The Zacks Analyst Blog Highlights:China Mobile, Apple, Nokia, China Unicom and
CHICAGO, Jan. 2, 2013
CHICAGO, Jan. 2, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include China Mobile Limited (NYSE:CHL),
Apple Inc. (Nasdaq:AAPL), Nokia Corporation's (NYSE:NOK), China Unicom Limited
(NYSE:CHU) and China Telecom Corp. (NYSE:CHA).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
China Sets 100M 3G Customers
People's Republic of China – the biggest telecom market in the world by
subscriber base has set an ambitious goal for the forthcoming year.
Additionally, the East Asian country expects 3G subscribers and broadband
Internet to collectively propel growth in 2013. According to China's Ministry
of Industry and Information Technology (MIIT), the country expects to add 100
million 3G subscribers with the number of broadband Internet users to increase
by 25 million in the coming year.
According to International Data Corporation (IDC), the smartphone shipment in
China has hit a new record by adding more than 60 million customers in the
third quarter of 2012, translating into a sequential growth of 38%. Based on
this increased popularity of smartphone, 3G subscription till November 2012
has recorded an annualized growth of 88%.
On the revenue front, the telecommunication industry in China expects an 8%
annual increase, which is even better than the third quarter GDP growth rate
of 7.4%. According to MIIT, the reduction of service fees, improvement of
service quality and allowing more private capital to enter the market have
contributed to the impressive growth.
Moreover, a deeper analysis throws light on the fact that at the end of
November, China had 1.1 billion mobile phone users of which only 220 million
were 3G subscribers. So, this provides a significant opportunity for the
Chinese carriers to tap this under penetrated 3G market.
Recently, China Mobile Limited (NYSE:CHL) the largest wireless carrier in the
world by subscriber base, came up with its 2013 target of selling 100 million
mobile phones in 2013. A potential deal with the world's second largest
smartphone manufacturer – Apple Inc. (Nasdaq:AAPL) to sell iPhone5 was mainly
attributable for this raised guidance.
China Mobile has been in talks with Apple for quite some time in order to
develop a TD-SCDMA iPhone, although nothing has been finalized yet.
Additionally, the company is planning to offer Nokia Corporation's (NYSE:NOK)
Lumia 920T at a very low cost, which is expected to increase its 3G customer
base even further.
Nevertheless, China Mobile, which covers more than half of the Chinese mobile
market, has so far been successful in penetrating only 11% of its huge
subscriber base. Two of its closest rivals, China Unicom Limited (NYSE:CHU)
and China Telecom Corp. (NYSE:CHA), which offer iPhone have a far better 3G
customer concentration than China Mobile. In November 2012, China Telecom and
China Unicom registered 5% and 4.6% sequential growth, respectively.
We believe that with a billion plus population, a steady per capita income and
a higher smartphone adaptation rate, the target to achieve 100 million 3G
customers is quite realistic. Additionally, with a mere 20% 3G penetration
rate along with a probable chance of China Mobile and Apple Inc. joining
hands, the target looks quite reasonable.
China Mobile currently has a Zacks #2 Rank, implying a short-term Buy rating.
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