HKT Trust & HKT Ltd Net Income surged on 23.8% in 2016 while Revenue decreased on 2.5%
13/01/2017 • About HKT Trust & HKT Ltd (
$6823) • By InTwits
HKT Trust & HKT Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HKT Trust & HKT Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.7%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: 709 in FY2016, 1,622 in FY2015, 1,631 in FY2014, 1,181 in FY2013, 913 in FY2012
- The company has business model with low profitability: ROIC is at 8.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HKT Trust & HKT Ltd ($6823) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 21,081 | 22,832 | 28,823 | 34,729 | 33,847 | -2.5% |
| Gross Profit | 12,054 | 12,715 | 16,770 | 19,190 | 19,402 | 1.1% |
| SG&A | 4,385 | 4,801 | 6,530 | 7,085 | 6,715 | -5.2% |
| EBITDA | 7,661 | 7,990 | 10,345 | 12,136 | 12,602 | 3.8% |
| Net Income | 1,610 | 2,460 | 2,991 | 3,949 | 4,889 | 23.8% |
Balance Sheet
|
|---|
| Cash | 2,401 | 2,134 | 3,613 | 3,768 | 2,882 | -23.5% |
| Short Term Debt | 8,462 | 0 | 3,877 | 3,879 | 0 | -100.0% |
| Long Term Debt | 15,644 | 24,022 | 32,549 | 32,436 | 38,193 | 17.7% |
Cash flow
|
|---|
| Capex | 1,906 | 1,980 | 2,510 | 3,037 | 2,835 | -6.7% |
Ratios
|
|---|
| Revenue growth | 6.3% | 8.3% | 26.2% | 20.5% | -2.5% | |
| EBITDA growth | 3.6% | 4.3% | 29.5% | 17.3% | 3.8% | |
| Gross Margin | 57.2% | 55.7% | 58.2% | 55.3% | 57.3% | 2.1% |
| EBITDA Margin | 36.3% | 35.0% | 35.9% | 34.9% | 37.2% | 2.3% |
| Net Income Margin | 7.6% | 10.8% | 10.4% | 11.4% | 14.4% | 3.1% |
| SG&A, % of revenue | 20.8% | 21.0% | 22.7% | 20.4% | 19.8% | -0.6% |
| CAPEX, % of revenue | 9.0% | 8.7% | 8.7% | 8.7% | 8.4% | -0.4% |
| ROIC | 5.2% | 5.8% | 6.6% | 7.7% | 8.6% | 0.9% |
| ROE | 5.2% | 8.0% | 8.7% | 10.5% | 12.7% | 2.3% |
| Net Debt/EBITDA | 2.8x | 2.7x | 3.2x | 2.7x | 2.8x | 0.1x |
Revenue and profitability
HKT Trust & HKT Ltd's Revenue decreased on 2.5%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.3 pp from 34.9% to 37.2% in 2016.
Gross Margin increased on 2.1 pp from 55.3% to 57.3% in 2016. SG&A as a % of Revenue decreased slightly on 0.56 pp from 20.4% to 19.8% in 2016.
Net Income marign increased on 3.1 pp from 11.4% to 14.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.4% in 2016. The company's CAPEX/Revenue showed almost no change from 2013 to 2016. For the last three years the average CAPEX/Revenue was 8.6%.
Return on investment
The company operates at good ROE (12.75%) while ROIC is low (8.58%). ROIC increased slightly on 0.92 pp from 7.7% to 8.6% in 2016. ROE increased on 2.3 pp from 10.5% to 12.7% in 2016.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA surged on 0.1x from 2.7x to 2.8x in 2016. Debt increased on 5.2% while cash dropped on 23.5%.
Appendix 1: Peers in Telecommunications
Below we provide HKT Trust & HKT 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) | | 131.2% | -85.2% | 349.3% | -78.5% |
| 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% | 9.6% | 9.6% | 6.1% | -1.4% |
|---|
| HKT Trust & HKT Ltd ($6823) | | 8.3% | 26.2% | 20.5% | -2.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HKBN Ltd ($1310) | | 84.3% | 86.5% | 86.9% | 83.8% |
| Netel Technology Holdings Ltd ($8256) | 27.9% | 42.1% | 54.9% | 72.3% | 73.1% |
| Great World Co Holdings Ltd ($8003) | -11.0% | 43.0% | 45.5% | 67.9% | 42.0% |
| 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% | 62.9% |
| |
|---|
| Median (49 companies) | 23.6% | 24.3% | 25.0% | 22.7% | 35.6% |
|---|
| HKT Trust & HKT Ltd ($6823) | 57.2% | 55.7% | 58.2% | 55.3% | 57.3% |
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% | -77.6% |
| HKBN Ltd ($1310) | | 39.2% | 40.1% | 39.0% | 35.2% |
| PCCW Ltd ($8) | 32.0% | 31.9% | 39.2% | 30.6% | |
| |
|---|
| Median (52 companies) | 6.7% | 5.5% | 5.4% | 8.3% | 7.2% |
|---|
| HKT Trust & HKT Ltd ($6823) | 36.3% | 35.0% | 35.9% | 34.9% | 37.2% |
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% | 2.9% | 2.6% | 3.6% |
|---|
| HKT Trust & HKT Ltd ($6823) | 9.0% | 8.7% | 8.7% | 8.7% | 8.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telecom Service One Holdings Ltd ($8145) | 95.0% | 5.4% | 26.7% | 39.8% | 37.4% |
| 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% | 14.5% |
| |
|---|
| Median (53 companies) | 7.7% | 6.0% | 5.8% | 5.4% | 1.0% |
|---|
| HKT Trust & HKT Ltd ($6823) | 5.2% | 5.8% | 6.6% | 7.7% | 8.6% |
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 | 0.6x | 0.6x | 0.5x | 0.7x |
|---|
| HKT Trust & HKT Ltd ($6823) | 2.8x | 2.7x | 3.2x | 2.7x | 2.8x |
