China Mobile, Phone Home

China Mobile, China’s largest mobile telecom operator, is on its way back to being listed on the yuan-denominated A-share market, after floating its shares in the Hong Kong Stock Exchange and the New York Stock Exchange for 10 years.

“We haven’t figured out the exact date, but we will work to bring it back this year,” said Fan Fuchun, Vice Chairman of the China Securities Regulatory Commission.

Analysts believe China Mobile’s return to the mainland is largely spurred by the upcoming licensing of 3G (third generation) mobile technology, which will require a substantial capital supply to build suitable infrastructure.

A 130 percent jump last year on the Shanghai Composite Index built up China Mobile’s confidence in the mainland market. Other so-called red chips, or companies whose main business is done on the mainland but that are listed in Hong Kong, are also finding ways to return. The red chips poised to move back include China National Offshore Oil Corp. Ltd. and China Insurance International Holdings.

Regulators believe the return of the red chips will boost the quality of the mainland stock market and offer more choices for domestic investors.

Beautiful Blushing Brides

Unilever, the global daily consuming producer, intends to join the bidding party for Beijing Dabao Cosmetic Co., a major Chinese cosmetic maker, Frank Braeken, Chairman of Unilever’s China branch, revealed on March 16.

The Chinese cosmetics producer registered with the Beijing Equity Exchange on February 27, starting at a bid of 2.3 billion yuan. The bid includes 83.42-percent state-owned shares and 16.58-percent employee-owned shares.

According to Private Economy News, although Dabao is a leading domestic cosmetic producer, it accounts for a small slice of the cosmetics market in China, only comprising 1 percent of the domestic cosmetic market in 2005.

Another report from Reuters states that last year Dabao posted 41.7 million yuan in net profit on sales of 676.2 million yuan, based on an announcement posted on the Beijing Equity Exchange.

Among the big guns currently showing interest in bidding for Dabao are Avon Products Inc., the world’s largest direct seller of cosmetics, Johnson & Johnson, which also owns Neutrogena, and L’Oreal.

Besides these multinational manufacturers, local cosmetic companies including Guangzhou Liby Enterprises Co. Ltd. and the Nice Group are reported to be keen on the acquisition, according to a report in the Oriental Morning Post.

It may be difficult for these domestics to outbid the multinationals, however. Beijing Dabao Cosmetic Co. has stated that bidding would only begin with a registered investment of more than 20 billion yuan. The bid is scheduled to be completed on March 26, but only if there is a successful bidder at that time, according to the Oriental Morning Post.