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China Mobile
Ticker: 0941.HK
Price: HKD56.95
Company News
When China Mobile snapped up a New Territories industrial site for HK$3.6 billion ($46 million) at a government auction last month, the mainland telecom giant outbid its closest competitor by 56 percent, according to an announcement by the Lands Department on 7 July.
Through a subsidiary, the world’s largest wireless network operator agreed to pay a HK$5.6 billion ($722.6 million) premium over the auction minimum to secure 50-year land use rights for the industrial parcel at the junction of Tsung Tau Ha Road and Kwei Tei Street in Sha Tin.
The successful offer was 70 percent higher than the HK$3.28 billion offered by the third highest bidder, according to the Lands Department, with China Mobile outbidding some of Hong Kong’s biggest developers for what is expected to become a data centre facility in the northern New Territories.
Among the unsuccessful bidders were local heavyweights including Li Ka-shing’s CK Asset Holdings, the Kwok family’s Sun Hung Kai Properties, and Joseph Lau’s Chinese Estates Holdings. Singaporean state-controlled Mapletree Investments Pte also made a bid that fell short of China Mobile’s offer.
The lowest bid offered HK$738 million for the property located five minutes’ walk from Fo Tan MTR station.
Data Centres in Vogue
With the capacity to yield up to 940,000 square feet (87,328 square metres) of gross floor area, China Mobile is paying the equivalent of HK$5,967 per square foot for the project, making it the most expensive industrial site sold in Hong Kong over the last two years.
With a market cap of HK$1.15 trillion and roughly 950 million mobile users according to its 2019 annual report, the Beijing-headquartered company’s burgeoning 5G communications service is likely the primary driver behind the bid. In April, China Mobile rolled out extensive 5G coverage in Hong Kong, which will require more servers and computer systems to operate.
For investors and end-users alike, data centres have become prized assets in 2020. Just last month US data centre REIT Digital Realty broke ground on its second server facility in Hong Kong, on its way to adding 24 MW to its capacity in the city.
That Hong Kong project came just months after Alibaba Cloud, a networking division of the mainland e-commerce giant, in April announced plans to put $28 billion into data centres and other types of cloud infrastructure over the next three years.
Once the Sha Tin data center is finished, China Mobile will add the new server shed to a pair of facilities completed in London and Singapore within the past year. The telecom operator already has an existing data centre in Hong Kong’s Tseung Kwan O area.
Price Performance
Relative Valuation
Technical Indicators
Overall, the bias in prices is: Upwards.
The projected upper bound is: 59.92.
The projected lower bound is: 54.04.
The projected closing price is: 56.98.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 19 white candles and 29 black candles for a net of 10 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 86.6667. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 16 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 62.92. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 97 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 176.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 7 period(s) ago.
Rex Takasugi – TD Profile
CHINA MOBILE closed up 0.200 at 56.950. Volume was 10% below average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume 56.500 57.200 55.500 56.950 21,579,888
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 54.62 54.42 59.69 Volatility: 31 34 38 Volume: 20,638,078 22,207,146 22,791,974
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
CHINA MOBILE is currently 4.6% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.
Our volume indicators reflect volume flowing into and out of 0941.HK at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on 0941.HK and have had this outlook for the last 4 periods.
