The twelve trailing months’ P/E ratio shows that China Mobile (NYSE:CHL) is almost on par with the wireless telecommunications services industry benchmark, consistently fluctuating (very slightly) a few points below the industry ratio. This indicates that CHL is viewed as relatively competitive compared to other companies in the same industry. Other big players classified under the same industry include NTT, Verizon and Vodafone. CHL currently holds approximately 3.8% market cap among 85 wireless telecommunications services companies on the NYSE, placing it in the fifth position in terms of size of capitalisation.
Price to sales and price to cash flow ratios suggest that the market views CHL shares as outperforming other companies by current performance and expectations of future performance respectively. However, price to free cash flow ratio is way below industry ratio. Both these contrasting sets of ratios combined could mean that the market views CHL as a growing company which has yet to realise its full potential. CHL shares are considerably stable for a growing company and have been experiencing relatively small price changes both in short (4 weeks) and long time periods (1 year).
The dividend ratios also support the view that CHL is a growing company that has not reached its peak. For example, the dividend yield and growth ratios are beyond industry standard but when averaged out, payout is on par. Similarly, growth rates strongly support the same view with rates for the past 5 years well beyond average growth rates of other companies. Therefore, CHL’s growth is not due to an expanding industry but rather it is outperforming its peers. According to the industry growth rate, the wireless telecommunications services industry is currently experiencing a slight decline.
Favourable growth rates could be contributed by the large margins CHL enjoys in conducting sales as well as its dominance in the region. Large margins could be partially contributed by lower costs of doing business in
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