Buying China Mobile shares might be a good idea this February

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Jan 26, 2021
  • China Mobile offers a very good opportunity for investors
  • The current 6.9% dividend yield makes it one of the region's steadier players
  • China Mobile mobile shares have been delisted from the New York Stock Exchange

China Mobile mobile shares have been delisted from the New York Stock Exchange since January 11. Since then, China Mobile mobile shares remain under pressure on the other stock exchanges even though investors in this company stand to gain a lot more for taking a comparatively smaller risk.

Fundamental analysis: China Mobile shares are trading at less than eight times forward earnings

In November, Donald Trump has signed an order that bans U.S. investors from buying Chinese companies that the U.S. said supported China’s military, intelligence and security services.

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At the beginning of January, New York Stock Exchange confirmed that it would delist China Mobile and other Chinese telecoms. Last week, the company filed a request in Hong Kong asking the New York Stock Exchange to reverse its decision to delist their American depositary receipts.

If the New York Stock Exchange changes its decision in the meantime, that will undoubtedly be positive news for this company’s shareholders.

“Removal of stock from a major exchange doesn’t mean investors can’t trade it, but it comes with greater risk. Shares go “over-the-counter,” meaning they’re outside the system of major financial institutions and cannot guarantee sellers will quickly find a buyer without losing money,” said an analyst from Forbes.

Investors from the U.S. have access to China Mobile on the OTC market, but this usually results in low-volume trading. I continue to believe that China Mobile offers an excellent opportunity for investors, and maybe now would be a good time to invest in shares of this company.

The company has reached 950 million mobile customers, and it will continue to expand its market share. China Mobile shares are trading at less than eight times forward earnings, and the current 6.9% dividend yield makes it one of the region’s steadier players.

Technical analysis: China Mobile shares remain in a bear market

Data source: tradingview.com

China Mobile shares have an excellent risk/reward ratio, and investors in this company stand to gain a lot more for taking a comparatively smaller risk. The current supports levels are €4.5, and €4, €5.5 and €6 represent the current resistance levels.

If the price jumps above €5.5 resistance, it would be a signal to trade China Mobile shares, and the price next target could be around €6. If the price falls in the upcoming period, every price range from €4.5- €4 could be a very good opportunity to invest in China Mobile shares.

Summary

China Mobile shares are trading near 10-years lows after the New York Stock Exchange delisted shares of this company. Despite this, the current price level represents good value for what you pay, and maybe now could be the right moment to buy China Mobile shares. Donald Trump has signed an order that bans U.S. investors from buying Chinese companies that supports China’s military. China Mobile has asked the NYSE to reverse its decision, but the relationship between the U.S. and China continues to be tense. The new U.S. president, Joe Biden, will have difficulty handling financial flows and relations with China.

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