Based on the press release below, the selling price is 6.6bn/642.9m, which can't be right. Can someone shed some light on this? Thanks.
British mobile-phone operator
Vodafone (LON: VOD | PowerRating) said yesterday it has agreed to offload its entire stake of 3.2% in China Mobile (HKG:0941). Vodafone expects cash proceeds from the transaction of some GBP4.3bn (USD6.6bn/EUR5.2bn), before tax and transaction costs. The deal comprises the sale of 642.9m shares in China Mobile via an accelerated bookbuilding.
VOD share sale is a distraction, more significant theme is that penetration rates at cities are high and new subscriptions are coming from rural areas. Also fear that China Unicom has a better 3G network and will take market share of high end (high ARPU) customers away from CHL. CHU has its own problems because it doesnt have the scale like CHL to support CapEx. But overall penetration rates are still very low relative to developed countries and subscriber base is expected to continue growing for the indefinite future. New subscribers at the margin are poorer (rural) and pressures ARPU, but this is offset by an increase in non-SMS VAS, which is high margin and high growth, and is unappreciated in the market given CHL's low expectation 11X PE ratio. The market is expecting earnings growth between 1-2% for the next couple years, which provides little risk to CHL as a stock given its 3.7% dividend yield. Upside is likely in non-SMS VAS EPS revisions, A-Share listing in China (possibly 2011), and higher payout of dividend subsequent to A share listing. Long term CHL appears to regain the technology lead by "leapfrogging" 3G (TD-SCDMA) strength by making current configuration 4G (TDD-LTE) ready.
stick with chl
1) Leading 70% market share of mobile phone market in China, & attaining over 50% in new monthly subscriptions
2) No fixed line business, which is dying off (unlike CHT)
3) Decline in ARPU and SMS offset by non-SMS Value Added Services (VAS), mainly games and music for younger generation (teens through 29)
From a local analysis, Tai Fook published 9/10
Speculation of an accelerated renminbi appreciation has been triggered
by a message from China's Minister of Commerce, Chen Deming. He
noted that mainland exporters should be better prepared for a stronger
domestic currency after it strengthens to a one-month high against the
US dollar. Mainland exporters that survive on thin margins are
particularly vulnerable to a stronger renminbi. The Ministry of
Commerce has revised upward its 2010 forecast of China's trade
surplus to US$150b from the US$100b made early this year; the
revision still indicates a significant shortfall from last year's US$196b
The currency speculation might have helped stir up sentiment in the
local market, which perceives a stronger renminbi as positive for
attracting funds inflow. Sector-wise, China airline stocks reacted the
most favourably. The overall market held firm on Thursday as moderate
bargain hunting emerged. The HSI staged a 78-point rebound, which
would have been stronger had it not been for the ex-dividend effect of
China Mobile (0941.HK, $77.45, BUY). The stock continued to ease
amid reports that demand for Vodafone plc's sale shares has been
mediocre, implying that the overhang may remain a while longer in the
hands of the underwriters of the $50.8b placement.