China Mobile Hong Kong (CHL)

Doesn’t own any telcos. He does like the Chinese market and he is a believer in the China story and that it will be successful, so this company will probably perform.

The positive is that they have signed an agreement with Apple (APPL-Q), but the percentage of its subscribers that can afford Apple is not that great. Shanghai stock market has done very, very poorly and continues to do so and they are inextricably tied into that.

Biggest mobile company in the world. Gone sideways for 5 years. Dividend is safe. Longer term if you hold this, you will be proven to be right.

The fundamental story on this is that it is, by far and away, the biggest global telecom company. Doing very, very well. Fundamentally, the Chinese government is trying to regulate, to ensure that China Telecom and China Unicom become much more significant in the market, but taking away some of the power that this company has. China also regulated that this company adopt a “list of quality” strategy for wireless telecom and that really didn’t work out. Stock has not moved very well in the last few years but if you take a longer-term view this is a very good story and a dividend is very safe. You can also buy it in the low $40. Solid in the high $50 but, once it breaks out above $55, it will run for quite a while.

$200 billion market cap. He has never been a huge fan of the company. You always want to minimize government intervention and it combines to compound regulatory risk. Their earnings growth has not been that great.

(Market Call Minute.) A dreadful performer but are continuing to add large numbers of new subscribers.

Fairly expensive. You buy this in the $48-$49 range. Pays a very attractive dividend. Has substantially more cash than debt, so the sustainability of the 4.2% dividend is almost guaranteed. The big challenge is that they are transitioning into a company that can support the iPhone. They need to transition the network and they have the capital to do it.

Not sure about the mobile market in China right now. A very competitive space. They have been frustrating stock for investors. When the hang sang break out, this could push higher than you think.

Biggest telephone company globally and has no debt. Good dividend. Price for this ranges anywhere between $47 and $56. With this you are taking a longer-term view because the average Chinese is going to get wealthier over time and telephone companies are going figure out how to take a portion of that income.

Good quality company and the biggest mobile operator globally however, there is not a lot of growth. Earnings might even decline this year and next. Once they get through the move and migrate to 4G, you’ll start to see a pickup in earnings. Have a good relationship with their parent. They only have to pay for the infrastructure of additions for 4G, they don’t have to pay for the infrastructure of 3G, so their cost base is good.

Has the largest mobile user base globally. Revenues per user are much more stable than they have been in the past. A big subscriber base that moves from 3G to 4G is going to help them a lot on the data side. The good news on the 4G is that they are not going to have to spend the capital that is going to be spent by the parent. Very good returns and well managed company.