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China Mobile, Unicom Stocks Slump After ‘Disappointing’ Earnings

By Matthew Walsh / Oct 22, 2019 04:35 PM / Business & Tech

Photo: VCG

Photo: VCG

Investors are none too happy with China Mobile and China Unicom after the two state-owned telecoms giants posted disheartening earnings reports late on Monday.

Despite adding 7 million customers in the third quarter, China Mobile, the country’s largest carrier, failed to meet analysts’ forecasts with operating revenue of 566.7 billion yuan ($80.1 billion) for the nine months through September, down 0.2% on the same period last year. The company’s profits also slumped 13.9% to 81.8 billion yuan.

It was a similar story over at Unicom, which saw revenues dip 0.7% to 198.5 billion yuan in the first nine months of the year. Although the company’s profit remained comparatively healthy at 9.8 billion yuan — a year-on-year increase of 11.9% — net profit fell below analysts’ forecasts.

Analysts took a somber tone, with one note from Daiwa Capital Markets describing the performances as “disappointing.”

Both companies cited well-worn themes for their travails, including intense competition and market uncertainty. China Unicom also blamed creeping market saturation, a declining 4G data bonus, and a national policy to increase mobile speed and reduce fees.

China Mobile’s Hong Kong stock slumped 1.36% to HK$65.45, and China Unicom fell 3.96% to HK$8.01, as of late in the Tuesday trading day.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: China Mobile CEO Li Yue Resigns

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