On the second day of the market opening in 2022, China Telecom Corporation Limited(601728) , A-Shares ushered in a super big Mac again.
On the morning of January 5, after 24 years, China Mobile (600941. SH) officially returned to A-Shares and was listed on the main board of Shanghai Stock Exchange. At the Shanghai Stock Exchange, Yang Jie, chairman of China Mobile Group, and Dong Xin, managing director of China Mobile Group, jointly sounded the bell, ringing this historic moment.
China Mobile’s return to A-Shares also broke the nearly ten-year fundraising record of A-Shares set by China Telecom Corporation Limited(601728) last August.
On October 23, 1997, China Mobile was listed on the Hong Kong stock exchange, setting a precedent for central enterprises. Today, China Mobile landed in A-Shares and became the “first share of red chip companies returning to the A-share main board”, which is another milestone in the development of China Mobile.
It is worth mentioning that with the listing of China Mobile on the Shanghai Stock Exchange, the three operators have officially “joined hands” in a shares.
As soon as the first day of listing opened, China Mobile’s share price opened 9.41% higher to 63 yuan, with a considerable performance. However, since then, its share price has fluctuated sharply and the increase has narrowed. As of today’s close, China Mobile quoted 57.88 yuan, an increase narrowed to 0.52%.
According to Xiaobian’s calculation, the cost price of the first lot (1000 shares) is 575800 yuan. If you sell it at the highest price of 63.58 yuan / share today (the 5th), you can earn 6000 yuan, for a saved user, it is enough to pay the call fee for six years. if calculated according to today’s closing price of 57.88 yuan / share, you can only earn 300 yuan.
At the same time, China Mobile Hong Kong stocks also performed well, rising 3.85% to HK $49.85 as of press time. It should be noted that on the same day, the Hang Seng technology index fell by more than 4% at the opening, 4.28% as of press time, and the Hang Seng Index fell by 1.29%.
red chip company returns the first share of a
raised 56 billion yuan, which is the largest IPO of A-Shares in recent ten years
On October 22 and 23, 1997, China Mobile was listed in US stocks and Hong Kong stocks respectively. After more than 24 years, China Mobile returned to the mainland capital market.
According to the 21st Century Business Herald, at the listing site of China Mobile, Yang Jie, chairman and party secretary of China Mobile, said that on October 23, 1997, China Mobile was listed on the Hong Kong stock exchange, becoming the first overseas listing share of a central enterprise. Now, China Mobile’s landing in A-Shares has become the first share for red chip companies to return to a shares.
The reporter of the daily economic news learned that Yang Jie also said that China Mobile will make persistent efforts, move forward bravely, strive to create a new situation of high-quality development, and become an excellent listed company with long-term investment value in the A-share market.
He said that a new round of scientific and technological revolution and industrial reform have been further promoted, the economic and social transformation of digital intelligence has been accelerated, and there is a broad blue ocean of information services.
On the day of listing, China Mobile’s opening price was 63 yuan, an increase of more than 9% compared with the issue price of 57.58 yuan, and then the increase fell. As of today’s close, China Mobile’s share price was 57.88 yuan, narrowed to 0.52%, with a turnover of more than 15.2 billion yuan and a total market value of 1.23 trillion yuan.
China Mobile’s return to A-Shares also broke the nearly ten-year fundraising record of A-Shares set by China Telecom Corporation Limited(601728) last August.
According to the prospectus, the issuance of China Mobile is carried out by a combination of strategic placement, offline issuance and online issuance. At the same time, the company also introduces the green shoe mechanism, through which the Underwriters can adjust the financing scale according to the market conditions within 30 days from the date of stock listing, so as to stabilize the stock price trend after the listing of large cap stocks.
Referring to the previous listing of China Telecom Corporation Limited(601728) , the first day increased by 34.88%. The “green shoe mechanism” also played a role in protecting the market, but then adjusted all the way. At present, the stock price is still below the issue price.
According to the issuance announcement, China Mobile plans to publicly issue no more than 845.7 million a shares. If it exercises the over allotment option, that is, the “green shoe mechanism”, will over sell no more than 972.555 million shares. based on this calculation, if the over allotment is exercised in full, China Mobile’s IPO will raise nearly 56 billion yuan, exceeding the previous record of 53.727 billion yuan set by China Telecom Corporation Limited(601728) , becoming the largest A-share IPO in recent 10 years.
However, the current capital market sentiment towards China Mobile is not clear. according to the issuance results disclosed by the company, the total amount of abandonment by online investors and offline investors reached 756 million yuan. set a new record for the maximum amount of a shares. The first signature on the main board of Shanghai Stock Exchange is 1000 shares, and all the unpaid subscription shares are underwritten by the joint lead underwriters.
