China Mobile's (NYSE:CHL) latest earnings announcement was received like a dropped call by investors last month, but don't switch off the phone just yet.

In April, the Hong Kong-based telecom giant said that it made 25.2 billion yuan ($3.7 billion) last quarter, just 5% more than in the same quarter last year. That was enough for the market to heave a sigh that the heady growth days are over. Among China's three big cellular operators, its earnings weren't nearly as disappointing as the disaster that befell China Telecom (NYSE:CHA), the operator's strongest upstart rival. However, they trailed China Unicom (NYSE:CHU), which grew its  bottom line at a much faster rate.

But that could well be the low point for China Mobile's growth for the year. Last week, it broke new ground in the People's Republic by announcing the largest cross-strait business deal in 60 years, agreeing to purchase a 12% stake in Taiwanese telecom giant Far EasTone Telecommunications for $528 million.

Taiwanese cellular development is light-years ahead of China's. China Mobile will thus get a leg up in research and development over its existing rivals -- as well as unprecedented access to Far EasTone's Taiwanese market share.

In addition, the largest inventory restocking cycle is underway in Asia since 2001, according to Tim Rocks, Asian research head at Macquarie Bank in Hong Kong. These cycles happen when retailers reload their store's shelves, and they have been a major plus for telco and tech-related Asian equities in the past.

After being run down an unprecedented 8% at the end of last year in the credit meltdown, retail stocking levels are at their lowest since 2001. However, indicators show a restocking cycle has begun. Now that stores are purchasing again, all those cell phones hitting the shelves will require new contracts.

Some of those orders will be for China Mobile's handset answer to the iPhone. (Talks between the company and Apple (NASDAQ:AAPL) fell apart earlier this year, when Apple refused to allow China Mobile to administer the App Store and its revenue.) The 2G Lenovo-designed OPhone will go on sale soon, while the 3G version will come out in the late spring, according to local reports. The OPhone is expected to feature Mobile China's own customized version of Google's (NASDAQ:GOOG) Android OS.

Beware, however: If inventory restocking fails to garner sales, a further round of destocking may come up in September. Inventory restocking cycles have historically been a six-month cycle, so any relief could prove temporary.

China Mobile is a company that raked in more than $10 billion in free cash flow last year. With a price-to-earnings ratio just greater than 11, with expanding market share, it's tough to see why anyone other than a redemption-riddled hedge fund would be selling right now.

Fool contributor Daniel Harrison owns no stocks featured in this article. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. The Fool's disclosure policy keeps the lights on for you.