China Mobile's Shanghai-listed A-shares began the week trading slightly below the 95-yuan level, following a modest decline in the previous session. The stock closed Friday at 95.11 yuan, down 0.26%.
Tax Change Pressures Telecom Sector
A recent regulatory shift has increased the value-added tax rate on core telecommunications services, including mobile data, messaging, and broadband access, from 6% to 9%. China Mobile disclosed that this adjustment, effective January 1, will negatively affect both its revenue and profitability, though the exact magnitude remains unspecified. Analysts note that these services could constitute a significant portion of operator revenues this year.
The tax change impacts the entire industry, with peers China Unicom and China Telecom also issuing statements on the matter. Competitive market conditions may limit carriers' ability to fully pass the increased cost to consumers, potentially squeezing margins.
Macro and Market Catalysts Ahead
Investor focus now turns to key upcoming events. China's National Bureau of Statistics is scheduled to release Consumer and Producer Price Index data on February 11, which could influence broader market sentiment and policy expectations.
Furthermore, China Mobile has set its next earnings release for March 27. Market participants will scrutinize the report for detailed figures on the VAT impact and any updates on the company's dividend policy. The upcoming extended market closure for the Spring Festival holiday, from February 15 to 23, may also amplify pre-holiday price movements due to reduced liquidity.
The broader Shanghai market remained cautious, with the Composite Index edging down 0.25% to 4,066 on Friday, partly reflecting spillover from a global technology sector sell-off.
