Big-cap wireless issue China Mobile CHL may be a prime gauge of that country's economy and its consumer spending. The stock had been one of the market's stars until 2007.

No wonder. As China embraced the free market, in its way, it showed what people want most with their first tastes of consumer power: more food, better housing and cell phones.

Don't scoff. In countries where traditional lines are hard to get, or just expensive, cell phones offer a fast and cheap option.

And for the relentless flow of people from rural areas to the big cities looking for work, a phone is not a luxury; it's a must-have. They're leaving behind friends and family.

That's how China Mobile won 370 million subscribers, making it No. 1 in the country by far. Beijing says the whole market, now at 520 million users, will soon hit 600 million.

Now add to the mix a shuddering world economy. China, as factory to the world, will surely be hit, posing a risk to telecoms.

Investors already seem to have priced in some pain for China Mobile, or for China, or for both. The stock has dropped 59% from its 52-week high.

That's not so bad, in comparison. The Shanghai composite has plunged 71% from its October 2007 high.

What's more, China Mobile's 52-week high was made 52 weeks ago. As of Monday, even if the stock is unchanged for the day, it will be standing just 55% from its 52-week high, which will have started to fall.

China Mobile's quarterly earnings growth has been rising since a 23% gain in Q4 2006. Growth hit 67% in this year's Q2, the best result in years, before cooling to 37% in Q3.

Pretax margin and return on equity, at 37% and 25% respectively, are wide and getting wider.

Source: Investor's Business Daily