China Unicom

China Mobile disclosure praised

PUBLISHED : Tuesday, 22 October, 2002, 12:00am
UPDATED : Tuesday, 22 October, 2002, 12:00am


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China Mobile (Hong Kong) has won applause from analysts after becoming the first Hong Kong-listed telecommunications carrier to release full quarterly results.

The dominant cellular carrier reported weaker subscriber growth for last month but continues to be favoured over No 2 rival China Unicom due to its enhanced disclosure.

Credit Suisse First Boston maintained an 'outperform' rating on China Mobile stock.

By contrast, the investment bank has a neutral stance on China Unicom, which reported stronger-than-expected third-quarter revenue last week.

'[China Unicom's] figures were good relative to low expectations, but include only top-line figures with no visibility to margins/profitability,' Credit Suisse said in a research report yesterday.

China Mobile said at the weekend that it generated 8.57 billion yuan (about HK$8.05 billion) net profit in the July-September quarter, bringing its nine-month profit to 25.16 billion yuan.

The company said it added 2.07 million new users last month, giving it a total subscriber base of 111.44 million. September's figure was marginally lower than its monthly average for new customers of 2.32 million for the past nine months.

Analysts were slightly disappointed by China Mobile's softening in subscriber growth and headline revenue for the third quarter, but were heartened by an increase in its profit margin.

China Mobile said its earnings before interest, tax, depreciation and amortisation (ebitda) edged up 0.2 percentage point quarter on quarter to 59.1 per cent due to an increase in operating efficiency.

Last week, China Unicom said its CDMA network subscriber growth accelerated last month, adding 590,000 new users to reach 2.28 million subscribers. Its GSM network maintained its growth rate, adding one million users to total 36.14 million users as of September.

While China Unicom reported headline revenue of 28.4 billion yuan, it did not give details of its ebitda and net profit.

'This is the first time a telecoms service provider listed in Hong Kong has provided such a high level of detail, and we believe it will benefit not only the company itself, but all service providers who are willing to take the same route,' ABN Amro said of China Mobile in a research report.