Will industry restructuring help?
China Unicom, the smaller of the nation's two mobile-phone companies, reported first-quarter profit rose 1.5 percent, missing analyst estimates, after losing market share to China Mobile.
Net income climbed to 2.02 billion yuan ($288.84 million), or 0.15 yuan a share, from a restated 1.99 billion yuan, or 0.13 yuan, a year earlier, the company said in a statement to the Hong Kong stock exchange. Unicom was expected to post profit of 2.2 billion yuan, according to the median of four analysts' estimates compiled by Bloomberg.
China Mobile, the world's biggest phone company by users, added customers at five times the rate of Unicom in the first quarter as the wireless carriers cut charges. Unicom shares have risen more than 43 percent in the past year on speculation its assets may be broken up and sold to the fixed-line carriers in a government revamp to improve competition in the industry.
“While Unicom is adding more users, it's still far behind China Mobile in terms of users and scale,” Chen Haofei, an analyst at China International Capital, said before earnings were announced. “The industry restructuring may help Unicom as it will be able to focus on one network.” He rates the company's shares “accumulate.”
Unicom's sales climbed 5.8 percent to 25.5 billion yuan. The company's shares rose 2.9 percent to HK$17.18, before the earnings were announced, compared with 1.6 percent gain in the benchmark Hang Seng index.
The mobile carrier, which controls about 33 percent of the nation's wireless-phone market, added 4.5 million users in the first quarter for a total of 167 million. China Mobile increased subscribers 22.8 million in March to 392.1 million.
Fixed-line carriers China Telecom and China Netcom Group have lost phone users for at least eight straight months and have relied on Internet subscribers to bolster earnings.
China, the world's biggest mobile market by users, had 565.2 million wireless-phone subscribers at the end of February and 362.2 million fixed-line customers.
Will China Unicom get back on track?
Net income climbed to 2.02 billion yuan ($288.84 million), or 0.15 yuan a share, from a restated 1.99 billion yuan, or 0.13 yuan, a year earlier, the company said in a statement to the Hong Kong stock exchange. Unicom was expected to post profit of 2.2 billion yuan, according to the median of four analysts' estimates compiled by Bloomberg.
China Mobile, the world's biggest phone company by users, added customers at five times the rate of Unicom in the first quarter as the wireless carriers cut charges. Unicom shares have risen more than 43 percent in the past year on speculation its assets may be broken up and sold to the fixed-line carriers in a government revamp to improve competition in the industry.
“While Unicom is adding more users, it's still far behind China Mobile in terms of users and scale,” Chen Haofei, an analyst at China International Capital, said before earnings were announced. “The industry restructuring may help Unicom as it will be able to focus on one network.” He rates the company's shares “accumulate.”
Unicom's sales climbed 5.8 percent to 25.5 billion yuan. The company's shares rose 2.9 percent to HK$17.18, before the earnings were announced, compared with 1.6 percent gain in the benchmark Hang Seng index.
The mobile carrier, which controls about 33 percent of the nation's wireless-phone market, added 4.5 million users in the first quarter for a total of 167 million. China Mobile increased subscribers 22.8 million in March to 392.1 million.
Fixed-line carriers China Telecom and China Netcom Group have lost phone users for at least eight straight months and have relied on Internet subscribers to bolster earnings.
China, the world's biggest mobile market by users, had 565.2 million wireless-phone subscribers at the end of February and 362.2 million fixed-line customers.
Will China Unicom get back on track?
posted by Charltonmedia.com @ 2:35 AM
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