Mon, May 18, 2:39 PM
- After closing lower in Hong Kong, China's big three wireless carriers are down in U.S. trading, giving back Friday gains after saying they'd cut data prices and boost speeds in an effort that could push migration to 4G.
- In the U.S., China Mobile (NYSE:CHL) is down 4.1%; China Telecom (NYSE:CHA) is down 4.1% and China Unicom (NYSE:CHU) down 3.2%.
- The state-owned firms have gotten a push from Premier Li Keqiang to expand Internet access. Leader China Mobile will cut mobile data prices by at least 35% this year; China Unicom plans cuts of 20% or more per megabyte, and China Telecom is looking at average cuts of 30%/megabyte.
- The move means a change in short-term revenue but could raise profits depending on the migration rate to more lucrative 4G accounts and usage.
- Previously: China mobile infrastructure spending jumped 51% in 2014 (Apr. 21 2015)
Tue, Apr. 21, 9:11 PM
- Mobile infrastructure spending in China rose 51% last year, according to an Infonetics report, primed by "robust" TD-LTE deployments at wireless leader China Mobile (NYSE:CHL) and W-CDMA expansions at China Unicom (NYSE:CHU).
- Those increases countered a significant capex cut by third competitor China Telecom (NYSE:CHA).
- China Mobile in particular had a goal of raising TD-LTE rollouts from 150K TD-LTE eNodeBs to 500K, but ended the year with 720K in a next-gen push. The company has 60% of China's mobile subscribers.
- The mobile operators added 58M subscribers in 2014 to push the total market to 1.3B subscribers.
- Gains today: China Mobile (CHL) up 4.3%; China Telecom (CHA) up 1.5%; China Unicom (CHU) up 3%.
- Previously: China telecoms: Providers gain again; Unicom adds 1.6M net subs (Apr. 21 2015)
- Previously: Chinese wireless firms up on PBOC easing; China Mobile notes Q1 results (Apr. 20 2015)
Tue, Apr. 21, 11:16 AM
- Chinese telecom providers are up for a second straight day following China's stimulus.
- In U.S. trading, China Mobile (NYSE:CHL) is up 4.6%; China Telecom (NYSE:CHA) is up 1.8%; and China Unicom (NYSE:CHU) is up 3.4%.
- China Mobile had previously jumped 7.5% in Hong Kong, while China Unicom had gained 3.6% there.
- In March operations, China Unicom pointed to net added mobile subscribers of 1.6M to bring its total there to 294.75M; net added fixed-line broadband subscribers of 375K to bring that total to 69.6M; and a net loss in local access subscribers of 579K to bring that total down to 80.3M.
- China Telecom signed a deal with payments platform SmartTrans to bring financial news and info to subscribers through its "Love Finance" offering, to be promoted through mobile news, texts and WAP channels. Subscribers to that product will pay 5 yuan/month.
- Previously: Chinese wireless firms up on PBOC easing; China Mobile notes Q1 results (Apr. 20 2015)
Mon, Apr. 20, 7:35 PM
- Chinese wireless firms jumped in U.S. trading today in reaction to new easing from China, where the central bank cut its reserve requirement ratio a percentage point to 18.5%
- China Mobile (NYSE:CHL) gained 5.4% today and is up another 3.2% after hours; China Telecom (NYSE:CHA) closed up 4.9%; and China Unicom (NYSE:CHU) closed up 5.3% (and is up now 0.2% after hours).
- China Unicom was among leaders among Hong Kong stocks today, trading 2.2% higher there, while China Telecom was up 2.8%.
- China Mobile provided unaudited key indicators from its Q1, noting that while operating revenue was up 3.9% Y/Y (to 160.9B yuan) and EBITDA up 2.8% (to 59.2B yuan), net profit slipped 5.6% Y/Y to 23.8B yuan.
- As the substitution impact of over-the-top business (including apps like Tencent's WeChat) on China Mobile's traditional business "continued to intensify, voice services and SMS and MMS services further declined," the company noted, with voice and SMS usage down 1.3% and 4.5% respectively.
- "The Group is at a critical stage of transformation of its development," writes Chairman Xi Guohua, noting that capex and cost input continue to remain high amid heavy demand for resources from 4G construction, business development and customer retention.
Wed, Apr. 8, 10:30 AM
- China's mobile firms have ramped up considerably today in U.S. trading as regulators work toward transferring 1M cell towers to a state-backed joint venture among the three.
- The transfer to China Tower -- the joint venture between China Mobile (CHL +6.5%), China Telecom (CHA +9%) and China Unicom (CHU +4.2%) -- should allow the three to book a steroidal 148B yuan ($23.9B) in one-time gains.
- Details of the transfer are sketchy, but China's government plans to wrap it by Aug. 15.
- China Mobile holds a 40% stake in China Tower, and China Unicom and China Telecom split the remaning 60%.
