China Mobile & China Unicom in HK stock market
➢ China Mobile Brief description:
The company: China Mobile (Stock Exchange of Hong Kong 941) Competitor: China Unicom(Stock Exchange of Hong Kong 762) It’s now estimated that China has more mobile phone users than any other country. According to statistics provided by the Ministry of Information Industry of the PRC, the number of mobile phone owners throughout the country totaled 539 million in November 2007. However, this is only a 41.5% penetration of the enormous population of 13 billion, and signals immense opportunity. Following the rapid growth of China’s per capita income, increasingly more people are finding mobile services affordable, whether they are from rural or urban communities. It is estimated that the mobile service market in China may see an exuberant annual growth of at least 10% to 12%, which will surpass its growth rate for Gross Domestic Product (GDP). Telecommunications has been identified as a strategic industry and is protected by Central Government policy. Despite the ample opportunity for business, the PRC government only allows several state-owned enterprises to operate and, therefore, only a limited degree of competition is possible. Currently, there are only two operators providing a 2G (Second generation) mobile network in China, namely China Mobile (941) and China Unicom (762).
➢ Major accounting policy:
As the stock exchange of Hong Kong listing company, the consolidated financial statements for both China Mobile and China Unicom have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”). Revenue comprises the fair value of the consideration received or receivable for the services and sales of telecommunications products in the ordinary course of the Group’s activities for both China Mobile and China Unicom. Inventories cost is based on the weighted...