22 Dec 2021

(Yicai Global) Dec. 21 — China Mobile, the world’s biggest telecoms carrier, could raise as much as CNY56 billion (USD8.8 billion) from its upcoming Shanghai listing, making it one of the largest public share sales in the Chinese mainland in a decade.

China Mobile is selling 845.7 million shares at CNY57.58 (USD9.04) each to raise about CNY48.7 billion (USD7.64 billion), the Beijing-based company said yesterday.

A so-called green shoe option could take that to CNY56 billion, surpassing the CNY54 billion that smaller rival China Telecom raised in August. It would also be more than the roughly USD22 billion that Agricultural Bank of China secured in Shanghai and Hong Kong floatations in 2010.

China Mobile has tried its best to list in the mainland after China Telecom, though this year is not a good time to go public, especially for large-caps such as these two firms which are even in the same business, according to telecoms industry analyst Fu Liang.

The three Chinese state telecoms firms — China Mobile, China Telecom, and China Unicom — were delisted from the New York Stock Exchange due to a US investment ban. China Mobile exited the bourse in January.

According to the company’s prospectus, the proceeds of the Shanghai listing, which was approved on Nov. 4, will be used for fifth-generation boutique network projects, new infrastructure for cloud resources, gigabit smart home projects, research and development of new generation information technology and digital intelligent ecology, and to build high-quality fifth-generation networks.

China Telecom fell below its issue price a month after its mainland debut, which has led to concerns about China Mobile’s share sale. China Telecom gained 35 percent in its Aug. 20 debut, but fell by the exchange-imposed limit in the following two trading days and slumped below its initial price on Sept. 24.

China Mobile is not short of funds, Fu said, adding that the purpose of the Shanghai listing is not to raise money, but to share the company’s development benefits with users, while a mainland offering will also help Chinese investors better understand its business.

China Mobile’s Hong Kong-listed shares [HKG: 0941] finished little changed today, edging just 0.1 percent lower to HKD46.30 (USD5.94).

Editor: Tom Litting