|Bid||43.00 x 1800|
|Ask||43.10 x 1200|
|Day's Range||42.68 - 43.14|
|52 Week Range||37.44 - 55.84|
|Beta (5Y Monthly)||0.83|
|PE Ratio (TTM)||9.91|
|Forward Dividend & Yield||1.95 (4.52%)|
|Ex-Dividend Date||Aug 26, 2019|
|1y Target Est||N/A|
Oct.21 -- Edison Lee, head of telecom and telecom equipment research at Jefferies, talks about Chinese mobile phone operators. China Mobile Ltd.’s nine-month profit fell as government mandated tariff cuts and spending on its business transformation eroded earnings, leaving the carrier on track for its first drop in annual profit since 2015. Lee speaks with Yvonne Man and Rishaad Salamat on "Bloomberg Markets: Asia."
Oct.21 -- Elinor Leung, head of Asia telecom and internet research at CLSA, talks about the outlook for Chinese mobile phone carriers. China Mobile Ltd.’s nine-month profit fell as government mandated tariff cuts and spending on its business transformation eroded earnings, leaving the carrier on track for its first drop in annual profit since 2015. Leung speaks on "Bloomberg Daybreak: Asia."
In the latest installment of Barron’s annual investment Roundtable, five of our 10 panelists take their turn naming top investment picks—and some pans.
As American markets continue to soar, it's time to shop for high-yield stocks in emerging markets and Europe Continue reading...
(Bloomberg Opinion) -- Cause and effect. Action, reaction. As China cracks down on shadow finance, private companies and state giants alike are learning that the karmic wheel of money can come to a screeching halt.In April 2018, China unveiled far-reaching rules for its financial industry as part of an effort to curb risk. Banks were asked to spin off their wealth-management arms, which had helped funnel credit to an overburdened private sector, and stick to traditional, boring (read: low-yielding) loan books. They were given three years to adopt the new rules, ending in December 2020. This was a declaration of war on shadow financing. The industry shrank by 1.6 trillion yuan ($229.1 billion) in 2019, after contracting by 2.9 trillion yuan a year earlier. The policy change has already inflicted some damage. Onshore bond defaults hit a record high for two straight years. In 2019, most of them came from private-sector borrowers struggling to refinance, while state-owned enterprises emerged largely unscathed.As we enter 2020, however, China’s draconian reforms could start to backfire on the state, too. For starters, a shadow-banking crackdown has severely restricted Beijing’s fiscal prowess. To boost infrastructure spending, officials have been allowing local governments to issue special-purpose municipal bonds at a record pace, even bringing forward the quota for 2020. Yet infrastructure spending remains anemic, growing even slower than the overall economy. Why would this be? Since 2015, Beijing has been relying on public-private partnerships to build roads and railways. But private money has essentially evaporated after the new rules prevented wealth-management products, typically short-term instruments, from investing in longer-term projects. Meanwhile, China’s new municipal bond issues, at roughly 2 trillion yuan a year, can’t meet the nation’s annual infrastructure spending of 17 trillion yuan.Beyond a few hiccups, faith in China’s public-sector bond issuers remained relatively unshaken in 2019. Every once in a while, a local government financing vehicle would be a few days late in its coupon repayment, but Beijing hasn't allowed these municipally run, off-balance-sheet shell companies to default. Ever. This may not be such a sure bet in 2020. LGFVs have amassed a huge pile of debt over the past decade: 33 trillion yuan, according to S&P Global Ratings. Of that, only about a quarter is in bonds; the rest comes in the form of bank loans and non-standard credit. In other words, private enterprises aren't the only ones dipping into the shadow-banking well. Impoverished local governments are, too.Many of the 1,800-plus LGFVs have deep relations with shadow banks, data compiled by Huatai Securities Co. show. In Guizhou province, for example, these entities get 20% of their financing from non-standard sources of credit. In Tongren, a city in the region, that figure is 72%. This should come as no surprise: As providers of public services and infrastructure, LGFVs often struggle to generate enough cash flow, and even state-owned banks are holding back credit from