CITIC Telecom International Holdings Ltd reports 10.8% Net Income growth and 2.0% Revenue growth
25/02/2016 • About CITIC Telecom International Holdings Ltd (
$1883) • By InTwits
CITIC Telecom International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CITIC Telecom International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 5.8%.
- CAPEX is quite volatile: 734 in 2015, 719 in 2014, 471 in 2013, 160 in 2012, 221 in 2011
- The company has business model with low profitability: ROIC is at 8.8%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CITIC Telecom International Holdings Ltd ($1883) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,197 | 3,610 | 6,019 | 8,184 | 8,350 | 2.0% |
| Gross Profit | | 1,082 | 2,083 | 3,304 | 3,408 | 3.2% |
| EBITDA | 502 | 504 | 1,953 | 1,918 | 2,010 | 4.8% |
| Net Income | 458 | 461 | 1,068 | 724 | 802 | 10.8% |
Balance Sheet
|
|---|
| Cash | 253 | 351 | 855 | 1,393 | 1,074 | -22.9% |
| Short Term Debt | 123 | 262 | 100 | 100 | 100 | 0.0% |
| Long Term Debt | 0 | 0 | 7,617 | 7,868 | 7,372 | -6.3% |
Cash flow
|
|---|
| Capex | 221 | 160 | 471 | 719 | 734 | 2.1% |
Ratios
|
|---|
| Revenue growth | 7.8% | 12.9% | 66.7% | 36.0% | 2.0% | |
| EBITDA growth | 5.4% | 0.5% | 287.3% | -1.8% | 4.8% | |
| Gross Margin | | 30.0% | 34.6% | 40.4% | 40.8% | 0.4% |
| EBITDA Margin | 15.7% | 14.0% | 32.5% | 23.4% | 24.1% | 0.6% |
| Net Income Margin | 14.3% | 12.8% | 17.7% | 8.8% | 9.6% | 0.8% |
| CAPEX, % of revenue | 6.9% | 4.4% | 7.8% | 8.8% | 8.8% | 0.0% |
| ROIC | 11.5% | 9.7% | 16.8% | 8.3% | 8.8% | 0.5% |
| ROE | 15.0% | 14.0% | 22.2% | 11.4% | 11.8% | 0.4% |
| Net Debt/EBITDA | -0.3x | -0.2x | 3.5x | 3.4x | 3.2x | -0.2x |
Revenue and profitability
CITIC Telecom International Holdings Ltd's Revenue increased on 2.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.2 pp from 5.1% to -2.1% in 2015.
Gross Margin showed almost no change in 2015.
Net Income marign increased slightly on 0.76 pp from 8.8% to 9.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.8% in 2015. CAPEX/Revenue increased on 4.4 pp from 4.4% in 2012 to 8.8% in 2015. For the last three years the average CAPEX/Revenue was 8.5%.
Return on investment
The company operates at low ROIC (8.85%) and ROE (11.80%). ROIC increased slightly on 0.51 pp from 8.3% to 8.8% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.7x. Net Debt / EBITDA dropped on 0.2x from 3.4x to 3.2x in 2015. Debt decreased on 6.2% in 2015 while cash dropped on 22.9% in 2015.
Management team
CITIC Telecom International Holdings Ltd's CEO is Lin Zhenhui "Tiger". Lin Zhenhui "Tiger" has 3 years tenure at the company. The company's CFO Chan Tin Wai has spent 12 years at the company.
Appendix 1: Peers in Telecommunications
Below we provide CITIC Telecom International Holdings Ltd benchmarking against other companies in Telecommunications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 (51 companies) | 11.5% | 8.7% | 8.1% | 6.9% | 15.2% |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | | 12.9% | 66.7% | 36.0% | 2.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HKBN Ltd ($1310) | | | 84.3% | 86.5% | 86.9% |
| 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% | |
| |
|---|
| Median (45 companies) | 29.9% | 25.5% | 28.1% | 27.1% | 48.6% |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | | 30.0% | 34.6% | 40.4% | 40.8% |
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% |
| HKBN Ltd ($1310) | | | 39.2% | 40.1% | 39.0% |
| PCCW Ltd ($8) | 31.4% | 32.0% | 31.9% | 39.2% | |
| |
|---|
| Median (51 companies) | 14.0% | 9.5% | 6.7% | 7.9% | 14.5% |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | 15.7% | 14.0% | 32.5% | 23.4% | 24.1% |
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 (50 companies) | 3.0% | 2.5% | 3.7% | 4.1% | 2.3% |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | 6.9% | 4.4% | 7.8% | 8.8% | 8.8% |
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 (51 companies) | 7.1% | 5.2% | 5.4% | 5.7% | 0.9% |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | 11.5% | 9.7% | 16.8% | 8.3% | 8.8% |
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 (36 companies) | -0.2x | -0.2x | 0.6x | 0.7x | 0.8x |
|---|
| CITIC Telecom International Holdings Ltd ($1883) | -0.3x | -0.2x | 3.5x | 3.4x | 3.2x |
