S&P analyst Kenneth Leon had the following to say about wireless operator China Mobile (ticker: CHL) at the end of last week:
China Mobile agreed to acquire 66.5% of Peoples Telephone from China Resources and Onwel Capital for HK$2.2 billion. The offer price is a 17% premium to the last closing price. We believe the revenue contribution from Peoples 1.2 million subscribers will not be material to China Mobile's 223.8 million subscribers. We are also disappointed that Peoples does not own a 3G license in the competitive Hong Kong mobile market. Despite our concerns about the proposed deal, we believe the American Depositary Shares are attractive, with China Mobile leading the China mobile market with a two-thirds market share position.