Wed, Apr. 8, 9:12 AM
Thu, Mar. 19, 12:08 PM
- China Mobile's (NYSE:CHL) Q4 revenue fell 4.2% Y/Y to RMB160.2B ($25.7B), missing a Bloomberg consensus of RMB165.8B. With 4G investments and a mobile services VAT taking a toll, net income fell 12% to RMB26.7B ($4.29B).
- The world's biggest carrier says it's facing "severe challenges from intensified competition," both from rivals China Unicom and Telecom, and from the "substitution effect" of OTT messaging services delivered by the likes of Tencent and Weibo.
- Over the whole of 2014, revenue rose 1.8% to RMB641.4B, and telecom services revenue fell 1.5% to RMB581.8B. EPS fell 11% to $0.86 per ordinary share, or $4.31 per ADS.
- Voice and SMS/MMS revenue fell 13% in 2014 to RMB343.7B; data revenue rose 43% to RMB150.6B; revenue from app/information services (faces competition from Internet firms) rose 12% to RMB64.4B.
- China Mobile plans to cut its capex to RMB199.7B ($32.1B) in 2015 from 2014's RMB213.5B; 4G capex is expected to fall to RMB72.2B from RMB80.6B. With government pressure to slash phone subsidies continuing, sales/marketing spend is expected to fall 20%; subsidy spend fell 29% in 2014.
- The carrier also reports it had 2.28M net subscriber adds in February, an improvement from January's 1.92M and bringing its total base to 810.8M. 3G subs rose by 1.2M to 242.2M, and 4G subs by 16.6M to 123.4M. Over 100M 4G phones were sold in 2014.
- Earnings release (.pdf), presentation (.pdf)
Mon, Mar. 16, 9:25 AM
- China's leading telecom China Mobile (NYSE:CHL) is up 3.6% premarket in U.S. ADR trading after gaining 2.4% in Hong Kong following Premier Li Keqiang's comments that China is ready to print money if China's economy keeps slowing.
- China Mobile ADRs have gained 8.4% YTD and are up 42% over the past 12 months.
- Telecom peers: China Unicom (CHU +1.5%); China Telecom (NYSE:CHA).
Tue, Mar. 3, 1:45 PM
- China Unicom (NYSE:CHU) is down 5.5% as it posted Q4 income that fell 26% and missed expectations, pointing to VAT reform and playing from behind on high-speed data as headwinds.
- Q4 revenue of 69.3B yuan (down 7%) beat expectations by 2.1B yuan. EBITDA of 20.77B yuan missed expectations by 1B yuan.
- For the full year, net profit was up 15.8% to 12.06B yuan. Net profit was 4.9% of service revenue, up from 4.4% in 2013. Full-year revenue of 244.88B yuan was up 2.6%.
- Full-year revenue breakouts: Mobile, 155.1B yuan (up 2.6%); fixed-line, 88.5B yuan (up 2.3%).
- The company warned that a slowdown in user growth may persist through 2015 or even reverse into a decline, and Chairman Lu Yimin again batted down speculation about a merger with China Telecom (NYSE:CHA) to keep up with clear market leader China Mobile (NYSE:CHL).
- China Unicom has been running behind on 4G implementation, having just received its 4G LTE FDD license and playing catch-up with China Mobile (CHL), which features 100M users.
- Previously: Merger rumors lift U.S. shares of Chinese telecoms (Feb. 12 2015)
- Previously: Chinese telecoms jump in Hong Kong on merger rumor (Feb. 11 2015)
Thu, Feb. 12, 12:15 PM
- Building on last night's report about merger chatter, Chinese telecoms marked gains similar to those in Hong Kong with their ADRs on the NYSE.
- Leader China Mobile (NYSE:CHL) is up 2.9%; China Unicom (NYSE:CHU) is up 4.2% and China Telecom (NYSE:CHA) +2.9% on the rumor that the two would merge to better compete with China Mobile.
- China Telecom says it isn't aware of any plan to merge with China Unicom.
- All three finished the Hong Kong market day on heavy volume with China Mobile up 3.9%; China Unicom up 4.3%, and China Telecom up 2.9% (on near quadruple volume).
Wed, Feb. 4, 2:05 PM
- In a fresh monetary easing move, the PBOC has cut its reserve requirement ratio for banks by 50 bps to 19.5%, its first cut since 2012. Many Chinese Internet and mobile stocks are posting healthy gains on a day the Nasdaq is near breakeven.
- Carriers China Mobile (CHL +2.3%), China Unicom (CHU +4.5%), and China Telecom (CHA +1.9%) are among the gainers. As are online retailers Vipshop (VIPS +4%) and Dangdang (DANG +5.1%).
