China Mobile Ltd ROIC decreased on 2.6 pp from 14.0% to 11.4% in 2015 while Revenue increased on 2.6%
17/03/2016 • About China Mobile Ltd (
$941) • By InTwits
China Mobile Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Mobile Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.0%. At the same time it's in pair with industry average of 31.4%.
- CAPEX is quite volatile: 16,529 in 2015, 13,530 in 2014, 10,083 in 2013, 8,362 in 2012, 5,393 in 2011
- The company has business model with average profitability: ROIC is at 11.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Mobile Ltd ($941) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 527,999 | 581,835 | 630,177 | 651,509 | 668,335 | 2.6% |
| SG&A | 96,830 | 80,232 | 91,834 | 75,655 | 59,850 | -20.9% |
| EBITDA | 248,791 | 253,992 | 240,811 | 240,644 | 240,454 | -0.1% |
| Net Income | 125,870 | 129,274 | 121,692 | 109,218 | 108,539 | -0.6% |
Balance Sheet
|
|---|
| Cash | 86,259 | 70,906 | 44,931 | 73,076 | 79,842 | 9.3% |
| Short Term Debt | 68 | 68 | 68 | 5,249 | 7,274 | 38.6% |
| Long Term Debt | 28,617 | 28,619 | 4,989 | 4,992 | 4,995 | 0.1% |
Cash flow
|
|---|
| Capex | 124,414 | 125,024 | 140,041 | 175,701 | 173,693 | -1.1% |
Ratios
|
|---|
| Revenue growth | 8.8% | 10.2% | 8.3% | 3.4% | 2.6% | |
| EBITDA growth | 4.8% | 2.1% | -5.2% | -0.1% | -0.1% | |
| EBITDA Margin | 47.1% | 43.7% | 38.2% | 36.9% | 36.0% | -1.0% |
| Net Income Margin | 23.8% | 22.2% | 19.3% | 16.8% | 16.2% | -0.5% |
| SG&A, % of revenue | 18.3% | 13.8% | 14.6% | 11.6% | 9.0% | -2.7% |
| CAPEX, % of revenue | 23.6% | 21.5% | 22.2% | 27.0% | 26.0% | -1.0% |
| ROIC | 23.5% | 21.4% | 17.6% | 14.0% | 11.4% | -2.6% |
| ROE | 20.5% | 18.8% | 16.1% | 13.0% | 12.0% | -1.0% |
| Net Debt/EBITDA | -0.2x | -0.2x | -0.2x | -0.3x | -0.3x | -0.0x |
Revenue and profitability
The company's Revenue increased on 2.6% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.1 pp from 15.2% to 16.3% in 2015.
SG&A as a % of Revenue decreased on 2.7 pp from 11.6% to 9.0% in 2015.
Net Income marign decreased slightly on 0.52 pp from 16.8% to 16.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Mobile Ltd had CAPEX/Revenue of 26.0%. China Mobile Ltd's CAPEX/Revenue increased on 4.5 pp from 21.5% in 2012 to 26.0% in 2015. For the last three years the average CAPEX/Revenue was 25.1%.The company invested a large share of EBITDA (72.2%) to CAPEX.
Return on investment
The company operates at good ROE (12.03%) while ROIC is low (11.43%). ROIC decreased on 2.6 pp from 14.0% to 11.4% in 2015. ROE decreased slightly on 1.0 pp from 13.0% to 12.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.3x and Debt / EBITDA is 0.1x. Net Debt / EBITDA decreased slightly on 0.020x from -0.3x to -0.3x in 2015. Debt surged on 19.8% in 2015 while cash increased on 9.3% in 2015.
Management team
The company's CEO is Li Yue. Li Yue has 8 years tenure at the company.
Appendix 1: Peers in Telecommunications
Below we provide China Mobile 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 (53 companies) | 12.9% | 8.7% | 8.1% | 7.5% | 9.1% |
|---|
| China Mobile Ltd ($941) | | 10.2% | 8.3% | 3.4% | 2.6% |
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 (48 companies) | 28.1% | 23.8% | 27.2% | 26.6% | 38.5% |
|---|
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% | 82.4% |
| 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 (53 companies) | 9.8% | 8.3% | 6.1% | 7.5% | 13.4% |
|---|
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | 36.0% |
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% | 52.8% |
| 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 (52 companies) | 3.0% | 2.3% | 3.6% | 3.4% | 2.5% |
|---|
| China Mobile Ltd ($941) | 23.6% | 21.5% | 22.2% | 27.0% | 26.0% |
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 (53 companies) | 7.1% | 6.0% | 5.6% | 5.8% | 6.2% |
|---|
| China Mobile Ltd ($941) | 23.5% | 21.4% | 17.6% | 14.0% | 11.4% |
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 (38 companies) | -0.2x | -0.2x | 0.6x | 0.7x | 1.2x |
|---|
| China Mobile Ltd ($941) | -0.2x | -0.2x | -0.2x | -0.3x | -0.3x |
