to the cloud, the IDC computer room was originally the operator's work, and now it is only to undertake the old customers in the past, including a large number of government affairs and financial customers, which is a big share. Official data shows that in the first half of 2021, the year-on-year growth of the mobile cloud computing business reached 118%, and the revenue of this segment for half a year has caught up with the whole of last year. With the increasingly tightening of the country's compliance requirements for the computer room business, a number of small and medium-sized DDC are facing elimination, and the remaining share is good for any large manufacturer that operates in compliance.
Internet Beijing Diary Zhang Jingke:
Whether the return of mobile is the awakening of giants, or will hatch more new technology giants, it is worth looking forward to. In the era of SMS SP operators, China Mobile is a veritable super giant. Whether it is investment, market share, revenue and profit, as well as the ability to control the right to speak in the media and fight against the regulatory authorities, compared with the giants Ali and Tencent that dominate the mobile Internet discourse power today, the three major operators such as China Mobile have surpassed it. However, with the round of SP operator governance, the three major state-owned enterprise operators such as China Mobile after legal compliance have given up market space to private Internet companies and gradually moved to the background.
The Internet flourished. The PC Internet dominated by three major portals, such as Sina, Sohu and NetEase, has evolved into the era of mobile Internet led by private giants such as BAT. With the end of a new round of legal compliance supervision and governance of private Internet giants, China Mobile, a former giant state-owned enterprise that was once in the limelight, has come back to the front. It seems that state-owned enterprises and private enterprises have stood on the same running line, as to whether China Mobile can compete with today's private enterprise giant Tencent Ali and reshape the glory of state-owned enterprises, it is worth our attention.
But I am more looking forward to the emergence of new innovative enterprises and technology applications before the advent of a new round of technology or application revolution, and Huawei and TikTok go to sea, giving the public more surprises, not only in China, but more importantly, in the international community to create more new jobs and wealth.
China Mobile's return to A-shares, and the promotion of the digital yuan, may represent a new trend: state-owned enterprises are forced to rekindle their desire to seize the domestic market.
The compliance governance of the Internet in the past two years is like the decline of the Internet countries after the governance of MMS and CRBT in that year.
After hard technologies such as chips were stuck by Americans, mainly relying on the internet soft technology of the inner volume, selling more cabbage and making more online dramas and online games, it is obviously not enough to support China's exuberant and urgent dream of scientific and technological development.
As a result, the old man talked about the state-owned enterprises that were crazy about youth and the private enterprises that did not grow old and declined, and once again stood on the same running line.
"Titanium Hot Review" is a hot event observation column launched by Titanium Media, which mainly invites media and industry practitioners with unique insights and in-depth observations on the development of different industries and different business models to comprehensively display the impact and significance of the event through multi-angle interpretation.