China Mobile, which is considering an A-share listing after A delisting in the US, opened the day steadily higher in Hong Kong, up 3.36% at HK $53.80 per share.
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On March 9, China Telecom announced that it planned to apply for listing on the main board of the Shanghai Stock Exchange. If China Mobile “return to A”, the three major domestic operators will be expected to gather A shares.
Fu Liang, A telecom expert, told Time Finance that China Mobile’s A-share listing had been in the works for many years and it chose Hong Kong because of its large size while the domestic market was still in its infancy. At present, China Mobile is delisted from the United States. For its development, A+H dual listing is A better financing strategy.
China Mobile returned to A’s expectation
Citing people familiar with the matter, Bloomberg said China Mobile is discussing A potential A-share offering with advisers to seek new sources of financing to develop its 5G network. The discussions are at an early stage and no decision has been made on the size and timing of the offering.
In January, the New York Stock Exchange delisted the deposited-trust securities of China Mobile, China Unicom and China Telecom in accordance with an executive order signed by former U.S. President Donald Trump banning investments in Chinese military-related companies. In March 9, China Telecom announced the “return to A” after, there are shareholders in the stock bar comment: “China Mobile back to A is imperative!”
According to the data released by China Mobile, since the establishment of China Mobile in 2000, its assets have increased from 320 billion yuan to 2 trillion yuan, and its annual operating income has increased from 120 billion yuan to more than 770 billion yuan. By the end of 2020, the number of users of China Mobile’s 5G plans has reached 165 million.
On March 15, China Mobile announced that it would report its annual results on March 25. In 2020, the net profit of the company is expected to reach 105.151 billion yuan to 112.492 billion yuan, and the annual operating income is expected to reach 743.942 billion yuan to 775.014 billion yuan, according to the forecast of 16 securities brokerages.
According to data released by China Mobile in January this year, it has opened more than 390,000 5G base stations, developed more than 165 million 5G service customers, and built the world’s largest 5G network. Brokers expect China Mobile to invest cautiously in 5G base stations this year, while its operating guidance, capital expenditure on 5G investment, network resource sharing and cooperation with China Radio and Television will be the focus of attention.
Compared with China Telecom, China Mobile is relatively abundant in capital and does not have A strong demand for financing. However, some analysts believe that after delisting in the United States, China Mobile will still have the impetus to return to A-share market. 5G construction and business growth dividend period is coming, return to A-shares can obtain more funds, 5G construction, product development and strategic transformation to provide more help.
In addition, Fu Liang believes that returning to A-shares can also increase the frequency of information exposure of China Mobile, which is more conducive to the partners and users of China Mobile’s supply chain and industrial chain to understand the development of the company and share the development dividend of China Mobile together. Correspondingly, the three major operators gathered in A shares, will also promote the further benign development of the Chinese stock market.