China Mobile (NYSE: CHL): The Foreign Giant
When most investors think of the telecom sector and wireless providers, Verizon (NYSE: ) and AT&T ( ) come to mind first. These two companies form a duopoly of the domestic market. Market penetration is nearing 90% in the US, so growth is limited, as these two companies are forced to compete for existing clients to survive as well as continue to steal market share from Sprint-Nextel (NYSE: ) and T-Mobile. They are also attempting to jump into unique markets everyday in hopes of adding revenue and improving margins. For instance, VZ and T have been rolling out fiber optic backbones for even faster internet speeds and enhanced TV picture quality. While this appears to be the new generation and face of telecom, there is one company that continues to dominate its traditional market. China Mobile (NYSE: ) has exerted itself as the largest provider in the world, and has dominated its local Chinese Market as well as surrounding regions. This company has proven to be best of breed with a solid fundamental business core, but has great growth potential as its 3G network is still in its initial stage.
Strong Core
China Mobile is truly a monster with a market cap of over $212 billion. They have dominated their domestic markets controlling roughly 70% market share in mainland China. China Mobile
has the world’s largest mobile network in addition to boasting the largest mobile subscriber base with roughly 415 million subscribers in 2008. In addition to all the typical phone features that a network offers, CHL also offers Mobile TV, Mobile search, Mobile mailbox, Mobile map, Mobile advertising, and Mobile payment. China Life boasts a very strong sustainable income, and has dedicated itself to expanding in the future. They have posted tremendous historical growth numbers, with most major CAGR categories in the mid 20’s. Their annual revenue growth has been 25.4% per year; total asset growth has been 20.6% per year. Annual E.P.S.
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