China Mobile Shuffle: Sea Change Coming? 中移动高层变动或引发重大变化？

By newsdoug on September 30, 2011

New China Mobile leaders feel pressure to be more generous There’s been a flurry of noise this week from both the boardroom and from shareholders of China Mobile (HKEx: 941; NYSE: CHL), in the latest signs that long-serving conservative Chairman Wang Jianzhou will soon retire to bring in younger blood and new ideas. What’s most interesting here is that shareholders are taking advantage of the situation to make their case for bigger dividends from cash-rich China Mobile, as well as a more aggressive M&A policy — both of which could help to boost the company’s stagnant shares if the new top managers take notice. Domestic media are reporting that China Mobile’s state-run parent has just formed a new 9-member board, which includes Wang as chairman and his two heirs-apparent, Xi Guohua and Li Yue, as board members, along with 5 outside directors. (Chinese article) The inclusion of Wang’s two successors, along with so many outside directors, is the latest indication that Beijing is looking to bring some new ideas to China Mobile after the departure of Wang, whose 5 years at the top of the company saw it consolidate its market-leading position but do little else to expand its business. Investors, sensing that change is coming soon, have suddenly started clamoring for China Mobile, which has a cash pot of $50 billion, to use that money to pay out more dividends and assume a more aggressive global M&A policy. (Chinese article) Investors have made similar calls from time to time over the years, but most of those have failed to sway Wang, who seems to come from the old school that believes you can never save enough cash. Xi and Li both come from technical backgrounds and don’t really look like a bold new generation of leaders that China Mobile really needs to bring back some excitement to the company. But that said, they certainly can’t be more conservative than Wang, and I wouldn’t be surprised to see the company boost its dividend payout ratio and also pursue some interesting global M&A once Wang retires, which could happen by the end of this year.

Bottom line: China Mobile’s new leaders are likely to return more cash to investors and pursue a more aggressive M&A strategy after the company’s current conservative chairman retires.

本周不断传来关於中国移动<0941.HK; CHL.N>董事会和股东们的消息，最新迹象显示中移动董事长王建宙或很快退休，让位给新人，也为公司带来新的思路。最有趣的是，中移动的股东们正借此希望谋求更多红利以及希望公司实行更积极的并购政策。如果新管理层对此买账，这将有助於提振公司表现不佳的股价。国内媒体近日报导称，中移动母公司成立了由九位成员组成的董事会，其中包括该公司董事长王建宙、副董事长奚国华和董事兼总经理李跃，还有另外五名外部董事。将王建宙的两名接班人及如此众多的外部董事纳入董事会的举动也再次说明，中国政府正考虑在王建宙离任後为中移动带来新鲜血液。在王建宙任职期间，中移动强化了其市场领头羊地位，但在扩大业务方面几无建树。嗅到这种变动气息的投资者们突然开始纷纷要求中移动将持有的500亿美元现金返还给投资者，以及寻求收购资产。投资者们过去几年不时提出过类似要求，但多数未能动摇王建宙。王建宙似乎比较保守，认为现金再多也不为过。奚国华和李跃均为工科背景，似乎也不属於那种作风大胆的新一代领导人，但他们肯定也不会比王建宙更保守。一旦王建宙退休，如果中移动开始提高股息派发率且进行一些有趣的全球并购，我不会感到意外。

一句话：中移动的新领导很可能在现任董事长王建宙退休後，向投资者返还更多资金，并实行更积极的并购策略。

Enjoy this blog? Please spread the word :)