(Bloomberg) — China Unicom Hong Kong Ltd. is considering an initial public offering for its smart Internet technology division in mainland China, following other state-owned mobile carriers in efforts to raise funds at home after being expelled from the New York stock exchange.
The potential spin-off of China Unicom Smart Connection Technology Ltd. is still pending approval by the board and shareholders, the company said in a statement on Thursday. The time and size of the offering will be determined later, the company said.
The move comes as China’s three dominant wireless carriers seek financing channels to fund their expensive 5G network construction after they were booted from the U.S. bourse due to an executive order by former president Donald Trump. The home market looks increasingly attractive as China cracks down on listings abroad amid rising tensions with the U.S. across issues from data security to trade and the origins of the coronavirus.
China Telecom Seeks $7.3 Billion in World’s Top 2021 Listing
China Mobile Ltd., the world’s largest wireless carrier by subscribers, is planning a 56 billion yuan ($8.6 billion) second listing in Shanghai, while China Telecom Corp. will start trading in the city on Friday in what’s expected to be the world’s largest public offering of 2021 so far. All three companies are also listed in Hong Kong.
China Unicom owns about 69% of Smart Connection, which focuses on high-speed digital applications, like cloud services and big data analysis. Its other strategic investors include FAW Equity Investment (Tianjin) Co. and Dongfeng Asset Management Co., according to the statement. It posted a net income of 67 million yuan last year with an operating revenue of 420 million yuan.
The parent company on Thursday reported a 21% jump in profit to 9.2 billion yuan for the six months through June. It announced an interim dividend of 0.12 yuan per share, up from last year when it didn’t recommend any interim dividend.
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