- Greenspan, who started out like a guru, after quitting his previous profession, talks about a supposed “China Bubble”.
- Chinese government imposed a tax of 0.4% on every trade on Shanghai stock exchange, to calm it from growing too much.
Those warnings succeeded in sending Shanghai stock markets down 6.5% today… That of course sent European markets down 1% and probably will send Wall Street down at opening too… Good Job!
But… Every-time I look at Chinese company figures, I see they are fairly priced. Often their current growth makes them cheap bargains.
Last week I bought Petrochina, because it was the best buy Oil Company. Now I am looking with great interest at World largest Cell Phone company: China Mobile.
I talked too much! Let’s let numbers sing now:
CHL Market Cap: 181.63B
VOD Market Cap: 182.32B
—> China Mobile is priced exactly like Vodafone, which I own already.
CHL Trailing P/E: 21.20 CHL. Forward P/E: 14.20
VOD Trailing P/E: JUST LOSSES. Forward P/E: 13.10
—> China Mobile: profitable and profits will grow. Vodafone losses now, profits later
CHL Revenue : 38.58B
VOD Revenue: 60.32B
—> Vodafone is larger than China Mobile now…
CHL Qtrly Revenue Growth (yoy):23.30%
VOD Qtrly Revenue Growth (yoy):7.20%
—> … but CHL grows much faster.
CHL Qtrly Earnings Growth (yoy):21.50%
VOD: Not available due to losses
—> CHL seems healthier and more stable
CHL: Total Cash (mrq): 20B, Debt:0
VOD: Total Debt (mrq): 40B
—> China Mobile floats on Billions of $, Vodafone has serious debts
CHL: Forward Annual Dividend Yield: 3.40%
VOD: Forward Annual Dividend Yield: 3.00%
—> China Mobile is paying better dividends, using its cash. Vodafone pays less using its borrowed money.
China Mobile is World leader with more than 300 Million customers, adding more than 4 million new customers every month. 500 Million of Chinese will own a cell phone by the end of July and there is another 500 million Chinese who want it too. Chinese are getting mobile phone contracts without even bothering to have a land-line first.
Vodafone, on the other hand, has a hard time gaining new customers in its mature markets and is forced to do very expensive acquisitions in developing countries to show some growth. Also price-based competition to retain existing customers in Europe is fierce.
I would like to have “Greenspan guru” here now to ask him:
“Which do you think is overpriced??”
BUY, SELL, KEEP 
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