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Shares of cellular service provider China Mobile (CHL) are up over 1% on the day after reporting a 28% year over year increase in net profit for 2005 driven by strong subscriber growth. Although the company may not be familiar to many Americans, CHL is actually the largest cellular carrier in the world, as measured by subscriber base. It completely dominates the Chinese market with an estimated two-thirds market share. In this business, size matters because it allows companies to spread high equipment costs over the largest number of users.

Going forward China Mobile may be challenged to keep up its high growth rate and by expensive capital expenditures — but the company may still make for a profitable investment. According to Yahoo Finance, CHL has an operating margin of 29.2%, a forward dividend yield of 3%, and a balance sheet with $11.83 billion in cash and only $2.35 billion in debt. With a forward P/E ratio of 14.4, shares don’t look that expensive either.

If you are interested in piggybacking on China’s growth, owning shares of a reasonably priced company that dominates an important sector with high margins, a strong balance sheet, and an attractive dividend could be a smart play.

Related: China Mobile Beats Estimates; Reports Continued Strong Growth in Urban Areas; Stock Up 1% in Early Trading

Source: China Mobile: A Smart Way To Capture Chinese Growth (CHL)