Apple and China Mobile Finally Ink a Deal:
After years of talks, Apple recently confirmed that it has at long last reached a deal with China Mobile to officially carry the iPhone. China Mobile will start selling the iPhone 5s and 5c starting on Jan. 17, with pre-orders already started on Christmas Day.
Apple’s Tim Cook said he is excited to begin working with China Mobile. “China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world’s largest network,” Cook said.
Brokers such as Baird say the China Mobile deal could add 20M+ iPhones, and Stifel Nicolaus says it could add $4-$8/share to Apple’s bottom line.
Local Broker Insight:
XYFunds: Industrial Securities
We are optimistic on Shanghai-focused state-owned asset reform. New enterprises in the Shanghai Free Trade Zone could enhance market-based reform, along with the government streamlining administration and delegating power to lower levels, which could push the Chinese economy to new growth.
Shenyin & Wanguo Securities: SOE Reform
State Owned Enterprise (SOE) reforms can effectively raise company valuations, and SOEs that put stock option incentives in place in 2012 generally outperformed the Shanghai Composite Index in 2013.
Shenyin & Wanguo Securities: Urbanization
The most significant highlight of the Central Work Conference on urbanization is the “activation” of existing land. The central government has turned away from the previous model of urbanization that was characterized by administrative directives into one that is more healthy and sustainable. Small cities, towns and counties with low population density and where there are no economies of scale, will no longer be the focus of policy support. There will no longer be any uncontrolled expansion of construction land and industrial land usage must be reduced. The development of existing available land will become an important and even primary method of land supply in first tier cities.
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Brendan Ahern | www.kraneshares.com | Managing Director
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