ValueInvst's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/278177/comments http://seekingalpha.com/article/99644-china-mobile-looks-like-value-smells-like-growth?source=feed#comment-282238 282238 Tue, 14 Oct 2008 14:11:41 -0400 http://seekingalpha.com/article/99644-china-mobile-looks-like-value-smells-like-growth?source=feed#comment-281236 281236 MIIT). Despite its depressed values, the Chinese want to have its telecom markets appear competitive both internally and in the world arena, and CHL is anything but that. As it grows so does it monopoly power in China's wireless market. As a result, the Chinese government has stepped in and placed asymmetric regulations on network sharing with rivals. This has the effect of allowing smaller competitors to "mooch" off of CHL's strategic network builds (almost for free), which will allow competitors to grow faster at CHL's expense. Furthermore, since CHL is the largest mobile operator in China, the MIIT administration is hard bent on the cultivation and success of TD-SCDMA mobile technology (China's own attempt at 3-G) and having CHL front the majority of the cost. In the meantime, CHL's smaller competitors are free to build better 3-G wireless technology that is more compatible and user-friendly for consumers. Again, competitors may be able to leap frog over CHL's hold on the the mobile market and take market share. Finally, TD technology is not only expensive to build but also requires heavy tailored subsidized mobile product offerings to even entice adaption by users. So, yes, CHL is seeing a lot of cash flow come in, but they are also putting it in the toilet through the TD initiative while competitors are getting stronger. I would suggest you do more work then simple P/E valuation, because the "E" and the implied growth in that multiple matters a lot in this new landscape. I own CHL at an average price of $70 and I hope to make back my money in two years.]]> Mon, 13 Oct 2008 10:23:39 -0400 MIIT). Despite its depressed values, the Chinese want to have its telecom markets appear competitive both internally and in the world arena, and CHL is anything but that. As it grows so does it monopoly power in China's wireless market. As a result, the Chinese government has stepped in and placed asymmetric regulations on network sharing with rivals. This has the effect of allowing smaller competitors to "mooch" off of CHL's strategic network builds (almost for free), which will allow competitors to grow faster at CHL's expense. Furthermore, since CHL is the largest mobile operator in China, the MIIT administration is hard bent on the cultivation and success of TD-SCDMA mobile technology (China's own attempt at 3-G) and having CHL front the majority of the cost. In the meantime, CHL's smaller competitors are free to build better 3-G wireless technology that is more compatible and user-friendly for consumers. Again, competitors may be able to leap frog over CHL's hold on the the mobile market and take market share. Finally, TD technology is not only expensive to build but also requires heavy tailored subsidized mobile product offerings to even entice adaption by users. So, yes, CHL is seeing a lot of cash flow come in, but they are also putting it in the toilet through the TD initiative while competitors are getting stronger. I would suggest you do more work then simple P/E valuation, because the "E" and the implied growth in that multiple matters a lot in this new landscape. I own CHL at an average price of $70 and I hope to make back my money in two years.]]>