Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Thematic (Sector/Industry)

China Telecom services / Thematic (Sector/Industry)

The Chinese telecom market is one of our favorites in the region, with organic growth stemming from country GDP growth forecasts averaging around 4% per year over the next 10 years and consumption growth of around 6% per year over the same period. A stable and rational three-player market is also foreseeable, given the government’s likely preference to retain control of the operators. The negative impact of new entrants in mobile markets in Australia, Singapore, and India shows the value of a stable three-player market. With around one third of customers still to convert to 4G phones in a country with high usage of mobile commerce, we see further data revenue growth for the telecom operators. We also still expect some rebounding from the one-off negative impact of the introduction of value-added tax, or VAT, in 2014. The potential IPO of China Tower Corp, or CTC, could also provide a positive catalyst, especially if this company can produce profitability and cash returns like the U.S. tower companies have done. <a href="https://www.smartkarma.com/entities/27" target="_blank" data-smartkarma-citation="entities:27:1">China Mobile Ltd (941 HK)</a> dominates industry profits and free cash flows and has the financial strength to maintain its advantages in the mobile market and extend this to new markets where it sees opportunities, such as fixed-line broadband. It remains our key pick in the market.Analyst: Dan Baker

The Chinese telecom market is one of our favorites in the region, with organic growth stemming from country GDP growth forecasts averaging around 4% per year over the next 10 years and consumption growth of around 6% per year over the same period. A stable and rational three-player market is also foreseeable, given the government’s likely preference to retain control of the operators. The negative impact of new entrants in mobile markets in Australia, Singapore, and India shows the value of a stable three-player market. With around one third of customers still to convert to 4G phones in a country with high usage of mobile commerce, we see further data revenue growth for the telecom operators. We also still expect some rebounding from the one-off negative impact of the introduction of value-added tax, or VAT, in 2014. The potential IPO of China Tower Corp, or CTC, could also provide a positive catalyst, especially if this company can produce profitability and cash returns like the U.S. tower companies have done. China Mobile Ltd (941 HK) dominates industry profits and free cash flows and has the financial strength to maintain its advantages in the mobile market and extend this to new markets where it sees opportunities, such as fixed-line broadband. It remains our key pick in the market.Analyst: Dan Baker

Chinese Telecom Market Provides Favorable Backdrop for Stocks: Defensive Long-Term Growth on Offer