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Interested In China Mobile Limited (HKG:941)? Here's How It Performed Recently

Simply Wall St

For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on China Mobile Limited (SEHK:941) useful as an attempt to give more color around how China Mobile is currently performing.

See our latest analysis for China Mobile

How Did 941's Recent Performance Stack Up Against Its Past?

941's trailing twelve-month earnings (from 30 June 2019) of CN¥108b has declined by -7.7% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 1.0%, indicating the rate at which 941 is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is facing the same headwind.

SEHK:941 Income Statement, October 22nd 2019

In terms of returns from investment, China Mobile has fallen short of achieving a 20% return on equity (ROE), recording 10.0% instead. Furthermore, its return on assets (ROA) of 6.0% is below the HK Wireless Telecom industry of 6.4%, indicating China Mobile's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for China Mobile’s debt level, has declined over the past 3 years from 12% to 9.9%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Usually companies that experience a prolonged period of decline in earnings are undergoing some sort of reinvestment phase Though if the whole industry is struggling to grow over time, it may be a indicator of a structural shift, which makes China Mobile and its peers a riskier investment. You should continue to research China Mobile to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 941’s future growth? Take a look at our free research report of analyst consensus for 941’s outlook.
  2. Financial Health: Are 941’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.