China Mobile (HK): profits up, shares down

BEIJING—China Mobile (HK), the Hong Kong-listed subsidiary of China Mobile Communications based in Beijing, reported a 58.3-percent increase in net profits to CNY13.8 billion (US$1.67 billion) during the first six months of this year compared with the same period last year.
Brokerages were, however, disappointed as they expected a profit rise of between 64 and 73 percent. China Mobile (HK)’s shares plunged 9.7 percent to HK$31.2 (US$4) on Aug. 16 on the Hong Kong stock exchange, their lowest level since 4 April.
The operator’s profits were primarily affected by a steep 39.5-percent fall in average revenue per user (ARPU) in the first half of the year to CNY158 (US$19.11). During the first half of the year, 94.7 percent of the 13.78 million new subscribers added were prepaid card users whose ARPU was CNY78 (US$9.44) compared with CNY204 (US$24.68) for regular subscribers.
In the second half of the year, revenue will be affected by the scrapping as of 1 July of a one-time network connection fee of CNY500 (US$60).
China Mobile (HK) had 58.91 million users at the end of June connected to its 13 provincial networks. Its parent company has 18 networks with 28 million subscribers. Chairman Wang Xiaochu said there is no timetable to acquire more networks from its parent.