In a recently issued research report, UBS downgraded China Mobile (00941), reducing its target price from HK$100 to HK$81 and revising its rating from 'Buy' to 'Neutral'. The report highlighted that the stock's upside potential is constrained, with a dearth of catalysts to drive a revaluation. The rationale behind the downgrade encompasses several factors. Firstly, internet behemoths are aggressively capturing cloud - market share, posing a threat. Secondly, traditional telecom businesses are under significant pressure. Moreover, when considering the anticipated dividend yield and the average annual compound growth rate of earnings for 2026, it appears challenging for China Mobile to deliver excess returns. UBS projects that China Mobile's net profit will experience a modest growth of 2% to 3% between 2025 and 2026. During this period, the dividend payout ratios are expected to reach 74.5% and 76% respectively. In 2026, capital expenditures are anticipated to decline by 2.3%, with a strategic shift towards investing in computing equipment. Although China Mobile's expected dividend yield for 2026 surpasses that of its peers in the Asia - Pacific region, its average annual compound growth rate of earnings from 2025 to 2028 lags behind its counterparts. Additionally, the market's expectation of stable dividends has already been factored into the current stock price.