It’s just a matter of time! Operators, who are not short of money, are about to usher in a large-scale listing trend

"Wealthy and powerful" has always been a joke among users about operators. Although this evaluation has a certain basis in reality, it is actually a user's business strategy. Although the financial reports show that the three major operators have been profitable in recent years, with a combined profit of more than 500 billion yuan, from various recent trends, operators that are not short of money are about to usher in a large-scale listing boom.

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1. China Telecom took the lead in launching the return to the stock market

China Telecom officially announced that in order to seize the opportunities of digital development, improve corporate governance, broaden financing channels, accelerate reform and development, promote the implementation of strategies, and achieve high-quality development, the company intends to apply for the issuance of A shares and list on the main board of the Shanghai Stock Exchange.

The announcement shows that, subject to compliance with regulatory requirements such as the minimum issuance ratio of the listing place, China Telecom plans to publicly issue no more than 12.093 billion A shares (that is, no more than 13% of the company's total issued share capital after this A share issuance, before the exercise of the over-allotment option).

Public information shows that China Telecom will publicly raise more than 100 billion yuan for 5G network and big data construction in the next three years, of which the first phase will raise 54 billion yuan. According to the scale of the first phase of funds raised and the total number of publicly issued shares, it is preliminarily estimated that the issue price of its shares will be around 4.5 yuan per share.

Judging from the business performance in the past three years, China Telecom is a steady operator that has taken steady steps. Through steady and solid development, China Telecom has not only further consolidated its position as the second largest mobile communications operator, but also maintained a synchronous growth trend with China Mobile in fixed-line broadband.

2. China Mobile officially responds to rumors of returning to the stock market

Recently, insiders revealed rumors that China Mobile is considering listing on the A-share market to seek financing channels for the development of 5G networks. Public reports show that the rumors further point out that China Mobile's return to domestic listing is still in the early stages, and China Mobile has not yet decided on the scale and timing of the issuance.

China Mobile has officially responded to the rumors of a return to the A-share market. China Mobile executives said that the company has noticed that the mainland capital market has introduced a series of new policies in recent years, which have provided a favorable environment for red-chip companies to return to the A-share market, and is actively tracking and promptly studying and communicating relevant policies.

The chairman of China Mobile further stated that he was confident that returning to the A-share market would be beneficial to the company's development and would also give customers more opportunities to share in the benefits of the company's growth and development. From the specific terms used in response to the listing rumors and the policy information revealed in them, it can be seen that it is only a matter of time before China Mobile announces its return to the domestic market.

As the undisputed leader among operators, China Mobile has always been an excellent blue chip stock. It has not only further consolidated its traditional advantages in the mobile communications market, but also further increased its advantages in the fixed-line broadband market, even though the current stock price of China Mobile's H shares does not match the corporate value.

3. China Telecom WingPay begins preparations for listing

China Telecom (listed in Hong Kong) recently announced that it had entered into an agreement with its parent company, China Telecom Group, on March 26, 2021. China Telecom agreed to sell all of its equity in Tianyi E-Commerce (Yingfun) with a capital contribution of RMB 500 million to China Telecom Group for a transfer price of RMB 3.897 billion.

Communications industry media reported that as early as 2019, senior executives of China Telecom stated that listing Yifuzhi on the stock market was a long-term goal. According to the latest announcement of China Telecom, on December 1, 2020, Tianyi E-Commerce completed its second capital increase, and the IPO seems to be getting closer and closer.

Although we have not found any official explanation from China Telecom regarding the equity changes of Wing Payment, analysis of reports from relevant media in the communications industry shows that Wing Payment has already started preliminary preparations for its IPO - further concentrating its dispersed equity.

Public data shows that in 2019 and 2020, Yizhifu's pre-tax net profit was approximately RMB 84 million and RMB 131 million, respectively; and its post-tax net profit was approximately RMB 69 million and RMB 114 million, respectively. As of February 28, 2021, Yizhifu's unaudited net asset value was approximately RMB 1.469 billion.

4. The listing path of China Mobile's subsidiary is looming

As early as three years ago, senior executives of China Mobile said they would choose the right time to push for the spin-off and listing of mature subsidiaries. Although three years have passed and the strength of some of China Mobile's subsidiaries has been tested by various complex situations, there is no further news on the promotion of listing.

With the support of China Mobile, the growth of its subsidiaries naturally enjoys advantages that other companies cannot match. After all, China Mobile has more than 940 million mobile phone users and more than 210 million fixed-line broadband users. This way of bringing its own user traffic is something that Internet companies must envy.

There are many subsidiaries with mature businesses within China Mobile, such as China Mobile E-Commerce (and payment), China Mobile Terminal Company, and Migu Company (Internet content company), etc. According to official news from China Mobile, as early as 2017, the average monthly active users of Migu clients exceeded 100 million.

Judging from the rise of BATJ and other Internet giants, spending money to acquire customers has become a necessary path for Internet companies to grow and develop, regardless of whether they have their own user traffic. In fact, this is likely to support Yifu Pay's preparation for an IPO. The conditions of China Mobile's subsidiary are also quite good, and the future IPO will also be a matter of time.

Although the halo of operators has long faded, and the current stock market is not prosperous enough, this cannot stop operators from making various efforts to prepare resources to compete for my country's global 5G leadership. Regardless of whether the capital market is optimistic about operators, whether it is a sunset industry or a sunrise industry, operators are the foundation that Internet companies cannot be separated from, and they are also the foundation for supporting the implementation of my country's 2025 strategy. Once the policy dividends of "letting water flow to raise fish" fade, the status exchange between the Internet and operators will be a high probability event, and the future may be a different scene.