APT Satellite Holdings Ltd reports 307% CAPEX growth while 4.3% Revenue decline
22/03/2016 • About APT Satellite Holdings Ltd (
$1045) • By InTwits
APT Satellite Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- APT Satellite Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 75.0%. At the same time it's a lot of higher than industry average of 33.2%.
- CAPEX is quite volatile: 1,383 in 2015, 340 in 2014, 28.6 in 2013, 669 in 2012, 1,177 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.
APT Satellite Holdings Ltd ($1045) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 758 | 901 | 1,138 | 1,248 | 1,194 | -4.3% |
| Gross Profit | 396 | 528 | 730 | 780 | 729 | -6.6% |
| SG&A | 95 | 115 | 134 | 118 | 132 | 11.5% |
| EBITDA | 581 | 730 | 898 | 967 | 941 | -2.7% |
| Net Income | 281 | 354 | 545 | 508 | 514 | 1.1% |
Balance Sheet
|
|---|
| Cash | 240 | 157 | 90 | 609 | 581 | -4.6% |
| Short Term Debt | 180 | 0 | 108 | 156 | 171 | 9.4% |
| Long Term Debt | 1,228 | 1,334 | 1,133 | 870 | 544 | -37.4% |
Cash flow
|
|---|
| Capex | 1,177 | 669 | 29 | 340 | 1,383 | 306.9% |
Ratios
|
|---|
| Revenue growth | 5.4% | 18.8% | 26.4% | 9.6% | -4.3% | |
| EBITDA growth | -3.0% | 25.5% | 23.0% | 7.7% | -2.7% | |
| Gross Margin | 52.3% | 58.7% | 64.1% | 62.5% | 61.0% | -1.5% |
| EBITDA Margin | 76.7% | 81.0% | 78.9% | 77.5% | 78.8% | 1.3% |
| Net Income Margin | 37.0% | 39.4% | 47.9% | 40.7% | 43.0% | 2.3% |
| SG&A, % of revenue | 12.5% | 12.7% | 11.7% | 9.5% | 11.0% | 1.6% |
| CAPEX, % of revenue | 155.2% | 74.3% | 2.5% | 27.2% | 115.8% | 88.5% |
| ROIC | 6.9% | 9.2% | 12.2% | 12.6% | 11.4% | -1.2% |
| ROE | 10.7% | 12.1% | 16.4% | 13.4% | 12.1% | -1.2% |
| Net Debt/EBITDA | 2.0x | 1.6x | 1.3x | 0.4x | 0.1x | -0.3x |
Revenue and profitability
APT Satellite Holdings Ltd's Revenue decreased on 4.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.3 pp from 77.5% to 78.8% in 2015.
Gross Margin decreased slightly on 1.5 pp from 62.5% to 61.0% in 2015. SG&A as a % of Revenue increased slightly on 1.6 pp from 9.5% to 11.0% in 2015.
Net Income marign increased on 2.3 pp from 40.7% to 43.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
APT Satellite Holdings Ltd's CAPEX/Revenue was 116% in 2015. CAPEX/Revenue jumped on 41.4 pp from 74.3% in 2012 to 116% in 2015. It's average CAPEX/Revenue for the last three years was 48.5%.APT Satellite Holdings Ltd has spent a lot to CAPEX (147% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at good ROE (12.15%) while ROIC is low (11.41%). ROIC decreased slightly on 1.2 pp from 12.6% to 11.4% in 2015. ROE decreased slightly on 1.2 pp from 13.4% to 12.1% in 2015.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 0.4x to 0.1x in 2015. Debt dropped on 30.3% in 2015 while cash decreased on 4.6% in 2015.
Appendix 1: Peers in Telecommunications
Below we provide APT Satellite 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) | | -13.8% | 29.1% | 85.6% | -3.8% |
| Vodatel Networks Holdings Ltd ($8033) | | -5.9% | -4.6% | 81.7% | -25.8% |
| 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) | 16.4% | 8.7% | 8.1% | 6.9% | 4.3% |
|---|
| APT Satellite Holdings Ltd ($1045) | | 18.8% | 26.4% | 9.6% | -4.3% |
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% |
| 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 (47 companies) | 28.0% | 22.1% | 25.8% | 26.1% | 29.4% |
|---|
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | 61.0% |
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% |
| 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% |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | 36.0% |
| |
|---|
| Median (53 companies) | 9.8% | 8.3% | 6.1% | 7.5% | 10.6% |
|---|
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | 78.8% |
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% |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| China Mobile Ltd ($941) | 23.6% | 21.5% | 22.2% | 27.0% | 26.0% |
| |
|---|
| Median (52 companies) | 3.0% | 2.3% | 3.7% | 3.4% | 2.5% |
|---|
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | 115.8% |
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 (53 companies) | 7.4% | 6.0% | 5.6% | 5.8% | 6.2% |
|---|
| APT Satellite Holdings Ltd ($1045) | 6.9% | 9.2% | 12.2% | 12.6% | 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 | 0.1x |
|---|
| APT Satellite Holdings Ltd ($1045) | 2.0x | 1.6x | 1.3x | 0.4x | 0.1x |
