SmarTone Telecommunications Holdings Ltd Net Income jumped on 74.2% in 2015 and Revenue surged on 40.9%
01/09/2015 • About SmarTone Telecommunications Holdings Ltd (
$315) • By InTwits
SmarTone Telecommunications Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SmarTone Telecommunications Holdings Ltd is a fast growth stock: FY2015 revenue growth was 40.9%, 5 year revenue CAGR was 36.4% at FY2015 ROIC 17.7%
- EBITDA Margin is declining: 15.7% in FY2015 vs. 19.5% in FY2014 vs. 32.2% in FY2011
- SmarTone Telecommunications Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.8%. At the same time it's in pair with industry average of 21.1%.
- CAPEX is quite volatile: 515 in 2015, 357 in 2014, 350 in 2013, 170 in 2012, 58.9 in 2011
- The company has highly profitable business model: ROIC is at 17.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SmarTone Telecommunications Holdings Ltd ($315) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,631 | 9,952 | 12,067 | 13,244 | 18,659 | 40.9% |
| EBITDA | 2,136 | 2,984 | 2,994 | 2,586 | 2,921 | 13.0% |
| Net Income | 754 | 1,023 | 843 | 537 | 935 | 74.2% |
Balance Sheet
|
|---|
| Cash | 820 | 1,268 | 646 | 1,837 | 2,304 | 25.4% |
| Short Term Debt | 550 | 0 | 65 | 101 | 124 | 23.2% |
| Long Term Debt | 0 | 66 | 2,530 | 2,739 | 2,844 | 3.8% |
Cash flow
|
|---|
| Capex | 680 | 809 | 1,255 | 824 | 757 | -8.1% |
Ratios
|
|---|
| Revenue growth | 67.6% | 50.1% | 21.2% | 9.8% | 40.9% | |
| EBITDA growth | 85.0% | 39.7% | 0.3% | -13.6% | 13.0% | |
| EBITDA Margin | 32.2% | 30.0% | 24.8% | 19.5% | 15.7% | -3.9% |
| Net Income Margin | 11.4% | 10.3% | 7.0% | 4.1% | 5.0% | 1.0% |
| CAPEX, % of revenue | 10.3% | 8.1% | 10.4% | 6.2% | 4.1% | -2.2% |
| ROIC | 30.2% | 37.2% | 23.1% | 12.8% | 17.7% | 4.9% |
| ROE | 27.0% | 34.2% | 27.7% | 17.4% | 26.6% | 9.2% |
| Net Debt/EBITDA | -0.1x | -0.4x | 0.7x | 0.4x | 0.2x | -0.2x |
Revenue and profitability
SmarTone Telecommunications Holdings Ltd's Revenue jumped on 40.9% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 19.5% to 15.7% in FY2015.
Net Income marign increased slightly on 0.96 pp from 4.1% to 5.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 SmarTone Telecommunications Holdings Ltd had CAPEX/Revenue of 4.1%. SmarTone Telecommunications Holdings Ltd showed decline in CAPEX/Revenue of 4.1 pp from 8.1% in FY2012 to 4.1% in FY2015. It's average CAPEX/Revenue for the last three years was 6.9%.
Return on investment
The company operates at high and attractive ROE (26.56%) while ROIC is a bit lower (17.69%). ROIC increased on 4.9 pp from 12.8% to 17.7% in FY2015. ROE increased on 9.2 pp from 17.4% to 26.6% in FY2015.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.4x to 0.2x in FY2015. Debt increased on 4.5% in FY2015 while cash surged on 25.4% in FY2015.
Appendix 1: Peers in Telecommunications
Below you can find SmarTone Telecommunications Holdings Ltd benchmarking vs. other companies in Telecommunications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Energine International Holdings Ltd ($1185) | -41.8% | 143.6% | 34.3% | 103.1% | |
| MOBI Development Co Ltd ($947) | -23.4% | -13.8% | 29.1% | 85.6% | |
| Vodatel Networks Holdings Ltd ($8033) | 34.4% | -5.9% | -4.6% | 81.7% | |
| Gold Tat Group International Ltd ($8266) | | 29.4% | 1,582.2% | 77.0% | 26.5% |
| Great World Co Holdings Ltd ($8003) | | 1,651.8% | -81.7% | 61.9% | -3.7% |
| |
|---|
| Median (49 companies) | 8.5% | 8.9% | 7.9% | 6.9% | 20.6% |
|---|
| SmarTone Telecommunications Holdings Ltd ($315) | | 50.1% | 21.2% | 9.8% | 40.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Synertone Communication Corp ($1613) | 65.4% | 68.1% | 64.1% | 70.5% | 50.3% |
| Zhi Cheng Holdings Ltd ($8130) | 61.6% | 45.9% | 41.0% | 64.0% | 19.6% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | |
| Hong Kong Television Network Ltd ($1137) | | -59.6% | -101.3% | 59.7% | |
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% |
| |
|---|
| Median (44 companies) | 31.8% | 26.8% | 29.0% | 28.1% | 46.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | |
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
| PCCW Ltd ($8) | 31.4% | 32.0% | 31.9% | 39.2% | |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | |
| |
|---|
| Median (49 companies) | 14.2% | 9.9% | 6.7% | 7.9% | -0.4% |
|---|
| SmarTone Telecommunications Holdings Ltd ($315) | 32.2% | 30.0% | 24.8% | 19.5% | 15.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | |
| Hanny Holdings Ltd ($275) | 80.8% | 19.8% | 11.6% | 28.3% | 0.2% |
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| |
|---|
| Median (49 companies) | 3.0% | 2.5% | 3.7% | 3.6% | 1.6% |
|---|
| SmarTone Telecommunications Holdings Ltd ($315) | 10.3% | 8.1% | 10.4% | 6.2% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | |
| China Fiber Optic Network System Group Ltd ($3777) | 23.1% | 18.8% | 17.6% | 16.6% | |
| China U-Ton Holdings Ltd ($6168) | 69.5% | 35.7% | 25.0% | 16.2% | |
| |
|---|
| Median (49 companies) | 6.9% | 5.6% | 5.6% | 5.8% | -1.6% |
|---|
| SmarTone Telecommunications Holdings Ltd ($315) | 30.2% | 37.2% | 23.1% | 12.8% | 17.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | |
| Synertone Communication Corp ($1613) | -0.3x | -0.4x | -2.2x | 4.8x | 2.5x |
| |
|---|
| Median (35 companies) | -0.2x | -0.1x | -0.0x | 0.9x | 0.7x |
|---|
| SmarTone Telecommunications Holdings Ltd ($315) | -0.1x | -0.4x | 0.7x | 0.4x | 0.2x |
