The comparative advantage of China Mobile (NYSE:CHL) over China Telecom (NYSE:CHA) and China Unicom (NYSE:CHU) lays in its financial strength, profitability and management effectiveness. The following analysis shows the comparative strength of CHL using key financial ratios.
Looking at revenue, operating income and net income for China Moblie in the last 2.5 years, it is apparent that total revenue and net income growth has been consistent and strong. The plateau in operating income is attributed to increase in capital expenditure related to 3G network developement.
Comparing China Mobile to China Telecom (NYSE:CHA) (HKG:0728) and China Unicom Ltd. (HKG:0762) (NYSE:CHU)(SHA:600050) in financial strenght, profitability and management effectiveness, the advantage of CHL becomes more evident.
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In terms of financial performance, the graph comparing the Current Ratio and Total Debt to Equity between the three companies demonstrates a relatively low debt service for CHL. The Current Ratio of China Mobile (Hong Kong) Ltd. , (HKG:0941) (NYSE:CHL) is almost 4 times as much as that of the other competitors, and the Total Debt to Equity, nearly 1/28 to that of CHA and 1/3 to that of
Therefore, based on the ratios analysis, CHL is obviously ahead of its competitors in many aspects. Its advantages in financial strength and profitability allow the company to increase capital expenditure, a large proportion of which will be invested in the
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