Hutchison Telecommunications Hong Kong Holdings Ltd revenue jumped on 35.3% in 2015 while EBITDA Margin decreased on 3.8 pp from 16.4% to 12.6%
29/02/2016 • About Hutchison Telecommunications Hong Kong Holdings Ltd (
$215) • By InTwits
Hutchison Telecommunications Hong Kong Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hutchison Telecommunications Hong Kong Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.3%. At the same time it's in pair with industry average of 14.4%.
- CAPEX is quite volatile: 1,293 in 2015, 3,161 in 2014, 5,204 in 2013, 3,669 in 2012, 3,412 in 2011
- The company has business model with low profitability: ROIC is at 8.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hutchison Telecommunications Hong Kong Holdings Ltd ($215) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,407 | 15,536 | 12,777 | 16,296 | 22,042 | 35.3% |
| Gross Profit | 8,744 | 9,028 | 8,834 | 8,583 | 7,979 | -7.0% |
| SG&A | 856 | 398 | 359 | 339 | | -100.0% |
| EBITDA | 2,611 | 3,008 | 2,674 | 2,679 | 2,788 | 4.1% |
| Net Income | 1,020 | 1,215 | 916 | 833 | 915 | 9.8% |
Balance Sheet
|
|---|
| Cash | 182 | 182 | 209 | 359 | 1,021 | 184.4% |
| Short Term Debt | 3,853 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 3,746 | 4,571 | 3,952 | 3,962 | 0.3% |
Cash flow
|
|---|
| Capex | 1,202 | 1,616 | 1,257 | 1,208 | 1,053 | -12.8% |
Ratios
|
|---|
| Revenue growth | 35.7% | 15.9% | -17.8% | 27.5% | 35.3% | |
| EBITDA growth | 19.0% | 15.2% | -11.1% | 0.2% | 4.1% | |
| Gross Margin | 65.2% | 58.1% | 69.1% | 52.7% | 36.2% | -16.5% |
| EBITDA Margin | 19.5% | 19.4% | 20.9% | 16.4% | 12.6% | -3.8% |
| Net Income Margin | 7.6% | 7.8% | 7.2% | 5.1% | 4.2% | -1.0% |
| SG&A, % of revenue | 6.4% | 2.6% | 2.8% | 2.1% | | -2.1% |
| CAPEX, % of revenue | 9.0% | 10.4% | 9.8% | 7.4% | 4.8% | -2.6% |
| ROIC | 10.3% | 11.8% | 8.6% | 8.5% | 8.8% | 0.3% |
| ROE | 9.8% | 11.3% | 8.3% | 7.5% | 8.0% | 0.6% |
| Net Debt/EBITDA | 1.4x | 1.2x | 1.6x | 1.3x | 1.1x | -0.3x |
Revenue and profitability
The company's Revenue jumped on 35.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 7.9% to 10.9% in 2015.
Gross Margin dropped on 16.5 pp from 52.7% to 36.2% in 2015.
Net Income marign decreased slightly on 0.96 pp from 5.1% to 4.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Hutchison Telecommunications Hong Kong Holdings Ltd had CAPEX/Revenue of 4.8%. Hutchison Telecommunications Hong Kong Holdings Ltd showed decline in CAPEX/Revenue of 5.6 pp from 10.4% in 2012 to 4.8% in 2015. It's average level of CAPEX/Revenue for the last three years was 7.3%.
Return on investment
The company operates at low ROIC (8.79%) and ROE (8.02%). ROIC showed almost no change in 2015. ROE increased slightly on 0.56 pp from 7.5% to 8.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.1x and Debt / EBITDA is 1.4x. Net Debt / EBITDA dropped on 0.3x from 1.3x to 1.1x in 2015. Debt showed almost no change in 2015 while cash surged on 184% in 2015.
Appendix 1: Peers in Telecommunications
Below you can find Hutchison Telecommunications Hong Kong 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 (51 companies) | 11.5% | 8.7% | 8.3% | 6.9% | 14.0% |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | | 15.9% | -17.8% | 27.5% | 35.3% |
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% | 48.6% |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 65.2% | 58.1% | 69.1% | 52.7% | 36.2% |
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% | 30.6% |
| |
|---|
| Median (51 companies) | 14.0% | 9.5% | 6.7% | 7.9% | 19.9% |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 19.5% | 19.4% | 20.9% | 16.4% | 12.6% |
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% | 2.8% |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 9.0% | 10.4% | 9.8% | 7.4% | 4.8% |
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% | 7.7% |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 10.3% | 11.8% | 8.6% | 8.5% | 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 | 2.0x |
|---|
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 1.4x | 1.2x | 1.6x | 1.3x | 1.1x |
