China Unicom (Hong Kong) (SEHK:762) - Share price, News & Analysis

Q: What is the Fair Price of 762 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

762 (HK$3.68) is trading below our estimate of [[fair value]] (HK$16.97)

762 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	1/6
Past Performance	3/6
Financial Health	5/6
Dividends	4/6

762 Stock Overview

China Unicom (Hong Kong) Limited, an investment holding company, provides cellular and fixed-line voice, and related value-added services in the People’s Republic of China.

Rewards

Trading at 78.3% below our estimate of its fair value

Earnings are forecast to grow 15.73% per year

Earnings have grown 30.6% per year over the past 5 years

Risk Analysis

Unstable dividend track record

China Unicom (Hong Kong) Competitors

China Tower

SEHK:788

HK$170.7b

HKT Trust and HKT

SEHK:6823

HK$80.8b

China Telecom

SEHK:728

HK$377.3b

PCCW

SEHK:8

HK$32.1b

Price History & Performance

Summary of all time highs, changes and price drops for China Unicom (Hong Kong)
Historical stock prices
Current Share Price	HK$3.68
52 Week High	HK$4.73
52 Week Low	HK$3.60
Beta	0.91
1 Month Change	-1.08%
3 Month Change	-5.64%
1 Year Change	-13.41%
3 Year Change	-57.46%
5 Year Change	-67.32%
Change since IPO	-78.10%

Shareholder Returns

	762	HK Telecom	HK Market
7D	0%	-0.1%	1.7%
1Y	-13.4%	-7.4%	-21.2%

Return vs Industry: 762 underperformed the Hong Kong Telecom industry which returned -7.4% over the past year.

Return vs Market: 762 exceeded the Hong Kong Market which returned -21.2% over the past year.

Price Volatility

Is 762's price volatile compared to industry and market?
762 volatility
762 Average Weekly Movement	1.7%
Telecom Industry Average Movement	3.3%
Market Average Movement	6.9%
10% most volatile stocks in HK Market	13.8%
10% least volatile stocks in HK Market	3.4%

Stable Share Price: 762 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 762's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	243,381	Liehong Liu	https://www.chinaunicom.com.hk

China Unicom (Hong Kong) Limited, an investment holding company, provides cellular and fixed-line voice, and related value-added services in the People’s Republic of China. It also provides broadband and other Internet-related, information communications technology, and business and data communications services. In addition, the company offers communications technology training, technical, and Internet information and value-added telecommunications services; telecommunications network construction, maintenance, and technical services; and consultancy, survey, design, and contract services relating to information and construction projects.

China Unicom (Hong Kong) Fundamentals Summary

How do China Unicom (Hong Kong)'s earnings and revenue compare to its market cap?
762 fundamental statistics
Market Cap	CN¥95.52b
Earnings (TTM)	CN¥15.16b
Revenue (TTM)	CN¥334.60b

6.3x

P/E Ratio

0.3x

P/S Ratio

Is 762 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
762 income statement (TTM)
Revenue	CN¥334.60b
Cost of Revenue	CN¥150.60b
Gross Profit	CN¥184.00b
Other Expenses	CN¥168.84b
Earnings	CN¥15.16b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.50
Gross Margin	54.99%
Net Profit Margin	4.53%
Debt/Equity Ratio	10.7%

How did 762 perform over the long term?

See historical performance and comparison

Dividends

6.1%

Current Dividend Yield

44%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 762 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 762?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 762. This is calculated by dividing 762's market cap by their current preferred multiple.
What is 762's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥95.52b

762 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	0.7x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does 762's PE Ratio compare to its peers?

762 PE Ratio vs Peers

The above table shows the PE ratio for 762 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.4x
788 China Tower	18.8x	18.1%	HK$170.7b
6823 HKT Trust and HKT	16.6x	3.3%	HK$80.8b
728 China Telecom	7.8x	14.7%	HK$377.3b
8 PCCW	34.2x	14.3%	HK$32.1b
762 China Unicom (Hong Kong)	6.3x	15.7%	HK$112.0b

Forward PE

Price-To-Earnings vs Peers: 762 is good value based on its Price-To-Earnings Ratio (6.3x) compared to the peer average (19.4x).

