China Mobile stock struggles as analysts cut ratings
29 August 2008
China Mobile's Hong Kong-listed shares fell to a one-year low on Thursday after analysts cut their ratings on the stock, Bloomberg reported. Shares in the company closed down 6.3% at HK$90.45 (US$11.59), which dragged the Hang Seng Index down 2.3%. JPMorgan reduced its rating on China Mobile to "underweight" from "overweight" while DBS Vickers downgraded to "hold" from "buy." The company posted first-half profits of US$4.5 billion, up 45% year-on-year, as lower prices brought in record numbers of users. However, the brokerages believe cuts in call charges (the government ordered a reduction in long-distance domestic call tariffs in February) and rising competition – linked to the telecom industry restructuring – will put China Mobile under pressure. The company noted in its earnings report that average revenue per user fell to US$12.30 per month in the first half, from US$12.88 a year earlier.