It is easy to imagine that institutional investors will all have to take a close look at the company soon. PCCW has become one of Hong Kong’s most liquid stocks and is soaring up the charts in terms of market capitalization as retail investors leap on board. The company’s fundamental attraction is nicely explained by one analyst when he says: “There are 110 million cable subscribers in Asia and the Middle East. The company say they will capture 20 million of those cable subscribers within the next two years. Let’s assume they get just 10 million. If they have 10 million people paying them HK$30 a month, that amounts to HK$3.6 billion of net income. Pacific Century claim they will run margins of 20% to 30%. They might generate HK$720 million of net profit in one year. Put that on a PE multiple of 20 times and you arrive at a market cap of HK$14.4 billion. AOL [American Online] trades on a PE of230 times and Pacific Century’s market cap today is just HK$51 billion.

“If you believe the basic story, that the company will be able to deliver the Internet over the cable network through its satellites, then it does look compelling.”

BNP’sTambunan is even more enthusiastic. “Basically these guys are rolling out the most impressive war machine you will ever see and not only in this part of the world but globally,” he says. “It won’t be, ‘Hey, this is a great Hong Kong play’. No, this is going to be a significant play in both the Asian and global Internet markets. We have dubbed it Asia’s first e-chip and it will be the e-chip of e-chips.”