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Telecom Sector Presentation

Telecom Sector Presentation. May 11, 2010 Jiying Wang YongHui Wu. Agenda. Recommendations Sector Overview Analyses: Business Economic Financial Valuation Conclusion. Recommendation. Increase SIM holding by 30 basis points to bring it to 4%

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Telecom Sector Presentation

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  1. Telecom Sector Presentation May 11, 2010 Jiying Wang YongHui Wu

  2. Agenda • Recommendations • Sector Overview • Analyses: • Business • Economic • Financial • Valuation • Conclusion

  3. Recommendation • Increase SIM holding by 30 basis points to bring it to 4% • Possible reallocation of funds within the SIM Telecommunication Sector

  4. Sector Overview

  5. SIM Holding Information Sector Information: Size Industry Information

  6. Telecom Service-Domestic Largest Companies Wireless Communications NIHD is ranked 13 in wireless communication

  7. Current Performance

  8. Business Analysis Wireless Communication Telecom Service - Domestic Mature Established networks and slow demand increase Little need for increased capital spending Cyclical Relatively more resistant to economic fluctuations • Growth • Still expanding, especially internationally • Huge capital spending required • Cyclical • Fluctuates a lot with business cycle

  9. Supply & Demand • Ability to add new supply • 3G market, especially in developing countries • 4G market in the more developed countries • Demand varies globally • Higher demand increase in developing countries and little demand increase in more developed countries • Innovations and advances in technology help to create new demand • Possible external factors • Government regulations

  10. Porter’s 5 Forces

  11. Economic Analysis Positive • GDP growth • Population growth – especially growth in middle class of developing nations • Consumer confidence • Per capita income Negative • Unemployment rate • Energy Prices – increase cost of operation

  12. Economic Analysis

  13. Economic Analysis

  14. Economic Analysis

  15. Economic Analysis

  16. Financial Analysis Telecommunication

  17. Financial Analysis Telecommunication

  18. Financial Analysis Verizon Communications Inc.

  19. Financial Analysis Verizon Communications Inc.

  20. Financial Analysis NII Holdings, Inc.

  21. Financial Analysis NII Holdings, Inc.

  22. Valuation Analysis

  23. Broken Bollinger line of Telecom Sector

  24. Broken trend line of NIHD

  25. Broken support of VZ

  26. Conclusion • This sector is slightly undervalued • Foresee growth in wireless telecom and international markets • Increase SIM portfolio by 30 basis points to 4%

  27. Q&A Any Questions? Thank you!

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