Traditional business under pressure, China Mobile's revenue in the first half of the year decreased by 0.5% year-on-year, while net profit increased by 5% year-on-year | Financial Report Insights

In the first half of 2025, China Mobile delivered a "mixed" financial report: despite a significant increase in net profit, revenue saw a slight decline.

In the awkward reality of the overall telecom industry entering a phase of stock competition and digital transformation reaching a deep-water zone, China Mobile needs to discover new growth drivers.

On Thursday evening, China Mobile announced its performance report for the first half of the year, with the key points as follows:

Profit Performance

• Operating revenue of 543.8 billion yuan, a slight decrease of 0.5% year-on-year; main business revenue of 467 billion yuan, an increase of 0.7% year-on-year;

• Net profit attributable to the parent company of 84.2 billion yuan, an increase of 5.0% year-on-year; EBITDA reached 186 billion yuan, an increase of 2.0% year-on-year;

• Interim dividend of 2.75 HKD per share, an increase of 5.8% year-on-year, with the annual cash dividend ratio further increased;

• Net cash inflow from operating activities was only 8.38 billion yuan, a significant decrease of 36.2% year-on-year;

Core Business Progress

• Government and enterprise market revenue of 118.2 billion yuan, an increase of 5.6% year-on-year; digital income from DICT, Internet of Things, 5G private networks, etc., was impressive (digital transformation revenue of 156.9 billion yuan, an increase of 6.6% year-on-year).
• International business revenue of 14 billion yuan, an increase of 18.4% year-on-year; emerging market revenues from digital content, fintech, etc., also achieved high growth of 9.3%-24.5%.
• Mobile cloud revenue of 56.1 billion yuan, an increase of 11.3% year-on-year, has become the second growth engine of the group.

Traditional Business Continues to Face Pressure

China Mobile's mid-year report for 2025 presents a pattern of "steady progress with concerns."

From the financial data, the company's fundamentals remain solid: net profit of 84.2 billion yuan, an increase of 5.0% year-on-year, and an EBITDA margin maintained at 39.8%, leading the industry and demonstrating strong profitability.

However, the performance on the revenue side is less than satisfactory. Operating revenue of 543.8 billion yuan, a slight decrease of 0.5% year-on-year, marks a rare instance of negative growth in recent years.

In-depth analysis reveals that traditional businesses continue to face pressure: voice business revenue of 34.2 billion yuan, down 5.7%; wireless internet access revenue of 195.5 billion yuan, down 4.7%. This trend reflects the deep-seated challenges of industry transformation, with traditional communication demand saturated, forcing operators to accelerate the search for new growth momentum.

As the user base approaches its ceiling, the impetus for upgrading the revenue structure increases. After the end of the "traffic dividend," value creation and differentiated services are receiving more attention.

Digital Transformation Shows Results, Mobile Cloud Revenue Increases by 11.3% Year-on-Year

In the face of pressure from declining traditional business, China Mobile's digital transformation strategy is beginning to show results.

Most notably, digital transformation revenue reached 156.9 billion yuan, an increase of 6.6% year-on-year, accounting for 33.6% of main business revenue, an increase of 1.9 percentage points compared to the same period last year.

In the segmented fields, the government and enterprise market performed particularly well. Government and enterprise market revenue reached 118.2 billion yuan, an increase of 5.6% year-on-year, with mobile cloud revenue of 56.1 billion yuan, growing by 11.3% More notably, 5G private network revenue reached 6.1 billion yuan, a year-on-year increase of 57.8%, indicating a strong growth in enterprise digitalization demand. The rapid development of this B-end business not only brought incremental revenue but, more importantly, enhanced the technical content and profitability of the business.

Significant Decline in Operating Cash Flow, Financial Quality Worth Attention

Although the overall performance is stable, some financial details are worth investors' attention.

For example, the net cash flow from operating activities was 83.8 billion yuan, a significant year-on-year decrease of 36.2%, mainly due to the company's accelerated payment schedule to support the development of the industrial chain.

Additionally, the ending balance of accounts receivable was 105.8 billion yuan, an increase of 39.7% compared to the beginning of the period, primarily from government and enterprise business. Considering that government and enterprise clients typically concentrate their payments at the end of the year, this seasonal fluctuation is normal, but attention should still be paid to subsequent payment collections.

In terms of cost control, the company's main business costs increased by only 0.1%, far below the revenue growth rate, reflecting the effectiveness of refined management. Both selling expenses and administrative expenses have decreased, indicating a sustained improvement in operational efficiency