China Mobile will hold a share offering in Shanghai a year after sanctions imposed by former US president Donald Trump forced the world’s largest telecoms company by subscribers to delist in New York.
China Mobile will offer up to 845.7m A-class shares representing a 3.97 per cent stake in the company, according to a filing on the Hong Kong stock exchange, where it retains an existing listing. The company added that it would conduct price consultations for its offering in China on Thursday and Friday.
The Shanghai listing, which is expected to raise around $5bn based on the stock’s Tuesday closing price in Hong Kong, comes as the Biden administration takes an increasingly hawkish stance towards China. Washington blacklisted Chinese artificial intelligence company SenseTime last week as part of broader human rights sanctions on people and entities linked to China, Myanmar, North Korea and Bangladesh.
Stephen Leung, head of research at Crosby Securities in Hong Kong, said that China Mobile’s decision to list in mainland China was mainly “symbolic”.
“I think it’s more about a return to the homeland stock market more than anything else,” said Leung, adding that a similar move by China Telecom, one of China’s state-run telecoms groups, in August had done little to improve the stock’s valuation in Hong Kong or China.
China Mobile was delisted from the New York Stock Exchange in January to comply with sanctions initially issued in the US last year against investing in Chinese companies with alleged links to the country’s military.
China Mobile and two other Chinese telecoms companies that were also delisted appealed against the measure to the NYSE, which was responsible for complying with the order. But the NYSE rejected that appeal in May.
In June, the Biden administration issued a new order prohibiting investment in 59 Chinese companies, including China Mobile, that US officials said had a stronger legal footing than the earlier measure.
With a total of 957m monthly mobile customers in October, China Mobile is the world’s largest telecoms company by total subscribers. It said it would invest the proceeds from the listing in developing 5G networks, cloud resource infrastructure, faster broadband and the development of next-generation technologies.
The company’s current cash, financial assets and bank deposits totalled about Rmb505bn ($79.3bn) at the end of June.
Dan Baker, senior equity analyst at Morningstar, said that China Mobile did not need the money from a secondary listing, but that listing in China was an “obvious choice” given the controversy over the stock’s forced delisting in New York.
“There may be a little bit of nationalistic buying,” he said.
The listing will be sponsored by China International Capital Corporation and Citic Securities, it will be underwritten by China Securities, Huatai United Securities, Bank of China and China Merchants Securities.
