Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Invest in the Top Telecom in the "New China" Before the Herd Piles In

Companies / China Stocks Apr 23, 2012 - 07:11 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleG.S. Early writes: How would you like to get in on the ground floor of the telecom market in a country I've dubbed the "New China"?

It's a country that boasts:

•6% annual GDP growth before, after and during and the global economic meltdown.
•The fourth largest population on the planet. It is also one of the youngest (median age is 28).
•A centuries-long social and economic connection to China and every strategic Southeast Asian economy.
•Foreign Direct Investment that has grown exponentially in the teeth of the global crisis.
•A bigger economy than the Netherlands or Turkey.
I'm talking about Indonesia.


It's a place usually found in the back of the mind of most Western investors. It only crops up if there is an earthquake, a tsunami or political unrest in a far flung province.

But the truth is, Indonesia is nestled in one of the most strategic locations on the emerging market map. It neighbors India, Malaysia, Australia and Thailand.

It also has long historical and economic ties to China.

About 3%-4% of the population is Chinese/Indonesian, and they represent a powerful but quiet voice in the Indonesian economy. That influence, which was buried for many years, is now a highly prized asset.

Investing in the "New China"
From the 1970s until recently, Chinese influence in Indonesian society was largely muted by Indonesian politicians. The Chinese language wasn't taught in schools and Chinese history was stricken from textbooks.

But things are changing rapidly.

In the rice-growing region of Lamongan in Java, students are now being required to speak, read and write Mandarin because Indonesian authorities now realize that there is huge economic advantage in reaching out and learning from its economic compatriots.

Having partners is one of the cornerstones of the new economy; without it and a global reach you're not going to make it.

Telecommunications is one of the keys. It's why I like Telekomunikasi Indonesia (NYSE: TLK).

If Indonesia lives up to its growing reputation as the "New China" then TLK is the new Ma Bell.

This telecom giant has a portfolio of information and communication services, including fixed-wire line and fixed wireless telephone, mobile cellular, data and Internet, and network and interconnection services for 237 million people.

What's more, those 237 million Indonesian people are gaining buying power. The country has just cracked its goal of $3,000 GDP per capita.

While this doesn't sound impressive to a Westerner, let me put it in perspective.

In 2002, the Chinese Communist Party set a goal for $3,000 GDP per capita by 2020. The Chinese hit their goal early, in 2008.

The implications of $3,000 GDP per capita are an economic tipping point for a developing economy.

For example, by 2009, Chinese car purchases had grown to 13.6 million, surpassing the United States. In the first quarter of 2011, car purchases in Indonesia were up 30% to 225,000 units and neared 900,000 by year end. The government has a goal of 1 million sales by 2015 and it's looking like it may hit that early.

The point is, Indonesia is on its way. As one of biggest nations in the world, with access to every major developing economy in Asia, the Indonesian story has legs and a lot of potential for investors.

Telkom (NYSE: TLK) Is Firing On All Cylinders
Looking at TLK specifically, the stock has performed remarkably well through the economic maelstrom that even shook India and China. Since late 2008, the stock has returned more than 80%, including a solid dividend that is now around 4.4%.

Being a young and growing economy with a population demanding the goods established economies already have, the growth prospects are astounding.

Between 2005-2010, mobile phone growth was over 30% a year and land line growth was near 20%.

There are now 250 million mobile phone users in Indonesia, with TLK having a hand directly or indirectly in almost every account. In total, TLK directly controls 70% of the mobile business.

As the company expands, it's encouraging to see TLK keeping control of its bottom line by trimming its workforce (more by early retirement and reallocating duties than by layoffs).

It's also developing partnerships with outside firms where it can learn and profit simultaneously.

For example, it was announced earlier this week that TLK and eBay (Nasdaq: EBAY) will be partnering on an e-commerce venture in Indonesia. It makes sense, since the number of Internet users in the archipelago increased by more than 30% in 2011.

And now that the country is increasingly connected, doing business on their phones, iPads or computers will be the next logical step.

On the dividend side, TLK is thinking about boosting its dividend payout ratio from 50% to 65%, which means even more cash for investors on this total return play.

Its low debt levels help keep the dividend - and dividend growth - reliable. And for this fiscal year, the company is projecting a 7%-8% rise in revenues, while it boosted EBITDA to around 58%.

The institutional money is pouring in and has pushed up the stock, but there's still plenty of headroom. Most individual investors have yet to hear this story.

Trading around a P/E of 13, it's slightly more expensive than its Asian peers, but if you're looking for a dynamic long-term total return pick, TLK is a great buy below 34.

Source :http://moneymorning.com/2012/04/23/investing-in-the-new-china-with-this-telecom-market-stock/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules