China Telecom and Netcom....It's up to both of them to continue invest in XIAOLINGTONG or not.
For 2004 EARNING and EPS is locked...and Q1 of 2005(THIS is base on backlog and order so far...thing will change if they continue to get order....)
CEO of CHINA MOBILE & UNICOM will not rush in for 3G(BOTH indicate that coexistence will last for a long time....Why they said that...
THEY want to get the money they invest back...)
Both CHA and NETCOM continues growth for XIAOLINGTONG and BROADBAND for 2004...NEWS on those already out and every investor know about it. Xiaolingtong is the product of people choice right now in CHINA and MII allow both operator to go in BEIJING and SHANGHAI and demand CHL and CHU to open up SMS.
Report that PAS allocate the spectrum for 3G is correct but only a small portion of that spectrum and will not conflict with 3G because 3g use the upper spectrum....but TD-SCDMA may have problem....will learn more when TD-SCDMA go on trial testing this MAY.
History of 3G in the world:HOW MANY OPERATOR REALLY MAKE MONEY====>NONE.
One of MII member state:
"If there is no demand now you better not put on the market....The consumer base on CHINA did not have as much potential for the technology....CHINA social revolution is incomplete and not an industrialized country. The majority of CHINA population still reside in country side in very poor condition."
"If XIAOLINGTONG is appear the people choice then let it growth....How many telco tech out there you can give the basis to the people...
80% of the 1,3B peoples make less than $90 US a month...."
So look like we have mix signal from CHINA...That i think the biggest reason UTSI is in the down trend....Funds & Big BOY are not support the stock.
I am taking a big risk for now...will see..
"CEO of CHINA MOBILE & UNICOM will not rush in for 3G..."
It really looks like they're in trouble either way.
Scenario 1) They don't invest in 3G, but CT/N do. CT/N then have XLT to cannibalize the lower end of the cell market, and 3G to skim off the top. Where will CM/U's customer base be then? Just dual-mode customers, who spend the majority of their ARPU on XLT?
Scenario 2) They invest in 3G to compete with CT/N, and write off the remainder of their 2G investments. Looks bad on the books--but maybe that way they survive.
Best all around for CM/U? No 3G licenses for a lot longer than 1H05...
Agreed. If you have not already read the Economist article (I think March 16) with a China technology review, it is a must read. It gives a picture of what it is like to do business in China- It is a helluva place.
A fake Chinaman masquerading as a UTSI bull with insidiously "bearish" information. You're too much, Fong-fong! 'Whoever you really are, do not matter, because now I put you on IGNORE, but do not say I sorry."
Very good post from a long.
I have previously showed that the market continues to keep the PEG of companies who get most of their revenues in 3rd world countries under 1.0 as a general rule.
The basis that most fundamentalist bought and continue to buy and hold this stock. They see good growth in earnings and revenues, excellent balance sheet and the like. Good strategic relationships etc. And they see a low PEG thinking that the market must be wrong.
But they do not know, or accept the fact the market continues to penalize China revenue driven companies. Whether that will change and if it does when, will be shown in the Technical indicators, not in the company fundamentals.
Nawar was absolutely correct all along when he said that for UTSI's PEG to expand that UTSI needed to significantly increase their business outside of China.
So far UTSI has not been able to generate much non 3rd world country revenues except for Japan. Even in the U.S., their revenues continue to be insignificant.
I believe that Lu will eventually correct this problem but it may not be for a while. In the meantime the smart money has rotated out of UTSI.
When it comes back. I don't know but the decrease in institutional holdings and the increase in Short Interest has helped to drive the price down.
When it becomes oversold on a relative basis to other 3rd world revenue generating companies it will go up again, because PAS, the core business is not going away and also UTSI has had signficant success in IP-DSLAM.
The potential 3G business at this point is still to empheral for the market to put a a value on it. However, that could change overnight with a couple of announcements.
"I have previously showed that the market continues to keep the PEG of companies who get most of their revenues in 3rd world countries under 1.0 as a general rule."
I think it is a matter of perception. For many companies, the primary area of growth is international operations. However, investors look at them as stable American companies, unlikely to be impacted by changes in the foreign business environment.
In time (5-10 years), I think that will change, but for now UTSI is going to PEG ratio that is going to be lower than its peers.
Nevertheless, I like UTSI and I much prefer their foreign earnings and growth to the stagnent sales and marginal profitability of some the other big names in technology.