Telecom Service One Holdings Ltd EBITDA decreased on 9.7% and EBITDA Margin decreased slightly on 1.8 pp from 26.1% to 24.4%
22/06/2016 • About Telecom Service One Holdings Ltd (
$8145) • By InTwits
Telecom Service One Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 24.4% in FY2016, 26.1% in FY2015, 20.5% in FY2014, 7.9% in FY2013, 28.1% in FY2012
- Telecom Service One Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 9.3%.
- CAPEX is quite volatile: 2.2 in FY2016, 1.8 in FY2015, 1.3 in FY2014, 5.1 in FY2013, 6.3 in FY2012
- The company has highly profitable business model: ROIC is at 37.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Telecom Service One Holdings Ltd ($8145) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 69.6 | 78.5 | 94.3 | 126.4 | 122.5 | -3.1% |
| Gross Profit | 30.6 | 32.4 | 42.1 | 59.2 | 54.4 | -8.0% |
| SG&A | | 19.2 | 13.2 | 16.3 | 15.3 | -6.3% |
| EBITDA | 19.6 | 6.2 | 19.3 | 33.0 | 29.9 | -9.7% |
| Net Income | 14.1 | 1.4 | 14.3 | 24.5 | 22.4 | -8.6% |
Balance Sheet
|
|---|
| Cash | 2.6 | 5.3 | 33.9 | 14.3 | 16.9 | 18.5% |
| Short Term Debt | 0.8 | 5.0 | 0.0 | 16.1 | 18.6 | 15.6% |
| Long Term Debt | 2.2 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 6.3 | 5.1 | 1.3 | 1.8 | 2.2 | 22.5% |
Ratios
|
|---|
| Revenue growth | 83.6% | 12.8% | 20.1% | 34.1% | -3.1% | |
| EBITDA growth | 224.5% | -68.3% | 211.9% | 70.9% | -9.7% | |
| Gross Margin | 44.0% | 41.2% | 44.7% | 46.8% | 44.4% | -2.4% |
| EBITDA Margin | 28.1% | 7.9% | 20.5% | 26.1% | 24.4% | -1.8% |
| Net Income Margin | 20.2% | 1.8% | 15.2% | 19.4% | 18.3% | -1.1% |
| SG&A, % of revenue | | 24.5% | 14.0% | 12.9% | 12.5% | -0.4% |
| CAPEX, % of revenue | 9.0% | 6.5% | 1.3% | 1.4% | 1.8% | 0.4% |
| ROIC | 95.0% | 5.4% | 26.7% | 39.8% | 37.4% | -2.4% |
| ROE | 94.3% | 5.1% | 27.1% | 38.3% | 41.0% | 2.6% |
| Net Debt/EBITDA | 0.0x | -0.1x | -1.8x | 0.1x | 0.1x | 0.0x |
Revenue and profitability
The company's Revenue decreased on 3.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -22.6% to -15.2% in FY2016.
Gross Margin decreased on 2.4 pp from 46.8% to 44.4% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 1.1 pp from 19.4% to 18.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2016. Telecom Service One Holdings Ltd showed decline in CAPEX/Revenue of 4.6 pp from 6.5% in FY2013 to 1.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at high and attractive ROIC (37.37%) and ROE (40.97%). ROIC decreased on 2.4 pp from 39.8% to 37.4% in FY2016. ROE increased on 2.6 pp from 38.3% to 41.0% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 0.6x. Net Debt / EBITDA showed almost no change in FY2016. Debt jumped on 15.6% while cash jumped on 18.5%.