the poorest areas.As we witnessed in 2018 and 2019, private enterprises have no choice but to default when one of their key funding channels is cut off. Unless China takes a policy U-turn, the same phenomenon may repeat with municipals’ financing vehicles.By now, the realization that banks prefer state-linked entities has become deeply ingrained in China’s business community. So how do private businesses get cheap credit? By pretending to be affiliated with the government. Already, quite a few “fakes” have blown up in investors’ faces.China Minsheng Investment Group Corp., for example, repeatedly tested bondholders’ nerves last year. The company has managed to amass 232 billion yuan in debt in just four years, largely thanks to its status as the brainchild of Premier Li Keqiang and its pledge to serve “national strategy as its mission,” according to a 2016 bond prospectus. Yet the company remains privately held.Or consider Peking University Founder Group, which surprised traders in December with a late bond payment. Investors have long associated the conglomerate — whose business spans finance, real estate and commodity trading — with the Ministry of Education. As a legal tussle unfolds, though, many are starting to question the strength of Founder’s state ties. The company could be one of the biggest corporate defaults in China: It has 23 onshore notes outstanding, with two-thirds, or 24 billion yuan, due over the next year. Similar soap operas will continue to play out because being a fake state-owned enterprise is the only way to get good credit. And Beijing will have no choice but to step in, or risk its own reputation. What’s missing in all this is why China’s biggest state-owned banks aren’t filling the void. One explanation is that they have little incentive. These lenders have remained profitable, with the big four earning almost 1 trillion yuan in net profit in the last year. Lending to private businesses requires grunt work, and credit officers simply aren't interested. They’d rather write loans to state giants such as China Mobile Ltd. and go back into hibernation.Meanwhile, Beijing has tweaked its credit statistics to appear friendlier to private businesses, all while lecturing China Inc. that allowing some defaults will help borrowers kick their debt addictions. While such advice is easy to dole out, it makes for bitter medicine when trouble starts brewing within state-run businesses. So, junk bond traders, rejoice! Those defaults you fear could dwindle in 2020. China’s war on shadow banking can’t last forever. To contact the author of this story: Shuli Ren at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2020 Bloomberg L.P.
Progress on the U.S.-China trade war has boosted Chinese stocks. Alibaba (NYSE:BABA) has broken out to a new all-time high, JD.com (NASDAQ:JD) has returned to mid-2018 levels and the iShares MSCI China ETF (NASDAQ:MCHI) has rallied nicely from August lows. All three are looking like great stocks to buy.For some investors, however, there's a catch: Few Chinese stocks pay a dividend. Income investors looking for stocks to invest in can get exposure to the region through a stock like Apple (NASDAQ:AAPL) or Starbucks (NASDAQ:SBUX). But, for those businesses -- as with many American companies -- China drives only a small portion of revenue and profits.Nonetheless, income investors looking for dividend stocks to buy to capitalize on the Chinese market do have some options. Unsurprisingly, these names do have risk. Yet, they have real rewards, too -- both in terms of dividends and the possibility of further appreciation if renewed optimism toward China persists.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Top-Tier Dividend Stocks for 2020 So, let's take a look at a few Chinese stocks to possibly get your hands on. 3 Dividend Stocks to Buy: Las Vegas Sands (LVS)Source: Andy Borysowski / Shutterstock.com Casino operator Las Vegas Sands (NYSE:LVS) offers potentially the best combination of income and exposure to the Chinese economy. LVS hiked its dividend around 2.6% in 2020 in its third-quarter report, and now yields nearly 4.5% at the current price. That increase was the company's eighth-consecutive annual raise.However, despite its U.S. domicile, Sands's results rely almost solely on Chinese demand at this point. Through the first nine months of 2019, nearly 60% of Adjusted Property EBITDA came from the company's operations in the