China Mobile Goes Wild!

  • Posted by
  • on March 15th, 2012

Not really, but the world’s largest telecom posts ok sales and profit gains in 2011. Apple deal next?

 

2 year (Y! Finance)

 

Without much fanfare, China Mobile ($CHL) released their fiscal 2011 earnings this morning. Nothing fancy, about what you’d expect from a massive company ($218 bil market cap) with the world’s largest mobile network. Ho hum. But mention the word Apple ($AAPL) and suddenly things get interesting real quick like.

Last summer rumors began to leak of an AAPL-CHL deal as Tim Cook was scheduled to make the rounds with CHL execs. Since then bits and pieces of a collaboration have filtered out occasionally, but nothing official has ever been released.

This morning though, in a fresh piece from CNBC, an analyst from HSBC thinks an iPhone deal later this year could really help boost CHL sales. That’s a no-brainer, but if an official contract ever gets signed, both Apple and China Mobile stand to benefit mightily, especially since CHL has a customer base approaching 650 million, with 51 million of those being 3G users.

On to the earnings! Results for full year 2011:

  • Operating revenue +8.8%
  • Net income +5.2%
  • EBITDA +4.9%
  • Customer base +11%
  • Voice usage volume +12%
  • Data services rev +15%
  • Wireless data traffic rev +45%

From management about future growth potential:

“Steady macro-economic growth and rapid transitions in China’s economic structure and consumer spending patterns will not only continuously stimulate demand for traditional telecommunications services, but also boost demand for new models of information consumption. The information communications service market contains tremendous growth potential…With the government’s support of home-grown technologies and innovation, the development of TD-LTE technology has achieved a new breakthrough, and its commercialization and industrialization will inject new energy into our future growth.”

Ranked 29th in the BeanScreen this month, we’ve owned CHL for more than two years, last picking up shares in May 2011 at $44.52.

After digesting these new numbers, we may be adding again soon, especially if Apple comes a callin’.

 

 

sources:  China Mobile profit up 5.2% – MarketWatch

China Corporate News: China Mobile Revenue Up 9% in 2011; Sinopec to Take More Assets from Parent – The China Perspective

iPhone Can Lift China Mobile Sales by 12% in 2014: Pro – CNBC

Apple in Talks with China MobileWall Street Bean

China Mobile

disclosure:  we currently own shares in CHL and AAPL

 

 


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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