China Mobile Ltd. (ADR) (CHL)

Still huge potential in people mass. Bougt in Q1/2005 at 15,50$. Will wait at least till the Olympic Games, maybe till the World Exibitiion in 09.

The stock still has some potential to grow.

And the dividend is not that bad at all.

“What can be bigger than this?” gestures China Mobile Ltd.’s image in the telecom industry. The company offers a full range of wireless telecommunications and associated value-added services throughout mainland China. With a 250 million-subscriber base and a market share of 65%, China Mobile dominates the telecommunication market in China, while its primary competitor, China Unicom, handles a modest 30% share.

China's telecommunications market has witnessed strong growth recently, with cellular penetration increasing from 3% to 30% over the past six years. However, considering the fact that nearly 55% of China's population lives in rural areas, the market's raging growth is bound to slow down. Nevertheless, it is believed that China is one of the most attractive telecommunication markets and provides adequate room to the players to nurture.

Compared to its competitors, China Mobile continues to add subscribers more quickly, and is expected to continue this trend in future as well. In 2005, China Mobile's new subscribers accounted for about 73% of new-adds nationwide. Voice value-added services and data services have become increasingly important revenue drivers in recent years. Going forward, stable average revenue per user (ARPU) and improved churn rates are likely to boost the company’s fundamentals.

With the transition toward 3G technology, the telecom sector of the country is on the verge to enter a new phase. The company hopes to encash the same to boost its financial performance. However, ironically, it also benefits from the delayed third-generation (3G) wireless license grants by the government, and tries to attract more wireless users during the interim, before fixed-line carriers and other new players can provide mobile services. Consequently, the company has started tapping smaller cities. Despite the fact that the profitability will be somewhat affected, the company should continue to see healthy operating margins given that small cities offer a sizable market for the company.

China Mobile benefits from its strong network and regional position. Therefore, its growth prospects can be viewed favorably versus other peer members, justifying its P/E multiple and a high operating margin. While the stock price is up sharply from its low point early this year, increasing confidence in near term numbers favorably support the share price.

I have a very small number of Large Cap stocks in my folio and this is my only Mega Cap pick. Attractive buy opportunity as this is near it's 52 week low, of course I would have loved to have picked this at $35-38, but nobody is perfect. The Telecommunication market should continue to grow nicely in China as their middle-class expands. And as I said my primary focus is on Small Caps, so that means that this really has to shine for me to pick it to outperform.

Looking for 40+ by year end.
1) Dominant market leader in China.
2) Largest Cell Phone Provider in the world.
3) Growing by 18%+ year after year.
4) Only 30% penetration.
5) Fastest growing economy.

This stock will outperform the market becasue it is the first company to offer black berry service on main land China. This is a huge draw and will further enhance China Mobile's strong position as a market leader in the region.

Market tested leader in China's nascent wireless arena. Company should maintain its competitive position over the near term. .

Government expected to soon to auction off its highly anticipated 3G licenses which should bring increased competition into play. Expectation is that this will happen in the first half of 2007, so competition should intensify over the longer term as it will take new entrants time to gain footing in this space.

To this end, the company has done well as is market tested ... newer entrants may falter due to their inexperience.

Profit for the first half of the year ending 6/30/06, up 25.5 percent to 3.8 Billion US dollars. Revenue up 20% to 14.4 billion US dollars. Subscriber growth of 25.8 million to 274 million. Cash over the last 2004 and 2005 years has increased 23 and 57 percent respectively to 13.2 billion US dollars.
There are caveats, this is China, I think data is sometimes questionable. They are having trouble getting out their 3G wireless platform, which is awaiting regulatory approval.

The real opportunities for Asia telcos are likely to be in the developing economies of China and India.

*1.5 billion people in rural Asia with china and India accounting for 90% of the total. This is an opportunity and a challenge. The challenge being that covering rural areas is expensive and mainly unprofitable.

*Urbanisation is relatively low in both countries but expanding rapidly. Urbanisation drives the demand for communication services higher and the costs lower.