Chinese enclave of Macau. Nearly another 35% comes from the Marina Bay Sands property in Singapore -- which too attracts Chinese gamblers.As noted before, there are risks. Sands' concession in Macau expires in 2022, and must be renewed. However, the odds of Sands failing to secure an extension are "remote," as credit analyst Fitch put it earlier this year. Also, the thawing of the trade war is a big positive on this front; there was the chance that LVS chairman Sheldon Adelson, a prominent supporter of President Donald Trump, could get his company drawn into the proverbial crossfire.But, as Fitch noted, it's also possible that authorities could raise the tax rate or require other adjustments. Any "hard landing" in China could send profits tumbling. And, the dividend payout ratio is nearing 100% -- meaning hikes going forward likely will be minimal.Still, there's a nice bull case here. Income investors should check out Wynn Resorts (NASDAQ:WYNN) as well, which raised its dividend 33% this year and yields 2.9%. PetroChina (PTR)Source: Gil C / Shutterstock.com PetroChina (NYSE:PTR) seems like the forgotten Chinese giant. It has the second-highest market capitalization among U.S.-listed companies based in China, behind only Alibaba. Yet, it receives a fraction of the coverage of other Chinese names.Additionally, there's an attractive combination of exposure to Chinese growth and dividend income. PTR shares are cheap, at barely 13x forward earnings, but -- like LVS -- there are risks.Unlike most U.S. companies, PTR's dividend is inconsistent in terms of its size and is only paid semi-annually. The yield based on 2019 distributions is over 4% and nearing 5%, but that may not be the case in 2020 -- particularly with earnings declining of late. PetroChina needs oil prices to hold up, as well. * 7 Vaping Stocks to Get into Ahead of the Crowd Income investors looking for consistency might look instead to names like BP (NYSE:BP) or Exxon Mobil (NYSE:XOM), the latter of which clearly has seen some support thanks to its dividend. Those looking to add growth or potential upside, however, might considering swapping out those established names for the higher-upside PTR. China Mobile (CHL)Source: testing / Shutterstock.com Shares of China Mobile (NYSE:CHL) already have bounced nearly 10% since hitting an 11-year low this month. They may rally further this week thanks to the so-called "Barron's bounce". That publication called out CHL stock as a cheap, yet dominant play this weekend -- and made a strong case in the process.After all, as Barron's pointed out, China Mobile has 10 times the customers of Verizon Communications (NYSE:VZ) or AT&T (NYSE:T). And, like those U.S. giants, it has a 5G catalyst on the way. Yet, by any measure, it trades at a substantial discount to its American counterparts.With a 4.5%-plus dividend yield, there's a nice income case here as well. And, if CHL stock does rise too sharply this week, investors can also look at smaller rival China Telecom (NYSE:CHA).Obviously, both Chinese telecommunications companies need their domestic economy to cooperate. But, if it does, the gains in both stocks in recent sessions could be the prelude to substantial upside in 2020.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 2019 Losers That Will Be 2020 Winners * 7 Safe Dividend Stocks for Investors to Buy Right Now * 5 Artificial Intelligence Stocks to Consider The post 3 Dividend Stocks to Buy for China Bulls Heading into 2020 appeared first on InvestorPlace.
This weekend's Barron's reveals what legendary stock picker Peter Lynch has to say about active investing, growth stocks and more. Other featured articles look at which of the decade's top performers still ...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth […]
China has begun offering cellphone customers superfast 5G service, a technological leap that comes despite U.S. attempts to contain Beijing’s largest telecom company. China Mobile Ltd. (CHL)(CHLKF)(HK:941) , China Telecom Corp. (CHA)(HK:728)and China Unicom Hong Kong Ltd. (CHU)(CHUFF)(HK:762)are offering plans starting around 128 yuan ($18) a month, going up to roughly $100, with speeds up to 100 times faster than existing 4G services, according to the companies’ promotional materials. Beijing already has some 10,000 operational 5G base stations, and over 100,000 are planned across the country, according to the Ministry of Industry and Information Technology.
