Investors Are Missing Apple's China Opportunity
by Timothy Phillips
Apple (AAPL) is currently priced with the expectation for essentially zero earnings growth going forward based on its anemic trailing Enterprise Value to Free Cash Flow ratio of 4.7 coupled with a 2.5% dividend yield. This for a company where 52% of its revenue is focused in a market (smartphones) expected to grow 32% in 2013, and then 13.3% per year from 2014 to 2017. Within the smartphone market, China is both the largest and fastest growing segment, expected to grow 41% in 2013 to 301 million units. Apple has set its sites on China, more than doubling its iPhone revenue in this segment last quarter, and expects to significantly increase its share going forward. Based on my research and analysis, incremental Greater China iPhone sales on their own could add almost 25% to EBIT in FY14. read more »
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