I realize seeing the words "China" and "bull" in the same line is an all-too-common occurrence these days, and many investors simply dismiss any Sino optimism as overdone hype. But hear me out on a favorable pitch for China Mobile (NYSE:CHL), a company I believe still offers investors a rich opportunity even with the risks present in the larger economy.

With a market capitalization in excess of $230 billion, it may be hard to picture China Mobile as a growth play, but it is. The wireless market in China still has a sub-40% penetration rate, leaving plenty of opportunity for growth. And the company dwarfs its closest competitor, China Unicom (NYSE:CHU), outperforming it in almost every measure.

Even in China, size matters
True, it's easy to pull out arguments citing a massive population of consumers, tremendous growth in GDP, and a booming middle class as reasons to favor any Chinese company. But there's a lot more to like about the world's largest wireless operator than just a fertile and largely untapped market.

For starters, just because the wireless services industry in China is at a scale beyond all other regions of the world doesn't mean it's as advanced in its stage of growth. Just look at these numbers coming out of China Mobile as of the end of 2006:

  • Compound annual subscriber growth (last five years): 34%
  • Compound annual revenue growth (last five years): 24.1%
  • Net income margin: 22.4%

Sure, these stats are backward-looking and likely won't continue at this clip, but China Mobile's most recent year still saw a healthy 22% increase in subscribers and revenue. Since the market is maturing and more subscribers are coming from rural areas, it's expected that certain metrics in China Mobile's business will trend downward. But not all metrics are going down -- cash flow is booming, with almost $9.3 billion generated in 2006.

By comparison, similarly sized Vodafone (NYSE:VOD) can't hold a candle to China Mobile in terms of growth or profitability, since it operates in largely saturated European markets. The fact that China Mobile dominates an untapped, viable market for new services gives it plenty of room to run.

More, better, faster
While Americans have the market cornered as far as consumption, mobile Chinese citizens are showing a willingness to spend and talk more on cell phones. While the average revenue per user (ARPU) has been predictably trending down, the total minutes of use from China Mobile's customers increased 38.6% in 2006. The volume of SMS text messages also increased 41.6% in 2006, showing that the market is expanding its use of value-added services provided by China Mobile.

And the company is continuing its aggressive expansion of value-added service offerings to customers. Revenue from value-added services such as mobile messaging, search, and music increased 38.1% in 2006. Similar to U.S. counterparts such as AT&T (NYSE:T) and Verizon Wireless (a joint venture between Vodafone and Verizon Communications (NYSE:VZ)), these data services are making up a larger portion of revenue -- 23.5% of total operating revenue in 2006 compared to 20.6% in 2005.

This growth in additional services and data usage will further expand once the Chinese government permits the rollout of third-generation, or 3G, networks. These high-speed data networks will allow far more robust and feature-rich applications on cell phones and other devices such as Research In Motion's (NASDAQ:RIMM) BlackBerry. While these new broadband networks will require significant capital outlay, they've already proven to dramatically boost capacity as well as customer use of new applications in other regions of the world. All this adds up to a compelling road map of expanding revenue for China Mobile well into the future.

Yeah, but what about value?
Of course, plenty of stocks show strong fundamental growth similar to China Mobile yet are priced beyond perfection, making them unattractive investments. But an analysis I performed on China Mobile's valuation a few months back showed the firm to be undervalued relative to its peers, making it the best bet in the Chinese telecom space. The shares have risen 20% since this analysis, but still leave the company fairly priced based on the most recent results.

A leading company with the fundamental strength and operating track record of China Mobile is often priced at a premium to peers. Given the company's potential growth, China Mobile's P/E of 27.6 still compares favorably with other leading telecoms, such as America Movil's (NYSE:AMX) 25.4 and AT&T's 20.3. So while the shares are not a screaming buy, the fundamental strength of China Mobile's operations makes it hard for me to shun a leader to consider competing investments.

Collecting this call
Taken all together, China Mobile's story of rapid and profitable growth foretells great things to come for this wireless giant. Based on the low customer penetration and the infancy of the mobile data market in China, I expect China Mobile to capitalize on this trend for years to come and reward shareholders along the way.

Wait! You're not done with this Duel. Go back and read the other arguments, then vote for a winner.

China Mobile is a Motley Fool Global Gains recommendation. Investors can try out the market-beating newsletter service with an all-access 30-day free trial.

Fool contributor Dave Mock is not superstitious, as long as you don't count avoiding black cats and hopping over cracks. He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation. Vodafone is an Inside Value recommendation. The Fool's disclosure policy always lands on its feet, even with peanut butter toast on its back.