China Telecom, the country's second-largest mobile operator, surged as much as 44 per cent, the daily limit, over its offer price of 4.53 yuan (€0.60) in its market debut in Shanghai.
The rise, which at one point triggered a 30-minute trading halt, cemented its status as the world’s biggest listing so far in 2021, exceeding the $6.3 billion initial public offering by TikTok-rival Kuaishou Technology in Hong Kong in February.
The surge indicates enthusiasm in the markets for China’s push to build the world’s largest 5G networks – and monetise the high-speed technology behind them.
China Telecom has sought more diversified financing channels after the US removed the company and two other Chinese wireless giants from the New York Stock Exchange following an executive order by former president Donald Trump.
China Telecom could be followed by more listings by Chinese companies in the mainland or Hong Kong, as Beijing extends a crackdown on local firms listing abroad.
China Mobile, the world's largest mobile operator by subscribers, is also seeking a second listing in Shanghai, planning to raise 56 billion yuan to invest in projects including 5G networks. China Unicom Hong Kong announced on Thursday that it was considering a mainland listing for its technology arm.
While the three companies are seeing a recovery in subscriber addition and user revenue, China Telecom is growing the fastest, with 11.5 million new customers in the first half of the year. China Mobile had 3.6 million users and China Unicom added 4.6 million.
Unlike China Mobile – which has been building 5G networks mostly on its own – China Telecom co-develops its infrastructure with China Unicom, putting less pressure on its budget.
China Telecom could also see accelerating sales growth from its enterprise and industrial digitalisation businesses as it looks to diversify, driven by increasing demand for cloud and data centre services, Bloomberg Intelligence analyst Anthea Lai said in a note earlier this month.
Proceeds from the new listing will be used to develop 5G infrastructure and applications, cloud businesses and further research and development, according to China Telecom’s filing to the Shanghai stock exchange.
