(Bloomberg) — China Telecom Corp., the country’s second largest mobile operator, jumped 5.7% above its offer price as the world’s biggest listing so far this year debuted in Shanghai on Friday.
Shares opened at 4.79 yuan ($0.75) on Friday, compared with the listing price of 4.53 yuan. That exceeded the $6.3 billion initial public offering by TikTok-rival Kuaishou Technology in Hong Kong in February.
Though gains pared in morning trading, the jump indicates enthusiasm in the markets for China’s push to build the world’s largest 5G networks — and monetize the high-speed technology behind them. China Telecom has sought more diversified financing channels after the U.S. 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.
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China Mobile Ltd., 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 Ltd. announced on Thursday that it’s 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 digitalization businesses as it looks to diversify, driven by increasing demand for cloud and data center 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.
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