HKT Trust & HKT Ltd Net Income surged on 32.0% in 2015 and EBITDA Margin decreased slightly on 0.95 pp from 35.9% to 34.9%
25/02/2016 • About HKT Trust & HKT Ltd (
$6823) • By InTwits
HKT Trust & HKT Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HKT Trust & HKT Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.6%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 385 in 2015, 667 in 2014, 774 in 2013, 1,195 in 2012, 1,862 in 2011
- The company has business model with low profitability: ROIC is at 7.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x 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.
HKT Trust & HKT Ltd ($6823) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,825 | 21,081 | 22,832 | 28,823 | 34,729 | 20.5% |
| Gross Profit | 11,676 | 12,054 | 12,715 | 16,770 | 19,190 | 14.4% |
| SG&A | 4,260 | 4,385 | 4,801 | 6,530 | 7,085 | 8.5% |
| EBITDA | 7,395 | 7,661 | 7,990 | 10,345 | 12,136 | 17.3% |
| Net Income | 1,221 | 1,610 | 2,460 | 2,991 | 3,949 | 32.0% |
Balance Sheet
|
|---|
| Cash | 2,226 | 2,401 | 2,134 | 3,613 | 3,768 | 4.3% |
| Short Term Debt | 31 | 8,462 | 0 | 3,877 | 3,879 | 0.1% |
| Long Term Debt | 23,470 | 15,644 | 24,022 | 32,549 | 32,436 | -0.3% |
Cash flow
|
|---|
| Capex | 1,569 | 1,906 | 1,980 | 2,510 | 3,037 | 21.0% |
Ratios
|
|---|
| Revenue growth | 7.0% | 6.3% | 8.3% | 26.2% | 20.5% | |
| EBITDA growth | 0.4% | 3.6% | 4.3% | 29.5% | 17.3% | |
| Gross Margin | 58.9% | 57.2% | 55.7% | 58.2% | 55.3% | -2.9% |
| EBITDA Margin | 37.3% | 36.3% | 35.0% | 35.9% | 34.9% | -0.9% |
| Net Income Margin | 6.2% | 7.6% | 10.8% | 10.4% | 11.4% | 1.0% |
| SG&A, % of revenue | 21.5% | 20.8% | 21.0% | 22.7% | 20.4% | -2.3% |
| CAPEX, % of revenue | 7.9% | 9.0% | 8.7% | 8.7% | 8.7% | 0.0% |
| ROIC | 5.6% | 5.2% | 5.8% | 6.6% | 7.7% | 1.0% |
| ROE | 4.9% | 5.2% | 8.0% | 8.7% | 10.5% | 1.7% |
| Net Debt/EBITDA | 2.9x | 2.8x | 2.7x | 3.2x | 2.7x | -0.5x |
Revenue and profitability
The company's Revenue jumped on 20.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 12.2% to 14.1% in 2015.
Gross Margin decreased on 2.9 pp from 58.2% to 55.3% in 2015. SG&A as a % of Revenue decreased on 2.3 pp from 22.7% to 20.4% in 2015.
Net Income marign increased slightly on 0.99 pp from 10.4% to 11.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 8.7%. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 8.7%.
Return on investment
The company operates at low ROIC (7.66%) and ROE (10.45%). ROIC increased slightly on 1.0 pp from 6.6% to 7.7% in 2015. ROE increased slightly on 1.7 pp from 8.7% to 10.5% in 2015.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.2x to 2.7x in 2015. Debt showed almost no change in 2015 while cash increased on 4.3% in 2015.
Appendix 1: Peers in Telecommunications
Below you can find HKT Trust & HKT 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 (51 companies) | 11.5% | 9.1% | 8.1% | 6.9% | 8.8% |
|---|
| HKT Trust & HKT Ltd ($6823) | | 6.3% | 8.3% | 26.2% | 20.5% |
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) | 28.1% | 25.5% | 28.1% | 27.1% | 43.8% |
|---|
| HKT Trust & HKT Ltd ($6823) | 58.9% | 57.2% | 55.7% | 58.2% | 55.3% |
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% |
|---|
| HKT Trust & HKT Ltd ($6823) | 37.3% | 36.3% | 35.0% | 35.9% | 34.9% |
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% |
|---|
| HKT Trust & HKT Ltd ($6823) | 7.9% | 9.0% | 8.7% | 8.7% | 8.7% |
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) | 7.4% | 6.0% | 5.4% | 5.7% | 0.9% |
|---|
| HKT Trust & HKT Ltd ($6823) | 5.6% | 5.2% | 5.8% | 6.6% | 7.7% |
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 (36 companies) | -0.2x | -0.2x | 0.6x | 0.7x | 0.8x |
|---|
| HKT Trust & HKT Ltd ($6823) | 2.9x | 2.8x | 2.7x | 3.2x | 2.7x |