Chinese carriers are aggressively pricing the new service, making Apple’s current lineup of non-5G-capable iPhone less attractive.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.China’s phone carriers offered discounts to subscribers after switching on the world’s largest 5G network Thursday, seeking to spur growth for an ultra-fast wireless system that’s key to technology supremacy. The country’s three wireless operators need to attract users to help pay for infrastructure they’ve spent more than $43 billion on in this year alone. While the technology is essential for developing industrial applications expected to drive a new digital economy, its faster speeds and lower lag times may be less compelling for consumers than previous upgrades.On the launch day of fifth-generation services in Beijing’s financial district, stores were quiet as carriers said they expect more users to sign up online.On the Twitter-like Weibo, “5G launching in 50 cities” and “5G package prices” were among the top-20 trending topics. But some Chinese consumers are balking at the high prices for handsets and service plans.“I don’t have money to buy a 5G phone, or to pay for a plan,” said Weibo user Yuanyao. “Too expensive. I can’t afford it,” said another named XBACK-No fear.Smartphone SupremacyWhile carriers look to lure more users to pay up for faster services, China’s handset makers also stand to benefit from fast uptake.Huawei Technologies Co., which also supplies the biggest slice of 5G network equipment, saw its smartphone market share jump to 42% in the third quarter, up from around 25% a year ago, according to research firm Canalys. It has already introduced several 5G models, as have Chinese brands including ZTE, Xiaomi and Vivo.Luring users to the world’s largest 5G networks may also help Chinese handset makers increase their global market share. Samsung Electronics Co. is the world’s top seller of smartphones, followed by Huawei. and Apple Inc.Huawei has already debuted models that work on the super-fast network in the U.K. and other markets in addition to China. On Wednesday, the Nikkei reported that Apple is telling suppliers that it expects to ship at least 80 million iPhones with 5G wireless modems next year.5G DealsAs of Thursday, China Mobile Ltd. was offering discounts of as much as 30% for users that pre-registered for 5G. Consumers buying 5G handsets from the carrier will get as much as 600 yuan ($85) off and gifts worth 699 yuan, the biggest operator by users said in a statement.China Unicom Hong Kong Ltd., the No. 3 carrier, and No. 2 China Telecom Corp. are also offering similar discounts to pre-registered users, along with other discounts and gifts via online lotteries and through their branches throughout the country.South Korea’s wireless carriers were the first to offer commercial 5G services, with SK Telecom Co. launching its network in April and Samsung already offering a 5G-enabled smartphone. Total 5G subscribers have surpassed 3 million in the country, although consumer reaction has been mixed.The faster network’s coverage was initially incomplete, leaving users to fall back on 4G more than some had expected, especially when using the service indoors.South Korean carriers SK Telecom Co., KT Corp. and LG Uplus Corp., have also sought to entice new users to adopt the technology, offering trade-ins and incentives that slash the price of new 5G phones to less than $200 from sticker prices of as much as $1,000. The subsidies have declined as the rollout expanded, said Kim Hee Sup, vice president at SK Telecom.“It’s true that the speed and coverage of 5G didn’t meet consumers’ expectations in early days,” said Kim Hee Sup, a vice president at South Korea’s largest carrier SK Telecom. “Now, the 5G service is rapidly improving as carriers are expanding the roll-out.”T-Mobile US Inc. earlier this week said it will flip on a nationwide 5G service by year end. Still, the carrier doesn’t offer yet offer a 5G compatible device yet and the service will be available only on one band of airwaves they are calling the “foundational layer,” with more layers of spectrum to come.The largest U.S. wireless carrier Verizon Communications Inc. launched 5G in April and has promised to have it available in parts of 30 cities this year. Rival AT&T Inc. has 5G in areas of 21 cities and plans to offer 5G nationwide by mid 2020. Sprint Inc., which has limited 5G available in nine cities, has promised a superior 5G network if its $26.5 billion merger with T-Mobile is approved.