STOCKWATCH: China Mobile higher on technical rebound/futures-led buying

HONG KONG (AFX-ASIA) - China Mobile (Hong Kong) shares were higher on a  technical rebound after recent hefty losses following the falls among its  regional peers, dealers said.      Sentiment was further boosted ahead of tomorrow's futures expiry, with  players more actively buying in heavyweight China Mobile to secure a high  premium in futures, they added.      They said, however, the rally in the stock today was unrelated to news  that the company is looking to acquire 18 mobile phone networks from its  parent, as there were no concrete details of the plan, with players tending  to remain cautious on the latest development in the company's business  outlook.      At 12:05 pm, China Mobile was up 1.60 hkd or 4.70 pct at 35.60 hkd on  volume of 8.53 mln shares.      The Hang Seng Index was up 265.85 points at 12,973.75.      George Chan, an analyst with ICEA Securities, said he sees a technical  rebound in China Mobile.      "The rebound in China Mobile was more attributed to the overnight gains  on Wall Street. Futures-led buying also boosted buying in the company," he  said.     However, volatility in the stock is highly likely to continue amid an  uncertain outlook over the development of China Mobile's regional  counterparts in the near term, he said.      "The stock will trade with continued volatility, moving in tandem with  its telecom peers in the region," he said.      However, its downside is more limited when compared with its peers in  Europe, as China Mobile will not be affected by the negative impact of the 3G  outlook, while China remains an attractive market with an extremely low  penetration rate, he added.      China Mobile will announce its 2000 results on April 9. Chan said he  expects the company to report a net profit of 19.524 bln yuan, up from 4.797  bln yuan in 1999.      "The company's net profit was hampered by a writeoff of its analogue  related business in 1999, while its 2000 figures will be back on track," he  said.      China Mobile said it wroteoff 8.24 bln yuan on its total access  communication system network equipment in 1999.      Chan said he has a "buy" recommendation on the stock, with a 12-month  target price of 52.00 hkd.      "The stock's P/E ratio was around 27 times in 2000, while its current  price shows a P/E multiple of around 21.5," he said.      Looking ahead, Chan said the company's bottom line would not be heavily  affected by the proposed tariff cut in its new packages.      "The company's revenue won't be affected by the proposed cut in tariffs,  as the general reduction in prices will attract more investments. The fall in  average revenue per user (ARPU) will not have much significance, while the  company is likely to see continued fast organic growth," he said.      He said he expects the company's subscriber base to exceed 60 mln by the  end of 2001, compared with more than 50 mln end-February, and 42.8 mln in  November 2000.			

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