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China Mobile readies $8bn Shanghai listing after NYSE exit
China Mobile plans to list in Shanghai after being forced to delist from the New York Stock Exchange. Photo: Reuters.

(AF) China Mobile’s board has approved plans for a potential US$8.4 billion listing in Shanghai, weeks after the company lost its appeal against a New York Stock Exchange (NYSE) delisting decision in line with US investment restrictions imposed by former US president Donald Trump.

The mainland’s largest wireless carrier said on Monday it plans to sell 964.8 million shares, or 4.5% of its total issued shares, publicly on the Shanghai Stock Exchange at an undisclosed price.

The company said, in a filing to the Hong Kong Stock Exchange, that it applied for an RMB share sale in order to grasp a window of opportunity to develop an information services market and to “cultivate a digitalised and intelligent ecosystem with new vitality”.

Hong Kong-listed shares of China’s most valuable telco rose 2.66% on Tuesday and closed at HK$50.1. China Mobile now has a market capitalisation of US$133 billion.

If China Mobile prices its RMB shares at its 2020 book value, the company can raise 54 billion yuan ($8.4 billion) from the Shanghai listing, JP Morgan Chase & Co said. The bank has maintained a “buy” rating for China Mobile and given it a pricing target of HK$65.

China Mobile, China Telecom and China Unicom said earlier this month they expect the NYSE to notify regulators of their delistings after an unsuccessful appeal by the companies to counter the move.

The delistings stem from a Trump-era order to ban investment in Chinese companies with alleged military backing.

While the three state-owned carriers lost their appeals in the Biden-era, Chinese companies from the private sector have had better luck.

Xiaomi, Luokung Tech avoid delisting

Last week, the US Department of Defense (DOD) agreed to remove Chinese smartphone maker Xiaomi Corp from its list of “Communist Chinese Military Companies” (CCMC). Nasdaq also rescinded its decision to delist Luokung Technology, a Chinese mapping technology company.

In March, China Telecom announced its plans to raise roughly $4.1 billion by selling up to 12.09 billion shares – 13% of the company’s total issued share capital – on the Shanghai Stock Exchange.

China Mobile said it aims to use the proceeds from the offering to develop its premium 5G networks and infrastructure for cloud resources, among others.

It may also expand its offering by 15% by exercising an over-allotment “greenshoe” option, it said in a statement.

China Mobile’s revenue reached 198.4 billion yuan ($30.84 billion) in the first quarter of 2021, up 9.5% year-on-year.

By the end of March, mobile subscribers of the company came in at 940 million, with 5G network subscribers reaching 92.76 million, and 4G at 788 million.

All three carriers are listed in Hong Kong, and China Unicom is also listed in Shanghai.

ALSO SEE:

US to drop Xiaomi from government blacklist

Blacklisted China Telecom moves to raise cash in Shanghai

Iris Hong

Iris Hong is a senior reporter for the China desk, and has special interests in fintech, e-commerce, AI, and electric vehicles. She began her career in 2006 and worked for Interfax News Agency and for PayPal before joining Asia Financial in July 2020. You can reach out to Iris on Twitter at @Iris23360981

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