Price to Earnings Ratio vs Industry

How does 762's PE Ratio compare vs other companies in the Asian Telecom Industry?

Price-To-Earnings vs Industry: 762 is good value based on its Price-To-Earnings Ratio (6.3x) compared to the Hong Kong Telecom industry average (12.9x)

Price to Earnings Ratio vs Fair Ratio

What is 762's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

762 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.3x
Fair PE Ratio	14.4x

Price-To-Earnings vs Fair Ratio: 762 is good value based on its Price-To-Earnings Ratio (6.3x) compared to the estimated Fair Price-To-Earnings Ratio (14.4x).

Share Price vs Fair Value

What is the Fair Price of 762 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 762 (HK$3.68) is trading below our estimate of fair value (HK$16.97)

Significantly Below Fair Value: 762 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 762 is good value based on its PEG Ratio (0.4x)

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Future Growth

How is China Unicom (Hong Kong) forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 762's forecast earnings growth (15.7% per year) is above the savings rate (1.5%).

Earnings vs Market: 762's earnings (15.7% per year) are forecast to grow slower than the Hong Kong market (17.1% per year).

High Growth Earnings: 762's earnings are forecast to grow, but not significantly.

Revenue vs Market: 762's revenue (5.1% per year) is forecast to grow slower than the Hong Kong market (10.3% per year).

High Growth Revenue: 762's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 762's Return on Equity is forecast to be low in 3 years time (6%).

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Past Performance

How has China Unicom (Hong Kong) performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

30.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 762 has high quality earnings.

Growing Profit Margin: 762's current net profit margins (4.5%) are higher than last year (4.2%).

Past Earnings Growth Analysis

Earnings Trend: 762's earnings have grown significantly by 30.6% per year over the past 5 years.

Accelerating Growth: 762's earnings growth over the past year (15.1%) is below its 5-year average (30.6% per year).

Earnings vs Industry: 762 earnings growth over the past year (15.1%) underperformed the Telecom industry 15.1%.

Return on Equity

High ROE: 762's Return on Equity (4.6%) is considered low.

Discover strong past performing companies

Financial Health

How is China Unicom (Hong Kong)'s financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 762's short term assets (CN¥126.2B) do not cover its short term liabilities (CN¥236.2B).

Long Term Liabilities: 762's short term assets (CN¥126.2B) exceed its long term liabilities (CN¥21.5B).

Debt to Equity History and Analysis

Debt Level: 762 has more cash than its total debt.

Reducing Debt: 762's debt to equity ratio has reduced from 77.7% to 10.7% over the past 5 years.

Debt Coverage: 762's debt is well covered by operating cash flow (308.9%).

Interest Coverage: 762 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is China Unicom (Hong Kong) current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.12%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 762's dividend (6.12%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.7%).

High Dividend: 762's dividend (6.12%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.78%).

Stability and Growth of Payments

Stable Dividend: 762's dividend payments have been volatile in the past 10 years.

Growing Dividend: 762's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (43.6%), 762's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (15.2%), 762's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure

CEO

Liehong Liu (52 yo)

0.75

Tenure

CN¥197,000

Compensation

Mr. Liehong Liu is Chairman and Chief Executive Officer of China Unicom (Hong Kong) Limited since September 03, 2021. He served as Head of the Electronics Second Research Institute under the Ministry of In...

CEO Compensation Analysis

Compensation vs Market: Liehong's total compensation ($USD29.44K) is below average for companies of similar size in the Hong Kong market ($USD1.06M).

Compensation vs Earnings: Insufficient data to compare Liehong's compensation with company performance.

Leadership Team

Experienced Management: 762's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.

Board Members

Experienced Board: 762's board of directors are considered experienced (5.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31