SEHK:3997

Stock Analysis Report

Telecom Service One Holdings

Executive Summary

Telecom Service One Holdings Limited, an investment holding company, provides repair and refurbishment services for mobile phones and other personal electronic products in Hong Kong, the People’s Republic of China, and Macau.

Snowflake

Fundamentals

Flawless balance sheet and overvalued.

Share Price & News

How has Telecom Service One Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-7.7%

3997

1.3%

HK Commercial Services

0.3%

HK Market


1 Year Return

-63.9%

3997

33.5%

HK Commercial Services

1.3%

HK Market

Return vs Industry: 3997 underperformed the Hong Kong Commercial Services industry which returned 33.5% over the past year.

Return vs Market: 3997 underperformed the Hong Kong Market which returned 1.3% over the past year.


Shareholder returns

3997IndustryMarket
7 Day-7.7%1.3%0.3%
30 Day8.1%6.8%0.5%
90 Day-21.6%8.2%-4.6%
1 Year-62.5%-63.9%36.8%33.5%4.9%1.3%
3 Year-40.0%-45.0%-22.2%-28.1%15.3%3.7%
5 Year23.1%-6.3%-42.6%-48.8%20.0%-0.006%

Price Volatility Vs. Market

How volatile is Telecom Service One Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Telecom Service One Holdings undervalued compared to its fair value and its price relative to the market?

8.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 3997 (HK$1.2) is trading below our estimate of fair value (HK$1.32)

Significantly Below Fair Value: 3997 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 3997 is poor value based on its PE Ratio (16.4x) compared to the Commercial Services industry average (13.8x).

PE vs Market: 3997 is poor value based on its PE Ratio (16.4x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 3997's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 3997 is overvalued based on its PB Ratio (1.5x) compared to the HK Commercial Services industry average (1.1x).


Next Steps

Future Growth

How is Telecom Service One Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

0.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3997's forecast earnings growth (0.4% per year) is below the savings rate (2%).

Earnings vs Market: 3997's earnings (0.4% per year) are forecast to grow slower than the Hong Kong market (11.1% per year).

High Growth Earnings: 3997's earnings are forecast to grow, but not significantly.

Revenue vs Market: Insufficient data to determine if 3997's revenue is forecast to grow faster than the Hong Kong market.

High Growth Revenue: Insufficient data to determine if 3997's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 3997's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Telecom Service One Holdings performed over the past 5 years?

-2.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 3997's earnings have declined by -2.9% per year over the past 5 years.

Accelerating Growth: 3997's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3997 had negative earnings growth (-62.8%) over the past year, making it difficult to compare to the Commercial Services industry average (11.2%).


Return on Equity

High ROE: 3997's Return on Equity (9.3%) is considered low.


Return on Assets

ROA vs Industry: 3997 has a higher Return on Assets than the Commercial Services industry average last year.


Return on Capital Employed

ROCE Improving: 3997's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Telecom Service One Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 3997's short term assets (HK$105.2M) exceeds its short term liabilities (HK$5.4M)

Long Term Liabilities: 3997 has no long term liabilities


Debt to Equity History and Analysis

Debt Level: 3997 is debt free.

Reducing Debt: 3997 had no debt 5 years ago.

Debt Coverage: 3997 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 3997 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 3997 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 3997's debt is covered by short term assets.


Next Steps

Dividend

What is Telecom Service One Holdings's current dividend yield, its reliability and sustainability?

5.83%

Current Dividend Yield


Dividend Yield vs Market

company5.8%marketbottom25%2.3%markettop25%6.2%industryaverage1.8%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 3997's dividend (5.83%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 3997's dividend (5.83%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.18%).

Stable Dividend: 3997 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 3997 has only been paying a dividend for 5 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (95.5%), 3997's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Telecom Service One Holdings's salary, the management and board of directors tenure and is there insider trading?

6.8yrs

Average board tenure


CEO

Sunny Cheung (51yo)

5.2yrs

Tenure

HK$340,000

Compensation

Mr. King Fung Cheung, also known as Sunny, serves as the Chief Executive Officer of Telecom Digital Holdings Limited since September 8, 2015 and serves its Compliance Officer. Mr. Cheung joined Telecom Dig ...


CEO Compensation Analysis

Compensation vs. Market: Sunny's total compensation ($USD43.35K) is too low to compare against companies of similar size in the Hong Kong market ($USD215.97K).

Compensation vs Earnings: Sunny's compensation has been consistent with company performance over the past year.


Board Age and Tenure

6.8yrs

Average Tenure

60yo

Average Age

Experienced Board: 3997's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: 3997 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$125,00021 Oct 19
King Shan Cheung
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares100,000
Max PriceHK$1.25
BuyHK$106,00003 Sep 19
King Shan Cheung
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares100,000
Max PriceHK$1.06
BuyHK$12,60003 Sep 19
King Shan Cheung
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares12,000
Max PriceHK$1.05
BuyHK$55,22012 Jul 19
King Shek Cheung
EntityIndividual
Role
Chairman of the Board
Chairman
Shares40,000
Max PriceHK$1.38

Ownership Breakdown


Management Team

  • Sunny Cheung (51yo)

    CEO, Chief Compliance Officer & Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$340.00k
  • Wing Chong Yeung

    Company Secretary

    • Tenure: 3yrs

Board Members

  • Marisa Kwok (64yo)

    Independent Non-Executive Director

    • Tenure: 6.5yrs
    • Compensation: HK$120.00k
  • Ping Fong (68yo)

    Independent Non-Executive Director

    • Tenure: 6.5yrs
    • Compensation: HK$120.00k
  • King Shek Cheung (67yo)

    Chairman

    • Tenure: 0yrs
  • Sunny Cheung (51yo)

    CEO, Chief Compliance Officer & Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$340.00k
  • King Shan Cheung (60yo)

    Non-Executive Director

    • Tenure: 7.2yrs
  • Bobby Cheung (60yo)

    Non-Executive Director

    • Tenure: 7.2yrs
  • Tso Ka Yi (55yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: HK$120.00k

Company Information

Telecom Service One Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Telecom Service One Holdings Limited
  • Ticker: 3997
  • Exchange: SEHK
  • Founded: 1987
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: HK$160.428m
  • Shares outstanding: 128.34m
  • Website: https://www.tso.cc

Number of Employees


Location

  • Telecom Service One Holdings Limited
  • Riley House
  • Portion B of Unit 1806 and Unit 1807
  • Kwai Chung
  • New Territories
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3997SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMay 2013

Biography

Telecom Service One Holdings Limited, an investment holding company, provides repair and refurbishment services for mobile phones and other personal electronic products in Hong Kong, the People’s Republic  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:48
End of Day Share Price2019/10/23 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.