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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (38023)	2/9/2011 11:23:48 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78466

re CHL - took a starter in CHL @48.3$ today. I like CHL because they have the largest market share in China (60%+) and adding customers at a decent clip (10%+ net additions). My investment thesis: 1) Smartphones will come to China and ARPU will go up 2) Their huge market share and the economies of scale that go with it will give CHL a cost advantage that translates into a high profit as it has in the past 3) Slow RMB appreciation will provide some extra appreciation since all of CHL revenues are domestic (for those that calculate gains in US$ that is) 4) Attractive valuation (11x earnings) and very robust balance sheet no net debt 5) Proven management Negatives: 1) Government interventions almost a possibility 2) Investment in Banks (Pudong Bank, see above) That said, I did notice that CHL profit growth has slowed ( their profit margin shrank somewhat from 51% to 50%)