Parent may buy more China Mobile shares
Benjamin Scent
The parent company of China Mobile (0941) may buy more shares in the mobile operator if the share price falls too far, its chairman said yesterday.
State-owned China Mobile Communications Corp, which currently holds a 74.3 percent stake in China Mobile, may buy more shares of its listed arm if the stock price falls to a level that undervalues the company, chairman Wang Jianzhou said yesterday at an industry event in Macau.
China Mobile shares are currently trading at 11.2 times earnings and 3.1 times book value, based on yesterday's closing price of HK$66.30. They have fallen 51.9 percent since the start of the year, in line with the 53.6 percent decline in the benchmark Hang Seng Index.
Wang added China Mobile is on the hunt for acquisitions in emerging markets, including Asia, and said telecom assets look "very inexpensive" now. The company is willing to consider deals with management control on offer as well as transactions that would see CMCC take only a minority stake, Wang said. CMCC had previously only considered deals that would give it a majority stake in the acquisition target. However, Wang noted that asset owners may not be willing to sell in the current environment.
Meanwhile, China Unicom (0762) chairman Chang Xiaobing said he expects the mainland government to speed up the issuance of licenses for third-generation (3G) mobile services, which he hoped could happen by year-end.