\--With assistance from Sohee Kim and Scott Moritz.To contact Bloomberg News staff for this story: Shirley Zhao in Hong Kong at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Dave McCombs, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- China’s three state-owned wireless carriers debuted 5G mobile phone services Thursday, a milestone in the country’s push to become a technology power even as it remains locked in a trade war with the U.S.China Mobile Ltd., the country’s largest carrier, unveiled its network in 50 cities including Beijing, Shanghai and Shenzhen, with packages priced as low as 128 yuan ($18) a month. Rivals China Telecom Corp. and China Unicom Hong Kong Ltd. also introduced their services at comparable rates.The operators had planned to start the networks next year, but accelerated the rollout just as the U.S. dug in on a boycott of China-based 5G equipment supplier and technology giant Huawei Technologies Co. Operators in the U.S. have introduced 5G to parts of some cities, without using Huawei gear, and South Korea debuted its version in April, though China will quickly become the largest provider by virtue of its huge population and investment by the companies.“While some other countries launched 5G services earlier this year, China will have the largest commercial operating 5G network in the world on Friday,” Chris Lane and other analysts at Sanford C. Bernstein. wrote in a note to clients Wednesday. “The scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain.”How 5G Will Change China (Beyond Faster Video Games): QuickTakeLocal media had initially reported the carriers would make 5G available starting Friday. As of Thursday morning, all three were already offering access to the service.Subscribers in China -- more than 10 million have pre-registered for 5G -- will have access to faster videos and games, more virtual reality applications and improved performance for mobile videoconferencing.China Mobile’s 5G packages for the heaviest users are priced similar to 4G plans that go as high as 588 yuan a month.The largest cities including Beijing, Shanghai and Shenzhen will get full coverage first. The three operators have projected a combined capital spending of 302 billion yuan this year.Subsidies for Huawei Gear Would Be Banned Under FCC Proposal The scale of deploying 5G infrastructure across China is especially important for Huawei. Dominance in the world’s largest market can blunt the effects of a U.S. campaign against other countries installing Huawei gear, which it accuses of posing a security threat. Despite the U.S. pressure, Huawei said in July that it had signed more than 60 commercial contracts to supply 5G networks around the world, including at least 28 in Europe.(Updates with introductions Thursday in second paragraph)\--With assistance from Gao Yuan.To contact the reporter on this story: Shirley Zhao in Hong Kong at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Dave McCombsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
When it comes to diversified tech giant Alibaba (NYSE:BABA), being an investor comes with its share of harassment. Nevertheless, it's time to watch for a capitalist opportunity now that a key battle line has been crossed.Source: zhu difeng / Shutterstock.com For U.S. investors, profiting in Chinese stocks has been more challenging these days. Many large-cap stocks and industry leaders in China ranging from Tencent (OTCMKTS:TCEHY), to China Mobile (NYSE:CHL), China Life Insurance Company (NYSE:LFC) or China Petroleum & Chemical Corporation (NYSE:SNP) have produced lackluster or negative returns in their U.S.-listed American Depository Receipts. And certainly the trade war has been a drag on stock performance.But Alibaba stock has been different. That's not to say it's been easy. Still, the fact is BABA has gained about 23% in 2019. The return is more than the S&P 500's climb of 18% and towers above U.S. tech giant Amazon's (NASDAQ:AMZN) 13% year-to-date increase.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Why is Alibaba Stock Different?So, what is the deal with shares of BABA? Alibaba stock has and continues to defeat investors' fears within this macro-charged environment. Most recently BABA stock toppled Street profit and sales forecasts in mid-August. * 7 Beverage Stocks to Buy Now To be certain, there's always going to be something or someone trying to get investors to back away from buying Alibaba despite its successes. For some that might include recent reports the U.S. is considering delisting Chinese stocks. And that threat can't be entirely ignored. Or maybe fake merchandise sales in the past or allegations of accounting shenanigans have prevented investors from taking action in BABA stock?Okay, so there's plenty of reasons not to buy BABA shares. But obviously those arguments don't include price performance. Most important, Alibaba stock continues to come out on top despite headline warnings and a challenging market