<h3><img src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-111924-300x169.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-111924-300x169.png"/></h3>
<h3><strong>1. Downgrade Rating and Target Price</strong></h3>
<ul>
<li>Latest Rating: Neutral (originally Buy)</li>
<li>Latest Target Price: HKD 88 (originally HKD 105)</li>
<li>Potential Upside: Approximately 9.7% (based on current stock price of HKD 80.20)</li>
<li>Valuation: The current stock price corresponds to a forecasted EV/EBITDA of about 3.6 times for 2026, which Goldman Sachs considers reasonable.</li>
</ul>
<hr/>
<h3><strong>2. Core Reasons for Downgrade in Rating and Target Price</strong></h3>
<h4><strong>1. Slowdown in 5G Business Growth</strong></h4>
<ul>
<li>Base Station Deployment Slowing: Only 8,000 new 5G base stations were added in China by December 2025 (far below expectations, a year-on-year decrease of 87%). It is expected that new 5G base stations will decline by 8%/7% to 540,000/500,000 in 2026/27.</li>
<li>Impact: Growth in 5G user numbers and ARPU (Average Revenue Per User) is under short-term pressure.</li>
</ul>
<h4><strong>2. Negative Impact of VAT Rate Increase</strong></h4>
<ul>
<li>The Ministry of Finance and the State Administration of Taxation announced an increase in the VAT rate for telecommunications basic services from 6% to 9%.</li>
<li>This is expected to impact China Mobile's revenue and profit margins, requiring the company to adjust its pricing strategy.</li>
</ul>
<h4><strong>3. Downgrade of Earnings Forecast</strong></h4>
<ul>
<li>Revenue forecasts for 2026/27 have been lowered by 1%/2%, mainly reflecting the slowdown in 5G consumer service revenue.</li>
<li>Net profit forecasts for 2026/27 have been lowered by 2%/2%.</li>
<li>Tax rate assumptions have been increased by 0.2–0.3 percentage points, reflecting the impact of the VAT increase.</li>
</ul>
<hr/>
<h3><strong>3. Positive Factors: Continuous Expansion of Innovative Businesses</strong></h3>
<ul>
<li>Growth Engine: Innovative businesses such as China Mobile Cloud and ICT projects are expected to continue growing.</li>
<li>Drivers: Expansion of ultra-large-scale computing capabilities and support from AI ecosystem coverage (models and applications).</li>
<li>Long-term Opportunities: Value-added services will help enhance long-term ARPU, and the 6G cycle will support future growth.</li>
</ul>
<hr/>
<h3><strong>4. Summary of Financial Forecasts (Updated)</strong></h3>
<hr/>
<h3><strong>5. Valuation Method and Target Price Derivation</strong></h3>
<ul>
<li>Method: Based on the 2026 forecast EV/EBITDA.</li>
<li>Target multiple: 4.0 times (previously 4.9 times), referencing the correlation between industry EV/EBITDA and EBITDA growth, and in line with the company's historical trading range since 2017.</li>
<li>Calculation result: Combining the revised EBITDA forecast with the target multiple yields a target price of HKD 88.</li>
</ul>
<hr/>
<h3><strong>6. Risk Warning</strong></h3>
<ul>
<li>Upside risks:</li>
</ul>
<ol>
<li>5G development and monetization exceed expectations.</li>
<li>Cloud/IDC revenue growth is stronger than expected.</li>
</ol>
<ul>
<li>Downside risks:</li>
</ul>
<ol>
<li>Increased industry competition suppresses ARPU.</li>
<li>Cloud product expansion is slower than expected.</li>
<li>Tax burden pressure is higher than expected.</li>
</ol>
<hr/>
<h3><strong>7. Investment View Summary</strong></h3>
<ul>
<li>Neutral rating: Short-term 5G growth slowdown and tax increases pose pressure, but innovative businesses remain a long-term growth driver.</li>
<li>Conditions for a more aggressive stance: If the following occur, Goldman Sachs may adopt a more positive outlook:</li>
</ul>
<ol>
<li>Improvement in 5G user spending.</li>
<li>Innovative business growth exceeds expectations.</li>
<li>Progress on 6G services is faster than expected.</li>
</ol>
<h3><img src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-103545-300x168.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-103545-300x168.png"/></h3>
<h3><strong>1. Meituan Acquires Dingdong Maicai's China Business</strong></h3>
<ul>
<li>Transaction amount: Initial consideration of USD 717 million, the target group must maintain net cash of no less than USD 150 million.</li>
<li>Payment method: Cash payment in two installments (90% paid at closing, 10% paid after Dingdong completes relevant tax settlements).</li>
<li>Target company's financial performance:
<ul>
<li>Net loss of RMB 38.88 million in 2023</li>
<li>Net profit of RMB 372.75 million in 2024</li>
<li>Net profit of RMB 215.73 million in the first 9 months of 2025</li>
<li>EBITDA for the past 12 months was RMB 392 million</li>
</ul>
</li>
<li>Transaction progress: Pending regulatory approval, after which Dingdong's China business will become a wholly-owned subsidiary of Meituan.</li>
</ul>
<hr/>
<h3><strong>2. Citigroup's View</strong></h3>
<ul>
<li>Strategic significance:</li>
</ul>
<ol>
<li>Expands Meituan's coverage of front warehouses, especially in East China, complementing &#34;Ella Supermarket.&#34;</li>
<li>Strengthen the supply chain capabilities of fresh produce and private label brands.</li>
<li>Expand consumption scenarios, extending from takeout/dine-in to home cooking.</li>
</ol>
<ul>
<li>Valuation: The transaction price is approximately 10 times Dingdong's TTM EBITDA, comparable to the peer range of 8-12 times.</li>
<li>Competitive environment: The fresh produce and grocery market remains fragmented and highly competitive, with Meituan still facing challenges in its core local business and resource investments for overseas expansion.</li>
