Shares of China Telecom, one of the country’s big three telecom operators, debuted on the Shanghai Stock Exchange (SSE) in the biggest float in the A-share market in a decade. The IPO netted CNY54.1 billion. China Telecom is already listed in Hong Kong, where the price of its shares dropped following news of the Shanghai IPO. China Telecom first went public on the New York Stock Exchange (NYSE) and the Hong Kong bourse in November 2002. After delisting from the U.S. in May due to local investment restrictions, China Telecom announced it would list on the A-share market. China Telecom’s competitor China Mobile submitted its A-share IPO application to the market regulator last week, after delisting from the NYSE. It aims to raise CNY56 billion, which could surpass China Telecom’s IPO. China Unicom, another major telecom operator which went public in Shanghai in 2002, said it is considering a spinoff or separate A-share listing for its subsidiary China Unicom Smart Connection Technology, which specializes in technologies for internet-connected vehicles. Experts said A-share listings will help the telecom carriers broaden their fundraising channels, which should help them to transform their businesses to further exploit the commercialization of 5G services.
Xiang Ligang, Director General of the Information Consumption Alliance, said domestic investors are familiar with the three companies, which could help generate more funding for their 5G plans. China Telecom Chairman Ke Ruiwen said in a briefing earlier this year that the Shanghai IPO proceeds will help the company to focus on industrial internet services for businesses, “new infrastructure”, and 5G development, all of which are crucial to the company’s growth. China Telecom said it will use the proceeds for its 5G projects, a new type of infrastructure integrating cloud and internet services, and other scientific and technological innovation projects.
In the first half of this year, China Telecom’s revenue was CNY219.2 billion, up 13% year-on-year, which yielded a net profit of CNY17.7 billion, up 27% year-on-year. Guo Shiliang, an independent financial analyst, said China Telecom’s listing on the A-share market is partly due to the risks associated with U.S. regulators’ tighter grip on market proceedings there, the China Daily reports.