for Chinese stocks. Now and with BABA crossing an important battle line on the price chart, it's time to put shares on the radar for a well-timed purchase. BABA Stock Weekly ChartAs noted above, capturing BABA stock's gains of around 23% hasn't been a walk in the park. And as expressed, bad press isn't likely to just disappear. The better news is I also don't believe Alibaba's impressive rally is finished. I see a solid entry for a risk-adjusted purchase of BABA stock.The weekly chart shows that since failing from a breakout attempt to new highs last year, Alibaba stock has established a corrective symmetrical triangle base. It's not perfectly formed with clear-cut pivots to define the pattern, but the essence of this bullish formation is there.Following last week's price action, shares of Alibaba are in position to confirm a bullish engulfing candlestick which puts BABA stock back above the 50% retracement level of the base, as well as the triangle's apex line. With stochastics in a pullback set-up in neutral territory and on the verge of signaling a bullish crossover, the situation looks all the more promising. How to Trade AlibabaI'd recommend buying Alibaba shares above $174.88. This entry waits for the BABA stock price to confirm last week's candlestick and reinforces the bias for continued upside in the bullish triangle pattern. If BABA rallies, a breakout through angular resistance near $185 might be watched for adding shares on strength and before looking to take partial profits in-between $195-$215.For containing downside exposure in Alibaba stock, I'd keep an eye on the weekly stochastics to continue to support the position and set a modified stop-loss beneath $165 for a stronger risk-adjusted exit that offers sufficient evidence off and on the price chart for closing the trade.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post Alibaba Stock is a Strong Buy Now -- More Than Ever Before appeared first on InvestorPlace.
Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees during the first half of 2019 amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a […]
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find write-ups about an individual hedge fund's trades on numerous financial […]
(Bloomberg) -- For most people, the transition to 5G means faster mobile data speeds, possibly up to 100 times quicker than the current standards. For Kim Duk-yong, it means amassing a fortune worth hundreds of millions of dollars.When South Korea became the first country to launch nationwide fifth-generation mobile services in April, Kim’s KMW Inc., a supplier of telecom equipment used in 5G networks, was a major beneficiary. Shares of the company surged sevenfold this year, boosting KMW’s market value to about $2.6 billion. The stock rose as much as 3.6% on Tuesday.Kim, who owns 36% of KMW along with his family, is now worth about $900 million, according to a calculation by the Bloomberg Billionaires Index that excludes shares pledged as collateral. He’s one of the first big winners of the shift to 5G that’s set to spread worldwide.It’s also a remarkable transformation for a company that had been mired in losses before sales more than doubled in the first half of 2019.Kim, 62, declined to comment. He told local media in August that some people were beginning to write off his company.“We were even called a zombie company by banks,” Kim was quoted as saying by ZDNet Korea, a technology news website. “Things have got better with the launch of 5G networks.”South Korea’s science and technology minister at the time, You Young-min, visited KMW in Hwaseong, a city south of Seoul, last month as part of checks on small and medium enterprises after the start of 5G services. Kim told the minister that demand for KMW’s products had surged, with revenue increasing 113% in the first half of 2019 from a year earlier, according to the ministry’s press release.KMW makes radio-frequency components for base stations. Its main customers include 5G infrastructure providers such as Samsung Electronics Co. and Nokia Oyj. The company’s ability to mass produce filters, essential for 5G services, at lower costs gives it an edge over competitors, according to a KMW spokesman.South Korea has seen a rapid expansion of 5G services since April, with the number of subscribers surpassing 2.5 million and more than 89,000 base stations in operation as of last month.China ProspectsKMW has room to grow outside South Korea as well, according to analysts. In the Chinese market, the government granted 5G licenses to wireless carriers in June. KMW supplies ZTE Corp., the smaller Chinese rival of telecom-gear giant Huawei Technologies Co.