Shutterstock photo
Markets

China Mobile may be a touch undervalued here

Shutterstock photo

Shutterstock photo

In the battle of the Chinese telecom giants, China Mobile may have a small upper hand. At least, analysts think this stock has slightly more upside to deliver than its rivals. CHL ( quote ) is spending a lot more money to build out its wireless network and capture more smartphone customers. China Telecom ( CHA , quote ), as far as anyone can tell, is not. Instead, CHA is expanding its existing wireline broadband platform at a rate of about 1 million customers a month, and letting the wireless data side of its business happen -- or not -- at its own pace. Meanwhile, CHL is taking the hard step of spending $1.5 billion on wireless hotspots within China to help members of its mobile data network get better service. But the difference is that CHL is adding 2.39 million 3G mobile data customers a month, while CHA's wireline broadband growth is slowing. And even though some investors wanted to see CHL use that $1.5 billion to increase its dividend, the company already pays an effective yield of 4%. Neither company is a real dog. Some analysts expect CHA shares to climb all the way to $68 in New York, which would reflect roughly a 15% boost in the remainder of the year. On the other hand, those same analysts think CHL could climb almost 19% over the same period, which would take that stock well over $53.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CHL CHA

Other Topics

Stocks

Latest Markets Videos