China Mobile (NYSE: CHL) to Upgrade to five stars

China Mobile is a leading mobile operator in China and has the world' s largest subscriber. Will wireless newcomer China Telecom live up to its billing as the nemesis of market leader China Mobile? Investors and some analysts seem to think so. But have you notice that enough top-performing CAPS members have turned bullish on China Mobile (NYSE: CHL) recently to upgrade the four-star rank which it has held for months to a more formidable five stars. Many have given their opinion on the telecom services provider, with many of them offering analysis and commentary explaining the recent optimism.

While the global economy has slowed dramatically, China Mobile's 2008 profit still managed to jump nearly 30%, as revenue grew 15.5% to $60 billion. The company added more than 7.3 million subscribers per month last year, reaching 457 million customers. It enjoys a 70% share of China's wireless market, and its sheer size dwarfs domestic rivals, including domestic competitor China Telecom's (NYSE: CHA) 28 million wireless subscribers.

China Mobile even outsizes its international peers, serving more than five times the number of customers of AT&T (NYSE: T), Sprint Nextel (NYSE: S) or Verizon Wireless -- a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD). The company also expects to benefit from China's stimulus spending.

While new competition coming from industry restructuring has some investors concerned, China Mobile barrels ahead with advanced services to differentiate it from new rivals. Nokia Siemens – a joint venture between Nokia (NYSE: NOK) and Siemens -- recently said it completed the second phase of China Mobile's 3G rollout ahead of schedule and many CAPS members think China Mobile will continue to be the clear leader.

For 2009, analysts polled by Thomson Reuters estimate China Mobile will earn $4.23 per share, up just 5%. China Mobile shareholders have been hoping for a boost in dividends, similar to what many U.S. and European phone companies have doled out.

But China Mobile says it plans to keep dividends near their current level, disappointing shareholders. China Telecom said it also plans to maintain dividend levels as is.

Chinese consumers are cutting back on wireless usage, analysts say. China Mobile's 2008 revenue rose 15.5% to $60.4 billion. But analysts estimate that revenue will grow less than 10% this year.

1 comment:

  1. my third comment on Chila mobile posts by you. Excellent. U said is true, china, the incredible


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