<li>Rating and target price: Maintain Neutral / High Risk, target price HKD 115, expected stock price return of 22.6%.</li>
</ul>
<hr/>
<h3><strong>III. Meituan SOTP (Sum of the Parts) Valuation Analysis</strong></h3>
<hr/>
<h3><strong>IV. Risk Warning</strong></h3>
<ul>
<li>Downside risks:</li>
</ul>
<ol>
<li>Ongoing disorderly competition in the takeout business, UE fails to achieve profitability.</li>
<li>Intensified competition in the dine-in and hotel business, profit under pressure.</li>
<li>New business losses exceed expectations.</li>
<li>Rider costs higher than expected.</li>
<li>Deteriorating macro environment and changes in consumer behavior.</li>
</ol>
<ul>
<li>Upside risks:</li>
</ul>
<ol>
<li>Competition becomes more rational.</li>
<li>Regulatory intervention curbs competition.</li>
<li>Profitability recovery in the takeout business is faster than expected.</li>
</ol>
<p><img src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-110553-300x168.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://img02.tastymoney.hk/tm/2026/02/%E8%9E%A2%E5%B9%95%E6%93%B7%E5%8F%96%E7%95%AB%E9%9D%A2-2026-02-09-110553-300x168.png"/></p>
<h3><strong>I. Core Viewpoint: Lack of Strong Catalysts in the Short Term</strong></h3>
<ul>
<li>Rating and target price: Hold, target price HKD 22.00 (potential return of approximately -3% compared to the current stock price).</li>
<li>Valuation: The valuation is not high, corresponding to an adjusted P/E ratio of about 12 times for 2026, close to one standard deviation below the historical average.</li>
<li>Core logic: The upside and downside risks of the company's fundamentals and competitive landscape are roughly balanced, with a lack of strong catalysts in the short term.</li>
</ul>
<hr/>
<h3><strong>II. Key Analysis Points</strong></h3>
<h4><strong>1. Limited Negative Narrative Risk for OTAs</strong></h4>
<ul>
<li>The market is concerned that &#34;AI agents&#34; may replace trading platforms including OTAs, but analysts believe the impact in the Chinese market is limited for the following reasons:
<ul>
<li>Chinese OTAs are primarily mobile-based and have stronger control over the supply chain (especially with low hotel chain rates).</li>
<li>Tongcheng is developing its own hotel management business, reducing the risk of being bypassed by AI</li>
</ul>
</li>
</ul>
<h4><strong>2. Hotel management business will become the main growth driver in 2026</strong></h4>
<ul>
<li>It is expected that the growth rate of accommodation and transportation revenue will slow to 10%, while other revenues (mainly from hotel management) could grow by 40%.</li>
<li>Main drivers:
<ul>
<li>Integration of Wanda's hotel management business.</li>
<li>Expansion of Wanda's hotel locations may accelerate, accompanied by incentives for franchisees and enhanced member benefits.</li>
</ul>
</li>
</ul>
<h4><strong>3. Tongcheng is unlikely to benefit from Ctrip's antitrust investigation</strong></h4>
<ul>
<li>Both share a hotel inventory pool in the domestic market, with approximately 60-70% of Tongcheng's hotel transaction volume coming from Ctrip's inventory.</li>
<li>If Ctrip concedes on commissions or exclusivity, Tongcheng will not benefit and may instead face intensified competition in the OTA market.</li>
</ul>
<h4><strong>4. Downgraded profit expectations, but target price remains unchanged</strong></h4>
<ul>
<li>Slightly downgraded revenue and profit expectations for 2026-27, mainly due to:
<ul>
<li>Front-loaded investment in hotel management business.</li>
<li>More conservative expectations for reductions in sales and marketing expenses compared to previous forecasts.</li>
</ul>
</li>
<li>Target price maintained at HKD 22, based on a 12x adjusted price-to-earnings ratio for 2026.</li>
</ul>
<hr/>
<h3><strong>3. Financial forecasts and valuation</strong></h3>
<ul>
<li>Target price calculation: Based on a 12x adjusted price-to-earnings ratio for 2026, corresponding to an adjusted earnings per share of HKD 1.84.</li>
</ul>
<hr/>
<h3><strong>4. Risk warnings</strong></h3>
<ul>
<li>Downside risks:
<ul>
<li>Intensified competition in the OTA market.</li>
<li>Weak macro consumption environment.</li>
<li>Exceeding expectations in investment for hotel management business expansion.</li>
</ul>
</li>
<li>Upside catalysts:
<ul>
<li>Conclusion of Ctrip's antitrust investigation, improving market sentiment.</li>
<li>A clearer and more sustainable path for the company's profit margin expansion</li>
</ul>
</li>
</ul>

600941

00941

<p>Goldman Sachs downgraded China Mobile (941) to "Neutral," lowering the target price from HKD 105 to HKD 88, with a potential upside of about 9.7%. The main reasons include a slowdown in the growth of 5G base stations, with only 8,000 new base stations expected to be added in 2025, a year-on-year decrease of 87%; the increase in the value-added tax rate to 9% will impact revenue and profit margins; and earnings forecasts have been revised down, with revenue and net profit for 2026/27 lowered by 1%/2% and 2%/2%, respectively. Nevertheless, innovative businesses such as cloud computing and ICT projects will continue to grow, and long-term ARPU is expected to improve</p>

Tasty Money

China Mobile

CHINA MOBILE

Goldman Sachs: Concerned that China Mobile (941) 5G base station growth slowdown will affect user and ARPU growth, overall business growth has also slowed, lowering target price and rating to "Neutral" - 20260209