Daily Investment Strategy
Recommended Stock：China Mobile（941）
China Mobile benefits from strong free cash flow (FCF). Since 2020, China Telecom and China Unicom’s FCF growth has been flat or slightly declining, while China Mobile saw significant growth after 2022. With stable capital expenditures, the company is well-positioned to distribute dividends. Its FCF is expected to remain superior to peers in 2024, aided by effective capital expenditure control. Since 2023, China Mobile's capex-to-operating cash flow ratio has been lower than its peers, and the market expects further improvement next year. Target price: $80.9.
Market awaits CPI data
The focus this week is U.S. CPI data due to be released on Wednesday, which may influence the Federal Reserve's FOMC meeting later this month. Overall CPI is expected to rise slightly to 2.7% from 2.6% a year earlier, while core CPI, which excludes volatile food and energy items, is expected to remain at 3.3%. Although inflation has declined steadily through early 2024, it has become sticky in recent months amid the U.S. economic recovery, raising some uncertainty about the outlook for interest rates.
Hong Kong Stock Connect had a net outflow of HK10.3bn on Tuesday of which Alibaba (9988) had the largest net inflow, reaching HK$0.53bn; followed by China Mobile (941). Tracker Fund (2800) recorded the largest net outflow at 6.9bn, followed by HSCEI ETF (2828).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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