China Mobile, the world's largest mobile network operator in terms of total users, stated Tuesday that it intends to secure up to 56 billion yuan (US$8.8 billion) in a Shanghai public offering, a year after being delisted from the New York Stock Exchange.
Based on an exchange filing, China Mobile would sell between 846 million and 973 million shares, inclusive of an over-allotment option, at 57.58 yuan apiece in Shanghai to accommodate high investor demand. The profits of 56 billion yuan (US$8.77 billion) would also make it the world's second-largest IPO in 2021.
China Mobile's proposed proceeds would be comparable to those raised by Semiconductor Manufacturing International Corp. in Shanghai last year, making it one of China's 10 leading public offerings, according to Bloomberg statistics.
In January, the NYSE suspended trading in China Mobile, as well as China Telecom Corp. and China Unicom Hong Kong Ltd, the Asian nation's other major state-owned operators. This came after the Trump administration issued an order that prohibits American participation in Chinese enterprises that it deemed a national security concern.
An increasing number of Chinese companies registered in the United States are considering listings in China or Hong Kong in the face of mounting Sino-U.S. frictions.
The U.S. blacklisted Chinese corporations, including artificial intelligence company SenseTime Group, last month over allegations of human rights violations and approved procedures to delist non-compliant Chinese firms from American stock exchanges in three years.
The offer price marks a roughly 52% premium over China Mobile's Hong Kong-listed stock, which closed Friday at HK$46.45. In Shanghai, the stock will trade under the ticker symbol 600941. CICC and Citic are co-sponsors of China Mobile's first public offering.
The prospectus indicates China Mobile's A-Share offer will have a price-to-earnings ratio of 12 times, based on its 2020 net income of nearly 4.8 yuan per share calculated based on the total share capital expanded by the offer. Early Tuesday morning, China Mobile's Hong Kong-listed shares were barely changed.
Five of the top 10 Hong Kong listings in 2021, including Baidu and Bilibili Inc, were secondary listings of U.S.-listed Chinese firms, according to accounting firm EY, and the trend of Chinese companies returning home will continue.
An SWS Research shows China Mobile had 946 million clients and internet connections in 205 million homes last year. As a result, the company now controls about 12% and 18% of China's domestic mobile phone and data connection markets, respectively.
