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BIZCHINA> Top Biz News
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China Mobile Q3 net increases 2.6%
(China Daily/Agencies)
Updated: 2009-10-21 08:26 China Mobile Ltd, the world's biggest phone company by market value, posted a 2.6-percent increase in quarterly profit after reduced prices helped the company attract customers. Third-quarter net income rose to 28.6 billion yuan ($4.19 billion) from 27.9 billion yuan a year earlier, according to figures derived from nine-month earnings reported by the Beijing-based company yesterday. The carrier was expected to post profit of 29 billion yuan, the median of seven analysts' estimates in a Bloomberg survey. China Mobile, the third-worst performing stock on Hong Kong's benchmark index this year, cut call fees and raised handset subsidies to stem the 29-percent drop in user additions. Chairman Wang Jianzhou plans to sustain the company's expansion in lower-income rural areas as China Telecom Corp and China Unicom (Hong Kong) Ltd focus on high-speed services in cities. "For the company's profit to grow, it has to really work on keeping operating costs down because revenue growth will be slower," Steven Liu, who rates China Mobile shares "buy" at DBS Vickers Ltd in Hong Kong, said before the earnings announcement. China Mobile fell 0.7 percent to close at HK$78.75 in Hong Kong yesterday before the earnings announcement. The stock has advanced 1.2 percent this year, compared with a 56-increase in the Hang Seng Index. Profit at China Mobile declined for the first time since 1999 in the second quarter as the economic slowdown weighed on demand and the government reorganized the industry to raise competition. Fixed-line operator China Telecom acquired a network from Unicom to enter the wireless market, while China Unicom bought a landline business. China Mobile is the worst performing stock among the three Chinese phone companies this year. Shares of China Telecom, the country's biggest fixed-line carrier, have climbed 32 percent, while Unicom, the country's second-largest mobile-phone company, has gained 19 percent.
Earnings before interest, tax, depreciation and amortization, a measure of operating profit, increased 5 percent to 57.8 billion yuan, compared with the 58.1-billion-yuan median estimate of four analysts in the Bloomberg survey. China Mobile added 15.24 million users in the third quarter for a total of 508.4 million at the end of September, according to its website.
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