*Real incomes are rising

*The costs of equipment and handset prices are falling.

China Mobile

China Mobile is the dominate player in the Chinese market and claims that it's network can reach 98% of the population. 3G licencess are due to be issued in 2007 (in time for roll out before Olympics) and China mobile is well positioned. China mobile has had a great run this year and the valuation does not look cheap but this is a growth story.

Largest mobile operator in one of the world's few remaining fast-growing markets (and the largest market, at that). The continued rise of a middle-class in China will fuel their growth, with the upcoming Olympics accelerating the process.

With the State being the majority owner and the State already indicated that China Mobile is the "preferred carrier", how can this stock perform poorly? Three years ago the government switched management from China Mobile to China Unicom and vice versa, the results are the same.

Heh heh, I'm really going against the grain on this one but I live in China so I'll put in my two cents. Mobile is a not a bad stock to own, but I don't think its quite as golden as everybody seems to think.

1. So-so service, High price.

There is no denying that China Mobile is the carrier of choice in China over China Unicom right now. Most of my friends use it and so do I, and this in spite of the fact that China Unicom is cheaper...a good deal cheaper. So why do people pay more more money? Out of vague sense that they're getting a better product, something Chinese people care more and more about.

Except, that its mostly hype. Though China Mobile does offer better reception in the Chinese countryside, the reception in all ciites is pretty much the same. Given that the trend in China is DEFINITELYtoward cities and away from rural areas, and that most of the middle class people that are using this service are urbanites and not poor farmers, I expect the perception of "better quality" to give way to reality sometime in the future. And especially since China Mobile's reception is often less than satisfactory in my city anyway, I'm gonna go ahead and switch and save some money real soon. Did I mention there are no penalties for switching and that China Unicom is cheaper...a lot cheaper?

2. Government Influence

China Mobile has definitely benefitted from being in communist country where the government owns most of the big industries still and barriers to entry are high. I think they had any real competition they'd be in a bit of trouble. However, the government has expressed that it would prefer for there to be more balance in the mobile industry. What the goverment wants, the governmemt usually gets, and whether it comes from bringing China Telecom into the mix, creating a merger to bulk up Unicom or whatever, I think rumors will at some point become reality and the government will take further steps to level the playing field.

Even with all this, CHL will probably be alright. But even though its in China and the market is huge, its hard for me to give a thumbs up to a company that overcharges for so-so service and outdated technology, but suceeds because people don't have access to much else. That my take on it.

But as I'll be switching soon, I'm somewhat biased=)

Mobil phone company in HK-China.

Every young chinese wants a phone.
There are not many phonelines in China.
This is the biggest Chinese wireless phone company.

I'm surprised that CHL hasn't been big up even higher in the last year. Should climb higher. Reasonable p/e for a tech distributor, especially considering the rage for China investments.. Huge and growing market.

Imagine about a Billion people needing or wanting to talk to each other? Well there's the market for China Mobile. Need i say more? If you don't think of $, and hear the sounds of a cash register, then you have a problem

China, china, china... I'm thinking there may be just a bit too much speculation going on here.

The numbers for this stock look so good one has to wonder what the catch is. With substantial governmnent interest and a favored position in a large and growing market, a great deal of cash and relatively little debt, CHL has an especially wide moat. They have an active and apparently competent management, starting to make strategically intelligent investments in suitable telcom companies in the region. I noted in one company report that they have elected to expense stock options for the sake of transparency and to appeal to western investors, a step which man US companies are still resisting. Add to that a respectable dividend, and the recent dip in price was too good to pass up. I bought as many shares as I thought I could afford.

With such a growing market in China, this company is bound to continue growing into more rural areas and develop communication networks for the mass population in china. With so many people in china, there is surely plenty of room for this company to continue growth and provide great options. Eventually, I think we'll see

Not enough wire in the world to connect everyone in China. Wireless is the only option. They have an early lead that should generate good returns for years.

They do a fine job of turning assets to equity.