Take what you hear about this company on shows like ‘Fast Money’ or
any other CNBC or Bloomberg show. I think CNBC and the rest of the
western financial media do a terrific job giving insight into American
business, however they lack any of the subtle understanding of China,
Chinese culture, and the dramatic effect this has on business in
China.
Lets look at some facts.
The current story: China has over 650 cities. At least 20 of these
cities have a population over 2,000,000. Below is a short list of some
of the more well know cities.
Shanghai Population …….. 22,000,000
Suzhou Population ………. 11,000,000
Beijing Population ………… 15,000,000
Shenzhen Population ………10,000,000
Dalian Population ………….. 7,000,000
Chongching …………………. 4,000,000
China Digital has a 45% market share and growing. China’s total
population is conservatively estimated at 1,300,000,000 with about 30%
living in these 650+ cities. The urban areas being the current target
of China Digital TV, yields a current potential customer base of
390,000,000. That’s more than the entire population of the US.
Future Story: The percentage of people living in cities in China in
2020 is expected to reach 57%. Based upon TODAY’s population, that
would yield a customer base of 741,000,000, Simply put, that is an
increase of 351,000,000 potential customers by 2020.
Risks: The major risk involved with any Chinese based business
investment is the impending ‘Tea Bubble Burst’ The Chinese bubble
burst is not an ‘if’ it is a ‘when’. However. one thing is clear,
between now and the Beijing Olympics, i.e. September 2008, the central
government will do EVERYTHING in their power to ensure complete
financially market stability. In my book, that gives a year of stellar
growth on STV
Bottom Line: STV Strong Buy