China Mobile Ltd (中國移動通信), the world’s biggest wireless carrier by users, is seeking to list its shares domestically to take advantage of an easing regulatory environment, chairman Wang Jianzhou (王建宙) said.
“We have been encouraged by recent regulatory developments,” Wang told reporters yesterday at China Mobile’s shareholder meeting in Hong Kong. The company wants a listing in China “as soon as possible,” he said.
China Mobile, the third-biggest stock listed in Hong Kong, rose 2.6 percent to close at HK$74.15, compared with a 3.1 percent gain on the Hang Seng Index. The company’s market value of HK$1.49 trillion (US$192 billion) ranks behind only PetroChina Co (中石油) and Industrial & Commercial Bank of China Ltd (中國工商銀行) among stocks listed in the city.
China Mobile prefers to offer Chinese depositary receipts in China, rather than so-called A-shares, in order to minimize compliance work for the listing, Wang said. The phone carrier will wait for regulators to issue rules before filing a listing application, he said.
“As the proposed listing involves only depositary receipts, there won’t be a dilution on earnings per share,” said Kevin Tam (譚思晉), who rates China Mobile shares “accumulate” at Everbright Securities (光大證券) in Hong Kong.
China Mobile now has “a good opportunity” to buy overseas phone carriers after prices declined, making assets “inexpensive,” Wang said. The Chinese company will be “rational” in acquisitions, he said.
The company is boosting its search for overseas investments as the economic slowdown and rising domestic competition slowed first-quarter profit growth to the weakest in five years.
First-quarter net income gained 5.2 percent to 25.2 billion yuan (US$3.7 billion), the slowest since 2004, China Mobile reported last month. The company is increasing handset subsidies and targeting lower-spending customers in rural areas to maintain its lead over smaller rivals China Telecom Corp (中國電信) and China Unicom (Hong Kong) Ltd (中國聯通).
China Mobile last month announced a plan to buy a 12 percent stake in Taiwan’s Far EasTone Telecommunications Co (遠傳電信). In 2006, China Mobile bought China Resources Peoples Telephone Co (華潤萬眾) in Hong Kong.
The proposed Far EasTone acquisition faces regulatory obstacles as Taiwan’s telecommunications sector isn’t open to Chinese investors. Still, Wang said China Mobile is “optimistic” the transaction will be completed.
Under the plan, China Mobile will subscribe to new Far EasTone shares equivalent to a 12 percent stake. Wang said China Mobile doesn’t intend to purchase Far EasTone shares on the open market.
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