According to the 21st Century Business Herald, pan Helin, member of the information and communication economy expert committee of the Ministry of industry and information technology and executive director of the Digital Economy Research Institute of Central South University of economics and law, pointed out that to a certain extent, considering the limited liquidity of a shares, large-scale financing is completely dominated by the market and it is difficult to quickly push up the stock price. On the other hand, the current stock price of China Mobile’s Hong Kong shares is low. Although it has launched a repurchase plan, the repurchase plan has not promoted the valuation of Hong Kong shares due to the volume of issuance in the Hong Kong stock market. “So it is possible for China Mobile to break in the next few days. But China Mobile will not fall too deep, at least not lower than the current valuation of Hong Kong stocks.”
Shenwan Hongyuan Group Co.Ltd(000166) believes that the listing breaking risk of China Mobile is less than China Telecom Corporation Limited(601728) . Under the escort of “green shoes”, China Telecom Corporation Limited(601728) did not break in the first month of listing, but it broke for the first time in the day after the expiration of the green shoe mechanism, and the stock price continued to fluctuate at a low level thereafter. Considering that China Mobile’s expected issuance PE based on the net fund-raising of the application draft is about 12 times, 40% lower than the initial PE of China Telecom Corporation Limited(601728) , and China Mobile ranks first among the three major operators, it is expected that its post listing break risk is less than China Telecom Corporation Limited(601728) .
In addition, in this IPO, China Mobile also introduced 19 strategic investors, including national investment funds, large central enterprises, insurance funds, Internet companies and international sovereign funds. The lineup is luxurious, with a total subscription amount of up to 24.3 billion yuan.
Specifically, in this strategic placement:
National investment funds such as social security fund, national transfer fund, Guoxin Investment, integrated circuit fund, China Africa Development Fund and Chinese investment fund were allocated 141 million shares, accounting for 33.33%;
Large central enterprises such as state grid, national energy group, CETC, FAW, SDIC and China Energy Engineering Corporation Limited(601868) were allocated 137 million shares, accounting for 32.51%.
China Life Insurance Company Limited(601628) , The People’S Insurance Company (Group) Of China Limited(601319) , Taiping Life Insurance, China Post life insurance and other insurance assets were allocated 113 million shares, accounting for 26.75%.
In addition, Jingdong, Zhengda Group, Brunei Investment Bureau and other domestic and foreign enterprises and international sovereign funds also participated in the subscription.
earn 300 million a day and plan to invest 100 billion in 5g network construction
As a leading telecom operator, China Mobile’s performance is quite bright. On the eve of listing, China Mobile also announced the performance forecast for 2021.
According to the announcement, China Mobile expects the operating revenue to be about 844.877 billion yuan to 852.558 billion yuan in 2021, with a year-on-year increase of about 10% to 11%; The net profit attributable to the shareholders of the parent company was about 114.307 billion yuan to 116.464 billion yuan, with a year-on-year increase of about 6% to 8%; After deducting non recurring profits and losses, the net profit attributable to shareholders of the parent company was about 107.285 billion yuan to 109.328 billion yuan, with a year-on-year increase of about 5% to 7%.
it is calculated that China Mobile will earn about 313 million yuan a day in 2021.
As the first of China’s three leading communication service providers, China Mobile, founded in 1997, is also a leading global communication and information service enterprise, mainly providing a full range of communication and information services for individuals, families, government enterprises and emerging markets. Among them, the personal market mainly includes personal wireless internet access, voice, short MMS and other personal information services; The home market mainly includes home broadband, “magic Baihe”, home security, intelligent networking and other services; The government enterprise market mainly includes ICT, group special line, Internet of things, group short MMS and other services; Emerging markets focus on areas such as international business, digital content and mobile payment.
According to the prospectus, from 2018 to 2020 and the first half of 2021 (hereinafter referred to as the “reporting period”), China Mobile achieved operating revenue of 736.819 billion yuan, 745.917 billion yuan, 768.07 billion yuan and 443.647 billion yuan, with corresponding net profits of 116.869 billion yuan, 106.475 billion yuan, 108.134 billion yuan and 59.186 billion yuan respectively.
In terms of revenue composition, personal market revenue is the basic market of China Mobile. During the reporting period, it generated revenue of 508.444 billion yuan, 490.748 billion yuan, 476.948 billion yuan and 255.545 billion yuan respectively, accounting for 75.78%, 72.77%, 68.56% and 64.99% of the company’s main business revenue in each period; Followed by household market income, government enterprise market income and emerging market income.
