“Chunghwa Telecom Co. Ltd. (CHT), Taiwan’s largest phone company, is our favorite dividend stock to own. The company recently said that it is considering setting up joint ventures on the mainland, hoping to build on agreements with Chinese telecom firms China Unicom and China Telecom (CHA) to expand Chunghwa’s software and value-added services businesses into mainland China.
“Chunghwa Telecom has agreements to share resources with China Telecom and to develop value-added services with China Unicom. Lu said cloud computing could be another potential area for partnership between Chunghwa and mainland carriers. Chunghwa Telecom’s first-quarter net profit fell 1.6% to TWD11.9 billion (USD410.4 million), beating analyst estimates. A cut in the corporate tax rate to 17% from 25% helped boost the company’s bottom line for the quarter. The company is attempting to offset falling fixed-line and mobile-phone revenues with an increased focus on value-added wireless services, Internet television and high-speed data services. Offering a dividend yield of [2.9%], CHT is a buy up to USD36.”
Yiannis G. Mostrous, Global Investment Strategist, 7/11
