A woman plays an interactive dance game at the booth of China Mobile during the Light of Internet Expo in Wuzhen, East China's Zhejiang Province. File photo: Xinhua

China Mobile, a major mobile carrier, became the most valuable stock on the A-share market on Monday morning, beating top distiller Kweichow Moutai, as investors bet on the blossoming digital transformation in the world's second-largest economy.

During the morning session, shares of China Mobile were up by more than 4 percent at one point, pushing its market capitalization to 2.19 trillion yuan ($319 billion).

The market cap of Kweichow Moutai came in at 2.18 trillion yuan.

As of Monday's closing, China Mobile's shares had risen 4.59 percent.

Previously, China's largest oil and gas producer PetroChina, state-owned lender Industrial and Commercial Bank of China and Kweichow Moutai had all ranked first in the onshore stock market at different times. 

"The performance of China Mobile was within expectations, as its shares had been closing in on those of Kweichow Moutai since mid-March," Liu Dingding, a Beijing-based tech analyst, told the Global Times on Monday.

With the nation's digital push on track, it is bound to boost demand at the infrastructure level where companies like China Mobile have abundant experience, Liu said.

China will strengthen policymaking and institutional building, take forward-looking steps in building its digital infrastructure, foster the innovation and development of digital industries, speed up its digital transformation, upgrade digital public services, and deepen international cooperation, the National Development and Reform Commission, China's top economic planner, said in a statement earlier this month.

A national plan for the overall layout of digital development was released in February, which said that important progress would be made in the construction of a digital China by 2025. 

By 2035, China will be at the global forefront in terms of digital development, and digital progress in the economic, political, cultural, social and environmental fields will be more coordinated and sufficient, according to the plan.

"As we can see from the changes of the most valuable firms on the A-share market, investors are rooting for the company that is better aligned with the nation's strategic deployment," Liu said.

China Mobile's achievement is also inseparable from its own ability to make a profit. 

Climbing to the top of the market shows that its transformation from a traditional mobile operator to a technology-driven centrally administered state-owned enterprise in the digital economy over recent years has been well accepted by the market, according to Liu.

Profit stood at 125.5 billion yuan last year, up 8 percent, and earnings per share stood at 5.88 yuan, according to an earnings statement in March. Its profitability remained in a leading position among top-tier global telecommunications operators.

Chinese operators represented by China Mobile are showing new vitality in the mobile communication industry, and their new value is gradually being recognized by investors, experts said.

In their 2022 financial reports, the three major operators - China Mobile, China Unicom and China Telecom - all emphasized cutting-edge technology concepts such as computing power networks and artificial intelligence, amid their efforts to downplay their operator labels and strengthen their attributes of technological innovation.

Yang Jie, the company chairman, said during the earnings call that China Mobile's capabilities in natural language processing (neural networks), deep learning, machine vision and other aspects generated more than 3 billion yuan last year. 

"We have now built a computing power network, which will definitely play a huge role in artificial intelligence computing power… In terms of operation, maintenance and customer service, China Mobile has realized the extensive use of artificial intelligence," Yang said.

"Investors can no longer look at China Unicom with old eyes, nor can they look at the information and communication industry with old eyes. Our company is transforming from a traditional operator into a technologically innovative enterprise embracing the digital economy," Liu Liehong, chairman of the company, said during its earnings call.

China Mobile's rise to the leading A-share spot is related to the market's preference for a valuation system with Chinese characteristics, a term coined by China Securities Regulatory Commission Chairman Yi Huiman at the Financial Street Forum annual conference in November last year.

As the reform of centrally administered SOEs steps up, the sentiment of the capital market has undergone a qualitative change, bringing values back to a reasonable level, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Monday.

"The board featuring the valuation system has gained popularity among investors since the start of the year, and more and more indexes focused on centrally administered SOEs were born accordingly," Yang said.

Hang Seng Indexes Co launched on Monday the Hang Seng China Central SOEs Index. The new index is a market-cap weighted index that reflects the overall performance of stocks listed in Hong Kong with Chinese centrally administered SOEs as the largest shareholder.