Why Fundamental Investors Love China Mobile Limited (HKG:941)
I’ve been keeping an eye on China Mobile Limited (HKG:941) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 941 has a lot to offer. Basically, it is a financially-healthy company with a a strong history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on China Mobile here.
Flawless balance sheet, good value and pays a dividend
Over the past year, 941 has grown its earnings by 5.14%, with its most recent figure exceeding its annual average over the past five years. Not only did 941 outperformed its past performance, its growth also surpassed the Wireless Telecom industry expansion, which generated a -25.04% earnings growth. This is what investors like to see! 941’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that 941 has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. 941 currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is rather impressive for a HK$1.42t market cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
941 is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the wireless telecom industry, 941 is also trading below its peers, relative to earnings generated. This further reaffirms that 941 is potentially undervalued.
Next Steps:
For China Mobile, there are three pertinent factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for 941’s future growth? Take a look at our free research report of analyst consensus for 941’s outlook.
Dividend Income vs Capital Gains: Does 941 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 941 as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 941? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
