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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 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% • Possible reallocation of funds within the SIM Telecommunication Sector
SIM Holding Information Sector Information: Size Industry Information
Telecom Service-Domestic Largest Companies Wireless Communications NIHD is ranked 13 in wireless communication
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
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
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
Financial Analysis Telecommunication
Financial Analysis Telecommunication
Financial Analysis Verizon Communications Inc.
Financial Analysis Verizon Communications Inc.
Financial Analysis NII Holdings, Inc.
Financial Analysis NII Holdings, Inc.
Conclusion • This sector is slightly undervalued • Foresee growth in wireless telecom and international markets • Increase SIM portfolio by 30 basis points to 4%
Q&A Any Questions? Thank you!