MII. China Mobile Limited and. companies of the future. By Ion Nemerenco

Transcription

1 MII China Mobile Limited and America Movil: The two wireless companies of the future. By Ion Nemerenco

2 Telecommunications: Wireless Rapid subscriber growth over the past few years More than 500 million people use mobile communications This number is expected to reach 1 billion by 2004

3 Telecommunications: Wireless Most of the growth over the past years came from the switch from analog to digital networks Most of the subscriber growth is expected to come Most of the subscriber growth is expected to come from South America and South-East Asia

4 Telecommunications: Wireless New 3G standard on the horizon Major wireless companies already showed their strong interest in the new standard. Mobile Internet

5 China Mobile Limited (Hong Kong) Incorporated in Hong Kong 3 September Million subscribers, more than 50% of total market Offers services in 21 provinces

6 China Mobile Limited (Hong Kong) Sales: $12.9 Billion Net Income: $3.6 Billion Net Profit Margin last year: 27.6% Net Profit Margin 5-year average: 25.5% Debt to Equity Ratio:.16 Quick and Current Ratios: 1.9 and 2 respectively Return on Equity last year: 22.5% ROE 5-year average: 17.8%

7 China Mobile Limited (Hong Kong) Highly professional management team Strategic alliance with Vodafone The company was recognized throughout the world: 1 st in the Top 200 Emerging Markets by Business Week 1 st Best Financial Management by FinanceAsia 3 rd in terms of revenue in Fortune s list of China 100

8 WHY CHI A MOBILE? China the biggest growing wireless market in the world Huge potential for extraordinary growth without taking high investment risks The company will continue to buy infrastructure from the Chinese government, who is willing to sell.

9 America Movil (AMX) Established in September 2000 as a spin-off from the biggest Mexican telecommunications company TelMex in order to seize the opportunities from the mobile wireless market in Latin America 12 subsidiaries and affiliates that provide services to 30 million clients in 10 countries Carl Helung

10 America Movil (AMX) Sales: $3.9 billion Net Income $395 million Gross Margin: 58.3% Net Profit Margin: 8.1% Debt to Equity Ratio:.40 Current and Quick Ratio: 1 and.5 Return on Equity 6.5%

11 America Movil (AMX) Telecom Americas: strategic company created for penetrating the Brazilian market 2 years ago Currently has 4 operators in Brazil, with 4 million subscribers and plans to buy a 5 th one. Brazil is a key market for America Movil, due to its size.

12 America Movil (AMX) 70% of profits come from Mexico, where it has a 75% market share. Interested in establishing a strong presence in Brazil, the biggest market in Latin America, relatively untapped. Acquisition period is in the past and the company today is focusing on reducing costs and increasing its profit margins. The company will continue to buy infrastructure from companies that are pulling out of Latin America such as BellSouth, AT&T, etc.

13 Why America Movil? Significant increase in it s profit margins Strong Consolidation efforts Strategically positioned for success, especially in Mexico and Brazil

14 Similarities between America Movil and China Mobile Both companies located in extremely attractive markets and industry. Both Chinese and Latin American market have big potential for growth and are relatively untapped compared with the European and North American markets. Both companies have finished investing in their infrastructure and will focus on reducing costs and increasing subscriber base.

15 Why Invest in these companies? Why Invest in this industry? The industry will grow globally, that is a fact! The growth will occur in the two emerging markets of Latin America and China. These two companies are positioned the best in each of this two markets. Both of these companies are entering the stage of becoming extremely profitable, without any other major capital expenditures.