According to the previous statement of China Mobile, the return of A-Shares this time will effectively promote the all-round development of individuals, families, government enterprises and emerging markets, comprehensively promote the transformation of digital intelligence, build a new digital intelligence ecology of open cooperation, give users the opportunity to share the company’s growth benefits and help the integrated development of digital economy and real economy.
According to the plan, China Mobile will focus on “new infrastructure, new elements and new kinetic energy” to promote the transformation of digital intelligence and build a new digital intelligence ecology, which will be used for 5g boutique network construction projects, new infrastructure construction projects of cloud resources, Gigabit smart home construction projects, smart middle platform construction projects, as well as new generation information technology R & D and digital intelligence ecology construction projects. According to the prospectus disclosed in August, the total investment amount of these projects will reach 1569 billion yuan, and the proposed fund-raising amount will be 56 billion yuan.
From the purpose of the company’s fund-raising amount, 5g network construction will become the highlight of fund-raising and investment. According to the prospectus, the planned total investment of China Mobile 5g boutique network construction project is 98.3 billion yuan, of which the planned investment in equipment cost is 81.6 billion yuan, accounting for more than 80%. The company mentioned in the prospectus for the first disclosure of A-share listing that the amount of raised funds to be invested in the project reached 28 billion yuan, accounting for 50% of the total raised funds.
in fact, 5g network construction is also the focus of China Telecom Corporation Limited(601728) Huia’s fund-raising. in August 2021, China Telecom Corporation Limited(601728) was listed as a shares. The company plans to invest 21.4 billion yuan in 5g industrial Internet construction projects in the next three years, of which 11.4 billion yuan comes from the initial fund-raising. As for the necessity of the raised investment project, China Telecom Corporation Limited(601728) said that it mainly focused on the investment and construction of wireless network, core network, MEC, bearer network and other fields related to 5g industrial Internet, “With the continuous promotion of the new infrastructure strategy, the demand of Qianxing Baiye for realizing transformation and upgrading by using 5g technology is becoming more and more urgent. 2021-2023 is the introduction period of 5g industry application. As an important practice of cloud network integration, it will help the company achieve a leading position in the field of industrial Internet and promote the company’s strategic transformation”.
economic account behind 5g investment
From the perspective of the fund-raising projects in the prospectus, half of the fund-raising amount – 28 billion yuan will be invested in the 5g boutique network construction project.
This is part of the world’s largest and most advanced 5g independent networking network. The latest data show that China has built more than 1.15 million 5g base stations, accounting for more than 70% of the world; 5g end users reached 450 million, accounting for more than 80% of the world; 5g network coverage has been realized in all prefecture level city districts, more than 97% of county districts and 40% of township towns and townships in China.
For China Mobile, investing in 5g is the key to continuously improve user experience and promote user consumption in the future. “The average monthly income of 5g users is 88.9 yuan, an increase of 10.0% over 4G customers.” The semi annual report shows that as of the first half of 2021, China Mobile’s 5g network customers have reached 127 million.
“With the improvement of living standards, users’ demand for information such as entertainment, health, education and safety will continue to grow, which will drive the upgrading demand of network quality and speed.” Huatai Securities Co.Ltd(601688) the research report predicts that the construction of smart home will bring more opportunities for operators to create value in the 5g industrial chain and further help operators open new market space.
In addition to the C-end consumer market, the broader application scenario of 5g is the b-end enterprise market. Based on 5g reliable and high-quality basic network and rich and diverse value-added functions, China Mobile can provide enterprise users with more convenient and flexible customized services represented by industrial Internet, so as to achieve higher added value.
What is more important is the spillover effect of 5g network on industrial development, economic growth and people’s good life, which is also an important reason why 5g is called a new infrastructure.
In recent years, 5g construction has not only set off a new wave of mobile communication network investment, promoted the continuous innovation of new infrastructure construction and the transformation and upgrading of user information consumption, but also opened a new space for economic and social innovation and development.
In the industrial Internet, 5g enables traditional industries to continuously realize digital transformation; Combined with AI, 5g helps to realize high-precision real-time detection and flexible production; Focusing on the construction of smart city, 5g provides new possibilities for social governance and public service reform.
According to the prediction of the white paper on China’s 5g development and economic and social impact (2020) released by China Institute of information and communications, the economic and social impact potential of 5g business in the past year has been preliminarily released. It is expected that in 2020, 5g will directly drive the total economic output of 810.9 billion yuan, directly drive the economic added value of 189.7 billion yuan, indirectly drive the total output of about 2.1 trillion yuan and indirectly drive the economic added value of 760.6 billion yuan.
(Daily Economic News)