“5G spending by China’s big three operators is much larger than that of South Korea,” said Kim Hong-sik, an analyst at Hana Financial Investment Co. in Seoul who rates the stock a buy. “KMW provides its products to the largest one, China Mobile, through ZTE. Its exports to China are expected to increase further in line with the country’s preparation for 5G.”KMW also manufactures LED lights, which make up 10% of its revenue, according to its 2018 annual report. In 2015, the New York Yankees chose the company to install lights at its stadium.The stock surge has pushed up valuations, with KMW now trading at about 18 times book value. Still, all five analysts covering the stock recommend buying more. One risk to the company is how things will unfold in China, including a possible delay in 5G buildup because of a consumption slowdown, according to Wangjin Lee, an analyst at Ebest Investment & Securities Co.Wary LendersIt wasn’t Kim’s dream to become an entrepreneur. As an electronic engineering student in Seoul, he wanted to study more to become an academic. But he couldn’t afford to stay in school, so he entered the job market, working at companies including Samsung’s joint venture with Hewlett Packard before starting KMW in 1991.Kim founded the company with money from selling his apartment, and could only afford to hire one employee. Before this year, KMW incurred losses as Chinese competitors flooded the market with cheaper prices. That prompted banks to become wary of transactions with KMW, Kim told E-daily, a local newspaper, in a May interview.“I experienced how banks take the umbrella away when it rains,” Kim said. “I’ve been striving to show how a zombie company can survive.”(Updates with Tuesday’s share move in second paragraph.)To contact the reporter on this story: Yoojung Lee in Singapore at email@example.comTo contact the editors responsible for this story: Pierre Paulden at firstname.lastname@example.org, Tom Redmond, Peter EichenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The price action for the last two months is a perfect representation of the opportunity and risk behind Nokia (NYSE:NOK). On one hand, you have the societally and economically transformative potential of the 5G network bolstering the longer-term argument for Nokia stock. But on the other hand, fundamental and competitive risks cloud that narrative.Source: RistoH / Shutterstock.com In July of this year, I voiced my doubts about Nokia stock. Primarily, I cited the lack of technical enthusiasm as a risk factor. Although the company has been wheeling and dealing, securing contracts with big players like China Mobile (NYSE:CHL), Sprint (NYSE:S), T-Mobile (NASDAQ:TMUS) and BT Group (NYSE:BT), the enthusiasm had failed to reflect themselves into the equity value. As a result, NOK stock has been rangebound since the spring of 2016. Naturally, this doesn't inspire confidence. * 7 Triple-'F' Rated Stocks to Leave on the Shelf However, I was quickly proven wrong. In Nokia's second quarter of 2019 earnings report, the telecom firm produced a surprising beat. While consensus forecasts called for earnings per share of 0.03 euros, NOK delivered 0.05 euros. Moreover, the company generated $6.34 billion in revenue, up 7% from the year-ago quarter.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter the disclosure, the Nokia stock price skyrocketed (though not enough to break NOK out of its 3-year trading range).But it wasn't just the print that satisfied investors. In past years, Nokia's business along with the competition soured after 4G network sales peak. But with the 5G rollout, the new technology offers a fresh cycle for telecom firms. That's what Nokia's results confirmed, justifying the spike in NOK stock.Still, the bullishness was short lived. Nokia stock plummeted and has only recently started to look alive. So, which narrative is going to win out? Tailwinds for NOK Stock Are Interesting, but so Are the RisksUndoubtedly, the 5G narrative for NOK stock is alluring. As InvestorPlace contributor Theodore Kim pointed out, we're in the early stages of a global rollout. As he put it:The market for 5G will likely not take off until 2020. But when it does, users across the globe will need a brand new 5G standard smartphone. Carriers will sink billions into new 5G equipment. And Nokia will be positioned front and center in offering the new hardware across the globe.As a standard is established for this next-generation tech, only Nokia and Huawei will find themselves with comprehensive product and service solutions. But as we all know, Huawei is at the heart of a security debate that has underlined the U.S.