Yesterday, China Telecom CP H (PINK:CHJHF) stock reminded investors that it is a worthy investment opportunity. The not often traded in millions CHJHF shares recorded the highest yearly trading volume and hit a new 52-week high.
One week after the company announced its optimistic interim financial reports for the first half of 2010, along with a circular about the forthcoming extraordinary general meeting (EGM), the spirit of investors’ willingness to hunt short and long term gains was released out of the bottle.
Last Wednesday, on these company’s updates, CHJHF closed at $0.5151 per share on the pink sheets market, with a heavy volume and a 4.61% price decline.
After a few days of zero bids, CHJHF captured then the price momentum and exploded.
Yesterday, in unison with the Chairman’s statement that “The sustainable development of the Company’s full services operation is gaining momentum”, CHJHF entered the session higher than the last trading session close. Making two new records, CHJHF closed at $0.52 per share on a volume, exceeding fifteen times the average.
At the end of this August, the company and China Telecommunications Corporation have entered into supplemental agreements to renew the Telecom CDMA Lease for a further term of two years. The disseminated circular about the EGM in this connection pushed up the price of the shares not only on the American market.
The CHJHF began to offer mobile service at the end of 2008, using the capacity leased from China Telecommunications Corporation. The Telecom CDMA Lease will expire on the 31st of December, 2010. The renewal of the Telecom CDMA Lease will give the company the exclusive rights to continue using and operating the nationwide CDMA Network, owned by China Telecommunications Corporation.[BANNER]
According to the experts’ opinion, this will support and facilitate the company’s operations and the development of the CDMA Service. Telecom CDMA Lease allows also the company to use the CDMA Network without any immediate payments for the acquisition of related facilities, so that the financial load of the company would be reduced.
The next important fact is that Telecom CDMA Lease grants the company the right to purchase the CDMA Network at any time during the term of the lease, which provides a high degree of flexibility in term of the timing for the company to acquire the CDMA Network, in case the company has such plan.
CDMA is a “Code Division Multiple Access Technology, which is a digital transmission technology that accommodates higher throughput by using various coding sequences to mix and separate voice and data signals for wireless communication, including all upgrades to such technology from time to time expiring on 31 December 2012.”
