Mawer Investment Management Comments on China Mobile

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Oct 29, 2014

China Mobile (CHL), one of our recent additions to the portfolio, gained over 26% this quarter as it continued to benefit from a dominant position in China’s telecom market.

Our addition of China Mobile (CHL) to the portfolio in April is a good example of Mawer’s bottom-up process at work. In the months leading up to our initial purchase of the company, its share price had been in a steady decline as investors seemed to be overly worried with short-term issues. Our discounted cash flow approach, however, focuses on the long-term cash flow generating ability of the business rather than placing heavy emphasis on the near-term. This analysis identified China Mobile as trading at a significant discount to what we believe is its true value, thereby offering the potential for above average future returns.

From Mawer Investment Management Q3 2014 Investment Newsletter.