Worries about “China Bubble” sent Shanghai down 6.5% but… let’s compare China Mobile (CHL) with Vodafone (VOD) to see who is overvalued. May 30, 2007Posted by deminvest in China Mobile, China stock, CHL, growth stock, investment, Petrochina, PTR, Single stocks, stock I own, stocks, stocks that pay high dividends, VOD, Vodafone.
- 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??”