-China trade war. The U.S. accuses Huawei of being a conduit for China-sponsored espionage.Of course, that benefits NOK stock, at least on the public relations front. No one is accusing the company of any such breach of trust. More importantly, this controversy gives Nokia an opportunity to work some uncontested deals.But the problem here is that they're not uncontested. Yes, 5G is a transformative innovation, one that augurs well for NOK stock. But it also provides the same opportunities for the competition. For example, regional rival Ericsson (NASDAQ:ERIC) isn't going to stand by and let Nokia have all the fun.From a share price perspective, both telecom stocks have similar dynamics, largely going rangebound over the last few years. Both are eager to capitalize on the 5G rollout. As such, a risk exists that the two will engage in a price war, which would hurt profit margins.Plus, a recession in Europe would exacerbate this possible contentious situation. 5G Isn't Exactly PerfectAlthough I'm bullish on many companies that are levered to the 5G rollout, it's important to realize that it's not a panacea for underperforming organizations.While the tech generates excitement, the rollout itself has been somewhat slow. A big part of that is the expense involved in upgrading equipment to accommodate the new signals. Also, because the 5G waves are shorter and more intense, they require different cell infrastructure compared to 4G.Ironically, another costly factor is security. With or without Huawei, 5G requires advanced network safety protocols. That eats into profitability, negatively impacting companies that are fiscally sensitive.Overall, though, you cannot dismiss the excitement factor of the rollout. Thus, we could very well see the kind of momentum that lifted Nokia stock following Q2. But it's also fair to bring up the long-term wildness in NOK. It really hasn't earned investor trust. * 7 Worst Stocks in the S&P 500 in 2019 Therefore, if you want to speculate on the emotions of 5G -- and not necessarily its fundamentals -- I must say that shares look interesting. That said, do make sure to pocket profits. The longer-term charts tell us that this will probably not be an easy ride.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Triple-'F' Rated Stocks to Leave on the Shelf * 10 Excellent Stocks to Watch for 2020 and Beyond * 7 Consumer Stocks to Buy in an Uncertain Market The post Is 5G a Tailwind or a Headwind for Nokia Stock? appeared first on InvestorPlace.
China Mobile Limited (CHL) is mulling to enter the Brazilian market by acquiring Oi to tap growth opportunities from 5G roll-out across the country.
(Bloomberg) -- Huawei Technologies Co. and China Mobile Ltd. are exploring a partnership to bid for Brazilian phone company Oi SA, O Globo Newspaper reported, without citing a source.Huawei, the phone maker caught in disputes between China and the U.S., is seeking the bid as an opportunity to enter the Brazilian market and expand its reach for 5G technology, the newspaper said. The plan also comes as the Brazilian government wants a solution for the indebted company, O Globo added.Oi declined to comment on the report, while officials at Huawei and China Mobile couldn’t be reached after regular office hours.Speculation of the bid comes as Brazil’s Senate approved a bill to update the country’s obsolete framework for telecommunications, paving the way for Oi to implement a plan to sell up to $2 billion in non-core assets. Earlier this week, Suno Notícias reported that China Mobile has filed a request to operate in Brazil and eventually acquire Oi. The country’s telecom regulatory agency Anatel said Sept. 17 it didn’t have any official information regarding the request.The Senate’s approval also sparked speculation of talks between the Brazilian carrier and other companies. In the past week, Telecom Italia SpA and Telefonica Brasil SA both denied reports in the Brazilian media that they’re in talks with Oi.The Rio de Janeiro-based telecom operator wants to sell assets including its African unit Unitel SA and focus on the last mile of its fiber-optic network, Brazil’s largest, to get revenue growing again as it enters the last phase of a two-year judicial recovery plan.Oi posted a loss of 1.56 billion reais ($376 million) last month and said it burned about 2 billion reais of cash in the second quarter, even as investors are still recovering from the company’s $19 billion debt restructuring in December 2017. The results prompted the phone giant’s largest shareholder to seek a replacement for a new chief executive officer.(Updates with regulator’s comment on earlier report on China Mobile in fourth paragraph.)To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at email@example.comTo contact the editors responsible for this story: Juan Pablo Spinetto at firstname.lastname@example.org, Ian FisherFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.