- Other notable gainers include online video giant Youku (YOKU +3.9%), mobile game publishers Sky-mobi (MOBI +7.8%) and China Mobile Games (CMGE +2.6%), chat app/social network owner Momo (MOMO +4.1%), microblogging leader Weibo (WB +2.7%), online/mobile game developer NetEase (NTES +2.4%), online classifieds leader 58.com (WUBA +2.3%), and #2 online travel agency Qunar (QUNR +3.4%).
- ETFs: KWEB, CQQQ, QQQC
- Previously covered: SouFun, E-House
Dec. 1, 2014, 10:38 AM
- Chinese Internet and telecom names are among the biggest tech decliners as the Nasdaq registers a 0.9% drop. A soft November PMI print isn't helping.
- Giants Alibaba (BABA -4.3%) and Baidu (BIDU -2.8%) are among the casualties. As is Qunar (QUNR -5.8%), which reports after the bell.
- Other Internet decliners: BITA -12%. QIHU -4.4%. CTRP -4.3%. SFUN -7.2%. LEJU -7.5%. RENN -6.3%. SINA -3.8%. WB -3%. YY -3.9%. VIPS -3.8%. SOHU -3.5%. MOBI -4.3%. CMGE -8.6%.
- Telecom decliners: CHL -3.6%. CHU -3.9%. CHA -4%.
- ETFs: KWEB, CQQQ, QQQC
Sep. 16, 2014, 8:41 AM
- According to a report in the state-owned 21st Century Business Herald, Apple (NASDAQ:AAPL) may not get Beijing's approval for iPhone 6 sales until next year.
- Meanwhile, China Mobile (NYSE:CHL) Chairman Xi Guohua tells reporters he doesn't know when the new iPhones will be available, and his company will focus on selling cheaper phones which don't require subsidies. "The direction of our development is to completely focus on the mass market,” says Xi. “We have 4G devices selling for ¥1K. I believe, subsidy or no subsidy, discount or no discount, the common person will be able to appreciate this.”
- China Mobile fell the most in two years in Hong Kong acton overnight, down 3.9%. Apple is lower by 1.1% premarket.
Sep. 15, 2014, 2:39 PM
- America Movil (AMX +2.4%) has contacted potential suitors including AT&T (T +0.6%) and SoftBank (OTCPK:SFTBY, OTCPK:SFTBF), and perhaps BCE’s Bell Canada (BCE -0.1%) and China Mobile (CHL +1%), as it prepares to sell assets along the east coast of Mexico that could fetch as much as $17.5B, Bloomberg reports.
- AMX is selling assets in its biggest market to appease antitrust regulators; the Mexico-based carrier, which commands 70% of the local wireless market and 80% of landlines, may get penalties revoked if it cuts market share below 50%.
Aug. 15, 2014, 11:25 AM
- Mizuho has upgraded China Mobile (CHL +2.3%) to Neutral following its 1H report, in which the carrier reported a 34% increase in data revenue to go with 5% and 13% respective declines in voice and SMS/MMS revenue.
- The Street has been quite pleased with CHL's plans (following government pressure) to cut its 2014 phone subsidy budget to RMB21B ($3.4B) from a prior RMB34B ($5.5B). With the company having spent RMB15.3B on phone subsidies in 1H14, that suggests 2H subsidy spend will only be RMB5.7B ($930M).
- Deutsche and Morgan Stanley hiked their targets yesterday. The latter noted management expects earnings (down 8.5% Y/Y in 1H) to bottom in 2014, sooner than the firm expected.
Aug. 14, 2014, 1:18 PM
- China Mobile's (CHL +3.4%) operating revenue rose 7.1% Y/Y in H14 to RMB324.7B ($54.1B). But net profit fell 8.5% to RMB57.7B ($$9.37B) thanks to 4G investments, iPhone subsidies, and declining SMS revenue (high-margin).
- The world's biggest carrier ended July with 793.6M subs, up from 790.6M at the end of June and 767.2M at the end of 2013. 3G subs have grown to 240.9M from 191.6M at the end of 2013, and 4G subs have grown to 20.4M since the launch of services in February.
- CHL's 4G network now covers 300+ cities. The company has an RMB225.2B 2014 capex budget, of which RMB74.9B is devoted to 4G. It hopes to have 50M 4G subs by year's end.
- Voice services revenue fell 5.3% Y/Y in 1H14 to RMB165.8B, and SMS/MMS revenue 13.2% to RMB18.2B. But data services revenue rose 34% to RMB121.9B on the back of a 91.4% increase in mobile data traffic.
- Chairman Xi Gouhua reiterates CHL will look for foreign acquisitions to boost growth."Our targets are not limited to those in emerging countries. We will also invest in companies that operate in developed markets if they offer good growth opportunities."
- Credit Suisse has upgraded shares to Outperform.
- Earnings slides (.pdf)
CHL vs. ETF Alternatives
China Mobile Ltd provides cellular telecommunications and related services in the People's Republic of China and Hong Kong SAR. It offers voice services, voice value-added services & telecommunications network planning.
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