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China Mobile could spin off units: ceo
Posted on Friday, 10 August 2018 11:51
China Mobile is considering spinning off three to four independent operating subsidiaries that have their own financial accounting and fewer connections with large-scale businesses, the chief executive (ceo) said following the company’s 2018 interim results.
Li Yue did not reveal further details as the timing and location of any initial public offering still needs to be decided but Caixin noted Li indicated the mainland and Hong Kong bourses are all potential destinations.
However, the newspaper added the ceo has drawn a line under separating its Hong Kong subsidiary as this would be against a strategy of integrating the group’s mobile operations towards an asset-light business model.
A telecommunications analyst told Caixin that China Mobile’s advertising, internet television, infrastructure or online video and content platform could all be in the firing line.
Any such move comes amid increased rivalry - with the likes of China Unicom and China Telecom - within the domestic market on the back of the government’s efforts to boost industry competition.
However, dominant sector player China Mobile has managed to weather the storm so far, with its top and bottom lines rising 2.9 per cent and 4.7 per cent, respectively, in the six months ended 30th June 2018.
In all, the group booked net profit attributable to shareholders of CNY 65.64 billion (USD 9.62 billion) on revenue of CNY 391.83 billion, compared with CNY 62.68 billion on CNY 388.87 billion in H1 2017.
China Mobile added 27.32 million 4G customers and 190,000 base stations in H1 2018 and is proactively trialling 5G network and applications.
Zephyr, the M&A database published by Bureau van Dijk, shows global communications companies have targeted in 994 announced mergers and acquisitions worth a combined USD 328.94 billion, so far this calendar year.
Walt Disney’s increased bid for Twenty-First Century Fox, Hochtief’s acquisition of Abertis Infraestructuras and Vodafone’s deal for Liberty Global’s overlapping European assets all helped drive total sector value for H1 2018 to the highest recorded since H2 2015.
© Zephus Ltd