TCL Communication Technology Holdings Ltd EBITDA decreased on 8.6% in 2015 and Revenue decreased on 7.0%
23/03/2016 • About TCL Communication Technology Holdings Ltd (
$2618) • By InTwits
TCL Communication Technology Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.6% in 2015, 4.7% in 2014, 3.2% in 2013, 0.1% in 2012, 6.6% in 2011
- TCL Communication Technology Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 10.5%.
- CAPEX is quite volatile: 584 in 2015, 684 in 2014, 484 in 2013, 246 in 2012, 399 in 2011
- The company has highly profitable business model: ROIC is at 13.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TCL Communication Technology Holdings Ltd ($2618) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,653 | 12,031 | 19,362 | 30,691 | 28,558 | -7.0% |
| Gross Profit | 2,328 | 2,097 | 3,672 | 5,918 | 6,032 | 1.9% |
| SG&A | 1,424 | 1,811 | 2,558 | 3,667 | 3,625 | -1.1% |
| EBITDA | 701 | 14 | 623 | 1,431 | 1,307 | -8.6% |
| Net Income | 800 | -208 | 313 | 1,093 | 1,057 | -3.3% |
Balance Sheet
|
|---|
| Cash | 1,187 | 970 | 142 | 473 | 566 | 19.5% |
| Short Term Debt | 7,222 | 5,726 | 2,968 | 3,941 | 2,803 | -28.9% |
| Long Term Debt | 0 | 310 | 196 | 0 | 178 | |
Cash flow
|
|---|
| Capex | 399 | 246 | 484 | 684 | 584 | -14.6% |
Ratios
|
|---|
| Revenue growth | 22.4% | 12.9% | 60.9% | 58.5% | -7.0% | |
| EBITDA growth | 4.6% | -98.0% | 4,242.6% | 129.7% | -8.6% | |
| Gross Margin | 21.9% | 17.4% | 19.0% | 19.3% | 21.1% | 1.8% |
| EBITDA Margin | 6.6% | 0.1% | 3.2% | 4.7% | 4.6% | -0.1% |
| Net Income Margin | 7.5% | -1.7% | 1.6% | 3.6% | 3.7% | 0.1% |
| SG&A, % of revenue | 13.4% | 15.1% | 13.2% | 11.9% | 12.7% | 0.7% |
| CAPEX, % of revenue | 3.7% | 2.0% | 2.5% | 2.2% | 2.0% | -0.2% |
| ROIC | 6.4% | -1.6% | 6.0% | 17.2% | 13.4% | -3.8% |
| ROE | 32.7% | -8.3% | 12.0% | 31.2% | 26.3% | -4.9% |
| Net Debt/EBITDA | 8.6x | 353.2x | 4.9x | 2.4x | 1.8x | -0.6x |
Revenue and profitability
The company's Revenue decreased on 7.0% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.5 pp from 29.2% to 30.7% in 2015.
Gross Margin increased slightly on 1.8 pp from 19.3% to 21.1% in 2015. SG&A as a % of Revenue increased slightly on 0.75 pp from 11.9% to 12.7% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 TCL Communication Technology Holdings Ltd had CAPEX/Revenue of 2.0%. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at high and attractive ROE (26.29%) while ROIC is a bit lower (13.39%). ROIC decreased on 3.8 pp from 17.2% to 13.4% in 2015. ROE decreased on 4.9 pp from 31.2% to 26.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is 2.3x. Net Debt / EBITDA dropped on 0.6x from 2.4x to 1.8x in 2015. Debt dropped on 24.3% in 2015 while cash surged on 19.5% in 2015.
Management team
TCL Communication Technology Holdings Ltd's CEO Guo Aiping "George" has spent 8 years at the company.
Appendix 1: Peers in Telecommunications
Below we provide TCL Communication Technology 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) | | 143.6% | 34.3% | 103.1% | -3.1% |
| 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) | 18.4% | 8.7% | 8.1% | 6.9% | 3.0% |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | | 12.9% | 60.9% | 58.5% | -7.0% |
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% | 61.0% |
| Hong Kong Television Network Ltd ($1137) | | -59.6% | -101.3% | 59.7% | |
| |
|---|
| Median (47 companies) | 28.1% | 25.5% | 28.1% | 27.1% | 26.6% |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | 21.9% | 17.4% | 19.0% | 19.3% | 21.1% |
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% | 78.8% |
| 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) | 14.0% | 9.5% | 6.7% | 7.9% | 10.4% |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | 6.6% | 0.1% | 3.2% | 4.7% | 4.6% |
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% | 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% | 115.8% |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| |
|---|
| Median (52 companies) | 3.0% | 2.5% | 3.7% | 4.1% | 2.5% |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | 3.7% | 2.0% | 2.5% | 2.2% | 2.0% |
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% |
| 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% | |
| ETS Group Ltd ($8031) | 41.8% | 21.5% | 31.9% | 14.5% | 12.1% |
| |
|---|
| Median (53 companies) | 7.4% | 6.3% | 5.6% | 5.8% | 6.4% |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | 13.4% |
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 | 31.7x |
| 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 | 0.4x | 0.2x |
|---|
| TCL Communication Technology Holdings Ltd ($2618) | 8.6x | 353.2x | 4.9x | 2.4x | 1.8x |
