China Mobile Ltd EBITDA increased on 5.3% and Revenue increased on 4.5%
22/03/2018 • About China Mobile Ltd (
$941) • By InTwits
China Mobile Ltd reported 2017 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 25.6%. At the same time it's in pair with industry average of 26.8%.
- CAPEX is quite volatile: 292 in 2017, 481 in 2016, 327 in 2015, 1,270 in 2014, 252 in 2013
- The company has highly profitable business model: ROIC is at 12.4%
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 | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 630,177 | 651,509 | 668,335 | 708,421 | 740,514 | 4.5% |
| SG&A | 91,834 | 75,655 | 59,850 | | | |
| EBITDA | 240,811 | 240,644 | 240,454 | 257,120 | 270,867 | 5.3% |
| Net Income | 121,692 | 109,218 | 108,539 | 108,741 | 114,279 | 5.1% |
Balance Sheet
|
|---|
| Cash | 44,931 | 73,076 | 79,842 | 90,413 | 120,636 | 33.4% |
| Short Term Debt | 68 | 5,249 | 7,274 | 4,998 | 0 | -100.0% |
| Long Term Debt | 4,989 | 4,992 | 4,995 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 140,041 | 175,701 | 173,693 | 189,366 | 193,605 | 2.2% |
Ratios
|
|---|
| Revenue growth | 8.3% | 3.4% | 2.6% | 6.0% | 4.5% | |
| EBITDA growth | -5.2% | -0.1% | -0.1% | 6.9% | 5.3% | |
| EBITDA Margin | 38.2% | 36.9% | 36.0% | 36.3% | 36.6% | 0.3% |
| Net Income Margin | 19.3% | 16.8% | 16.2% | 15.3% | 15.4% | 0.1% |
| SG&A, % of revenue | 14.6% | 11.6% | 9.0% | | | 0.0% |
| CAPEX, % of revenue | 22.2% | 27.0% | 26.0% | 26.7% | 26.1% | -0.6% |
| ROIC | 17.6% | 14.0% | 11.4% | 12.6% | 12.4% | -0.1% |
| ROE | 16.1% | 13.0% | 12.0% | 11.5% | 11.6% | 0.2% |
| Net Debt/EBITDA | -0.2x | -0.3x | -0.3x | -0.3x | -0.4x | -0.1x |
China Mobile Ltd ($941) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 184,000 | 204,871 | 180,629 | 171,014 | 3.7% | 6.2% | 4.8% | 3.2% |
| Net Income | 24,800 | 37,875 | 29,425 | 22,179 | 3.8% | 3.3% | 6.9% | 7.5% |
Balance Sheet
|
|---|
Ratios
|
|---|
| Net Income Margin | 13.5% | 18.5% | 16.3% | 13.0% | 0.0% | -0.5% | 0.3% | 0.5% |
Revenue and profitability
The company's Revenue increased on 4.5%. Revenue growth showed slow down in 17Q4 - it was 3.2% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.0 pp from 69.9% to 75.0% in 2017.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 China Mobile Ltd had CAPEX/Revenue of 26.1%. The company showed small CAPEX/Revenue decline of 0.82 pp from 27.0% in 2014 to 26.1% in 2017. For the last three years the average CAPEX/Revenue was 26.3%.The company maintained rich investment policy and has spent a big chunk of EBITDA (71.5%) to CAPEX.
Return on investment
The company operates at good ROIC (12.44%) while ROE is low (11.63%). ROIC showed almost no change in 2017. ROE showed almost no change in 2017.
Leverage (Debt)
The company paid down all the debt in 2017. Cash jumped on 33.4%.
Appendix 1: Peers in Telecommunications
Below you can find China Mobile Ltd benchmarking vs. other companies in Telecommunications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Great World Co Holdings Ltd ($8003) | -81.7% | 61.9% | -3.7% | 1,112.5% | |
| Zheda Lande Scitech Ltd ($8106) | 6.9% | -21.6% | 34.3% | 117.3% | |
| Hong Kong Television Network Ltd ($1137) | 107.4% | -82.2% | 8,010.0% | 65.8% | |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | -45.9% | -56.2% | 111.6% | 55.3% | |
| CCT Fortis Holdings Ltd ($138) | -55.3% | -71.3% | 207.1% | 47.2% | |
| |
|---|
| Median (37 companies) | 9.8% | 9.6% | 6.1% | -2.4% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| HKBN Ltd ($1310) | 84.3% | 86.5% | 86.9% | 83.8% | |
| Netel Technology Holdings Ltd ($8256) | 42.1% | 54.9% | 72.3% | 73.1% | |
| Hutchison Telecommunications Hong Kong Holdings Ltd ($215) | 69.1% | 52.7% | 36.2% | 64.1% | |
| Cisco Systems Inc ($4333) | 60.6% | 58.9% | 60.4% | 62.9% | |
| HKT Trust & HKT Ltd ($6823) | 55.7% | 58.2% | 55.3% | 57.3% | |
| |
|---|
| Median (26 companies) | 24.3% | 25.0% | 22.7% | 33.5% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 85.8% | 81.6% | 82.4% | 81.5% | |
| Champion Technology Holdings Ltd ($92) | 41.1% | 33.1% | 25.6% | 58.1% | |
| HKT Trust & HKT Ltd ($6823) | 35.0% | 35.9% | 34.9% | 37.2% | |
| HKBN Ltd ($1310) | 39.2% | 40.1% | 39.0% | 35.2% | |
| PCCW Ltd ($8) | 31.9% | 39.2% | 30.6% | 31.9% | |
| |
|---|
| Median (28 companies) | 5.5% | 5.4% | 8.3% | 8.1% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Hanny Holdings Ltd ($275) | 11.6% | 28.3% | 0.2% | 643.1% | |
| Vision Values Holdings Ltd ($862) | 1.2% | 8.4% | 3.0% | 72.5% | |
| Netel Technology Holdings Ltd ($8256) | 15.4% | 16.6% | 9.0% | 25.0% | |
| Great World Co Holdings Ltd ($8003) | 108.7% | 7.8% | 0.4% | 14.6% | |
| Synertone Communication Corp ($1613) | 38.4% | 15.8% | 2.1% | 14.3% | |
| |
|---|
| Median (18 companies) | 2.9% | 2.9% | 2.6% | 6.1% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| VTech Holdings Ltd ($303) | 39.5% | 40.0% | 39.8% | 37.9% | |
| Telecom Service One Holdings Ltd ($8145) | 5.4% | 26.7% | 39.8% | 37.4% | |
| Champion Technology Holdings Ltd ($92) | 3.0% | 5.2% | 0.9% | 17.4% | |
| Telecom Digital Holdings Ltd ($8336) | 13.3% | 20.2% | 18.9% | 16.7% | |
| Cisco Systems Inc ($4333) | 15.8% | 12.1% | 13.4% | 14.7% | |
| |
|---|
| Median (38 companies) | 6.0% | 5.8% | 5.4% | 6.0% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Z-Obee Holdings Ltd ($948) | 5.9x | | | 70.9x | |
| HKBN Ltd ($1310) | 3.8x | 3.0x | 3.0x | 3.5x | |
| PCCW Ltd ($8) | 2.7x | 2.6x | 2.9x | 3.3x | |
| CITIC Telecom International Holdings Ltd ($1883) | 3.5x | 3.4x | 3.2x | 3.2x | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | -1.2x | -1.0x | 3.2x | 2.9x | |
| |
|---|
| Median (18 companies) | 0.6x | 0.6x | 0.6x | 1.6x | |
|---|
