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

To: Spekulatius who wrote (41373)	3/19/2011 7:07:46 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78468

I am adding more to CHL @ 45$. Somewhat disappointing earning report, even though that was more or less expected. Earnings/share 5.96rmb (+5%), revenues up 11.8$ (so margins went down a bit). The competition has caught up with them somewhat because they use a chinese grown 3G system (government mandated) that is not quite competitive. but still they have by far the largest network, the most subscribers and the highest profitability. Also, for the next generation data network, they are going to deploy LTE, which is considered the best in class technology for 4G. PE is about 11.5 and they have substantial net cash on the balance sheet. My investment thesis is that this is a utility with a wide moat (largest network) in a country with appreciating currency (I expect 5%+ headwind from RMB appreciation annually), high single digit growth with a potential boost from higher data penetration (smartphones) and a 3.4% dividend yield currently. I think with 3.4% (dividend yield) + 5% RMB appreciation +8% growth ~15% annually is quite possible, even if the currently depressed multiple does not expand. chinamobileltd.com