After NYSE delisting, China Telecom to list in Shanghai - Android

China Telecom said a Shanghai offering will help it 'establish more flexible and diversified financing channels' and 'improve risk tolerance.'

China Telecom, one of China’s three biggest telecommunications operators, said Tuesday that its board had approved the decision to list its shares on the main board in Shanghai, following its suspension from trading in New York earlier this year.

Why it matters: The move comes after then-President Donald Trump in November signed off on adding China’s three state-backed telecommunication companies to a US investment ban. The New York Stock Exchange (NYSE) in January said it would delist the companies, which also include China Mobile and China Unicom.

• The other two telecom companies are likely to follow China Telecom’s move. The three Chinese state-owned firms all listed simultaneously in New York and Hong Kong. New York-listed shares of the three companies were suspended from trading starting from Jan. 11.

Details: The China Telecom board approved on Monday a proposal to apply for listing the company’s shares on the main board of the Shanghai Stock Exchange, the company said in a filing to the Hong Kong exchange.

• A Shanghai offering will help the company “establish more flexible and diversified financing channels” and utilize “both domestic and overseas capital markets, broaden sources of funds, enhance capital strengths and improve risk tolerance,” according to the filing.
• The company proposed to sell up to 12.09 billion shares in Shanghai, or 13% of its total issued share capital after the offering.
• The company separately reported on Tuesday that its revenue for 2020 grew 4.7% from the previous year to RMB 394 billion (around $60.5 billion) while its net profit grew 1.6% to RMB 20.9 billion.

Context: China Mobile went public in 1997 and was one of the first Chinese state-owned companies to go public in the US, followed by China Unicom in 2000, and China Telecom in 2002.

• The NYSE said on Jan. 6 that it would delist China Mobile, China Telecom, and China Unicom on Jan. 11, citing an executive order signed by Trump in November.
• An increasing number of US-listed Chinese firms are retreating from the American financial market or dual-listing shares on China’s A-share market or in Hong Kong amid recent US-China tensions. They include e-commerce site JD.com, gaming giant NetEase, and online media firm Sina.