China Unicom to boost capital spending on back of fundraising by parent, says analyst
Shanghai-listed China United Network Communications expected to raise huge investment from new investors, which may include Alibaba and Tencent
China Unicom, the world’s sixth-largest mobile network operator by subscribers, looks poised to aggressively raise capital spending this year amid mounting speculation that its parent will soon have well-heeled Alibaba Group Holding and Tencent Holdings as new investors.
“Unicom will likely increase network equipment purchases in the fourth quarter if that fundraising gets completed next quarter,” said Jefferies equity analyst Edison Lee, following a report about the fundraising of Shanghai-listed parent China United Network Communications.
China United Network is one of eight state-owned enterprises participating in the pilot implementation of the government’s so-called mixed-ownership reform programme, which aims to introduce private-sector capital and expertise to improve their efficiency and become more market-driven.
China United Network, however, has denied the report.
“It suggested a higher amount than our previously estimated range of 30 billion yuan to 35 billion yuan [US$4.4 billion to US$5.1 billion],” Lee said.
“Unicom’s increased capital spending will start from the fourth quarter, but will be recognised next year. My forecast is 60 billion yuan in capital expenditure for Unicom in 2018, up from 45 billion yuan this year.”