Appendix 1: Peers in Telecommunications
Below we provide Telecom Service One 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 107.4% | -82.2% | 8,010.0% | |
| Hanny Holdings Ltd ($275) | 236.4% | 131.2% | -85.2% | 349.3% | |
| CCT Fortis Holdings Ltd ($138) | -24.1% | -55.3% | -71.3% | 207.1% | |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | -8.5% | -45.9% | -56.2% | 111.6% | |
| China Trends Holdings Ltd ($8171) | 167.0% | -70.2% | -16.7% | 106.0% | |
| |
|---|
| Median (52 companies) | 8.7% | 8.1% | 9.6% | 6.1% | 2.0% |
|---|
| Telecom Service One Holdings Ltd ($8145) | | 12.8% | 20.1% | 34.1% | -3.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HKBN Ltd ($1310) | | 84.3% | 86.5% | 86.9% | |
| Netel Technology Holdings Ltd ($8256) | 27.9% | 42.1% | 54.9% | 72.3% | |
| Great World Co Holdings Ltd ($8003) | -11.0% | 43.0% | 45.5% | 67.9% | |
| APT Satellite Holdings Ltd ($1045) | 58.7% | 64.1% | 62.5% | 61.0% | |
| Cisco Systems Inc ($4333) | 61.2% | 60.6% | 58.9% | 60.4% | |
| |
|---|
| Median (49 companies) | 23.6% | 24.3% | 25.0% | 22.7% | 30.6% |
|---|
| Telecom Service One Holdings Ltd ($8145) | 44.0% | 41.2% | 44.7% | 46.8% | 44.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 86.5% | 85.8% | 81.6% | 82.4% | |
| APT Satellite Holdings Ltd ($1045) | 81.0% | 78.9% | 77.5% | 78.8% | |
| Synertone Communication Corp ($1613) | 44.9% | 48.5% | 49.4% | 51.5% | |
| HKBN Ltd ($1310) | | 39.2% | 40.1% | 39.0% | |
| HKT Trust & HKT Ltd ($6823) | 36.3% | 35.0% | 35.9% | 34.9% | |
| |
|---|
| Median (52 companies) | 6.7% | 5.5% | 5.4% | 8.3% | 10.0% |
|---|
| Telecom Service One Holdings Ltd ($8145) | 28.1% | 7.9% | 20.5% | 26.1% | 24.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| APT Satellite Holdings Ltd ($1045) | 74.3% | 2.5% | 27.2% | 115.8% | |
| Hong Kong Television Network Ltd ($1137) | 12,435.9% | 504.9% | 1,283.5% | 79.4% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 93.8% | 71.7% | 75.0% | 52.8% | |
| China Fiber Optic Network System Group Ltd ($3777) | 4.8% | 16.3% | 13.1% | 31.9% | |
| Directel Holdings Ltd ($8337) | 2.1% | 0.1% | 0.6% | 30.2% | |
| |
|---|
| Median (52 companies) | 2.1% | 2.9% | 3.1% | 2.6% | 3.0% |
|---|
| Telecom Service One Holdings Ltd ($8145) | 9.0% | 6.5% | 1.3% | 1.4% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| VTech Holdings Ltd ($303) | 37.6% | 39.5% | 40.0% | 39.8% | 37.9% |
| Coolpad Group Ltd ($2369) | 8.1% | 6.0% | 9.6% | 29.1% | |
| Telecom Digital Holdings Ltd ($8336) | | 13.3% | 20.2% | 18.9% | 16.7% |
| SmarTone Telecommunications Holdings Ltd ($315) | 37.2% | 23.1% | 12.8% | 17.7% | |
| TCL Communication Technology Holdings Ltd ($2618) | -1.6% | 6.0% | 17.2% | 13.4% | |
| |
|---|
| Median (53 companies) | 7.1% | 6.0% | 5.8% | 5.4% | 27.3% |
|---|
| Telecom Service One Holdings Ltd ($8145) | 95.0% | 5.4% | 26.7% | 39.8% | 37.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CCT Land Holdings Ltd ($261) | 10.1x | 23.8x | 48.4x | 44.8x | |
| China Energine International Holdings Ltd ($1185) | | | 13.3x | 31.7x | |
| China Ground Source Energy Industry Group Ltd ($8128) | -1.6x | 3.5x | 14.3x | 11.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.0x | -1.3x | 12.5x | 7.6x | |
| China All Access Holdings Ltd ($633) | 0.9x | 1.8x | 5.2x | 5.6x | |
| |
|---|
| Median (38 companies) | -0.4x | 0.7x | 1.0x | 0.8x | 0.4x |
|---|
| Telecom Service One Holdings Ltd ($8145) | 0.0x | -0.1x | -1.8x | 0.1x | 0.1x |
