China Telecom Corporation Limited(601728) just announced that it would take measures to stabilize the stock price, and China Mobile announced the plan to increase its holdings.
on January 23, China Mobile disclosed that the actual controller, China Mobile Group, spent 710 million yuan to increase its holdings of 12.322 million A-Shares of the company on January 21. on that day, the total transaction volume of the stock was 191800, with a total transaction amount of 1.105 billion yuan. According to the rough calculation of the data disclosed in the announcement, the average price of China Mobile Group’s additional A shares was 57.63 yuan / share. On January 21, the closing price of China Mobile’s A-Shares was 57.58 yuan / share. Coincidentally, 57.58 yuan is also the issue price per share of China Mobile A shares.
China Mobile also announced that China Mobile Group plans to choose an opportunity to increase its A-share holdings from January 21 to December 31 this year, with a cumulative increase of 3 billion yuan to 5 billion yuan.
It is worth mentioning that, in order to protect the stock price, China Mobile previously introduced the “green shoe mechanism” to grant the lead underwriter the option, and the lead underwriter can over sell shares not exceeding 15% of the underwriting amount at the issue price. From January 5 to February 3 (within 30 natural days after the listing of new shares), if China Mobile’s A-share price breaks, the Underwriters can start the “green shoe mechanism” and use the over allotment stock to raise funds to buy shares to stabilize the stock price.
the day after China Mobile returned to a, the “green shoe mechanism” may have been started. on January 5, on the first day of China Mobile’s listing back to a, the stock opened low with an increase of 9%, and as of the closing, the increase narrowed to 0.52% to close at 57.88 yuan / share. On the day after the listing of , China Mobile’s share price fell, hitting the issue price of 57.58 yuan / share for many times. On that day, nearly one million hands paid for the protection.
Since then, China Mobile’s share price has been hovering on the edge of breaking, during the 13 trading days from January 5 to January 21 when China Mobile returned to a, China Mobile’s A-share share price touched the issue price for many times, during this period, there has been a lot of funds to protect the issue price position.
For the reasons for the continuous downturn of China Mobile’s stock price, Fu Liang, an analyst in the communication industry, told the Securities Daily that is mainly caused by the recent continuous large-scale listing and the downturn of the market. Fu Liang told reporters that from the past financial reports, the fundamentals of China Mobile are very stable and there will be no major fluctuations in the short term. From the industry trend in the second half of the year, the orders of the three operators have also increased. However, the downturn of China Mobile’s stock price is the market’s judgment of China Mobile’s stock price, unless China Mobile has a major breakthrough in the short term Leapfrog cooperation, or the transmission of major performance benefits to the market, may help boost the stock price.
“In the long run, China Mobile’s return to shareholders is awesome, and share prices are not large, and share prices will not remain low.” Fu Liang said.
” whether it’s China Telecom Corporation Limited(601728) measures to stabilize the stock price or China Mobile’s share increase plan, their purpose is obvious. It’s to stabilize the stock price. ” Wang Zhengnan, a senior observer in the telecom operator industry, told the Securities Daily that ” green shoe mechanism is difficult to change the stock price trend of operators. ” on the one hand, “Green shoe mechanism” is only a short-term safeguard measure; On the other hand, operators have large scale, stable performance, low price to book ratio and relatively low stock activity.
In Wang Zhengnan’s view, in the short term, it may be difficult for the stock prices of the three operators to show an active trend, does not rule out the possibility of “breaking” during the protection period of the green shoe mechanism; but in the long run, “affected by the development of macro digital industry, the three operators will usher in favorable industrial transformation and rapid growth of non-traditional business in 2022, but there will be a transition period for the transmission of entity performance to the capital market.”
