- A second day of rallies got started for Chinese telecom firms after news that China Reform Holdings would put more than 10B yuan into the big three's towers spinoff.
- Market leader China Mobile (CHL -0.6%) ended up in negative territory in Hong Kong, however, closing down 0.6%. China Telecom (CHA +2%) closed up 1.5%, while China Unicom (CHU +2.6%) closed up 4.1%.
- China Unicom has the most to gain from tower reform, with the largest number of towers on a market-cap basis. China Unicom has 190,000 towers and a $33B market cap, while China Telecom has 125,000 towers with a $42.6B capitalization, and China Mobile has 450,000 towers with its $246B capitalization.
- China Unicom could gain 23% off of the tower spinoff, says Nomura's Leping Huang: "Assuming China Reform takes a 6% stake, and CM/CU/CT maintain their 40:30:30 shareholding ratio, we estimate their stake in TowerCo is around 23% of CU’s current market cap, 18% of CT’s market cap and 4% of CM’s market cap, respectively."
- Previously: China telecoms up on reports of investment in China Tower venture (Oct. 12 2015)