China Mobile hopes to raise $7.6 bn from Shanghai offering post Trump ban

The state-run company was removed from the New York Stock Exchange earlier this year due to an investment ban ordered by former President Donald Trump

China Mobile Ltd., the country’s largest wireless carrier by revenue, is aiming to raise 48.7 billion yuan ($7.64 billion) from its Shanghai listing in what would rank among the largest share offers for the nation’s domestic stock market in a decade. 

The state-run company, which was removed from the New York Stock Exchange earlier this year due to an investment ban ordered by former President Donald Trump, said it will issue 845.7 million shares at 57.58 yuan apiece Wednesday, according to the company’s prospectus filed with the Shanghai bourse late Monday. 

The proceeds that China Mobile is seeking to raise would rival that of Semiconductor Manufacturing International Corp.’s offer in Shanghai last year, making it among the top 10 listings on record in China, according to data compiled by Bloomberg. 

Assuming its over-allotment option is exercised in full, China Mobile would raise 56 billion yuan ($8.78 billion) from the listing, according to the prospectus. That would make it the world’s second largest offering this year after electric pickup truck maker Rivian Automotive Inc.’s $13.7 billion IPO, Bloomberg data show.  

Companies listing in mainland China raised nearly a record $80 billion this year, up about 17% from 2020.The NYSE suspended trading in China Mobile in January, along with the Asian nation’s other major state-owned operators, China Telecom Corp. and China Unicom Hong Kong Ltd. That development followed an order barring U.S. investments in Chinese companies the Trump administration deemed a threat to national security. 

China Telecom listed in Shanghai in August after raising more than $7 billion. China United Network Communications Ltd. is already trading on the exchange. 

Shen Meng, director at Chanson & Co., a Beijing-based boutique investment bank, said China Mobile’s stock offer should be successful as the Chinese government has prepared for it and there is ample capital in the domestic market to support such a deal. 

“China Mobile is one of the state-owned telecom companies. Its earnings are better than the other two,” Shen said. “In the 5G age, China Mobile has more impact and competition. Under the tradition of China’d stock market, the institutional and individual investors will positively welcome China Mobile. 

”China Mobile’s A-share offer will carry a price/earnings ratio of 12.02 times, based on its 2020 net income of 4.79 yuan per share calculated according to its total share capital enlarged by the offer, the prospectus shows. The company’s Hong Kong-listed shares were little changed in trading early Tuesday morning. 

Proceeds from the listing in the Chinese financial hub will be used to fund 5G network expansion, cloud infrastructure, smart-living projects and tech development that will cost the company 157 billion yuan in total, China Mobile has said. 

China International Capital Corp. and Citic Securities Co. are sponsors of China Mobile’s A-share offer. The main underwriters include Huatai United Securities Co., BOC International (China) Co. and China Merchants Securities Co.