SEHK:8

Stock Analysis Report

Executive Summary

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland and other parts of China, Japan, and internationally.


Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has PCCW's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

7.3%

8

9.0%

HK Telecom

2.7%

HK Market


1 Year Return

-3.8%

8

-31.5%

HK Telecom

-19.8%

HK Market

Return vs Industry: 8 exceeded the Hong Kong Telecom industry which returned -31.5% over the past year.

Return vs Market: 8 exceeded the Hong Kong Market which returned -19.8% over the past year.


Shareholder returns

8IndustryMarket
7 Day7.3%9.0%2.7%
30 Day-2.6%-8.7%-7.2%
90 Day-4.0%-8.1%-12.1%
1 Year3.1%-3.8%-30.1%-31.5%-16.9%-19.8%
3 Year14.1%-2.2%-31.8%-36.1%0.9%-9.3%
5 Year19.9%-10.1%-47.0%-52.6%-12.6%-26.7%

Price Volatility Vs. Market

How volatile is PCCW's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is PCCW undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 8 (HK$4.53) is trading below our estimate of fair value (HK$37.28)

Significantly Below Fair Value: 8 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 8 is poor value based on its PE Ratio (51.3x) compared to the Telecom industry average (13.2x).

PE vs Market: 8 is poor value based on its PE Ratio (51.3x) compared to the Hong Kong market (9.5x).


Price to Earnings Growth Ratio

PEG Ratio: 8 is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: 8 is overvalued based on its PB Ratio (2.2x) compared to the HK Telecom industry average (1.3x).


Next Steps

Future Growth

How is PCCW forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

16.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 8's forecast earnings growth (16.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 8's earnings (16.2% per year) are forecast to grow faster than the Hong Kong market (11.8% per year).

High Growth Earnings: 8's earnings are forecast to grow, but not significantly.

Revenue vs Market: 8's revenue (1.8% per year) is forecast to grow slower than the Hong Kong market (9.8% per year).

High Growth Revenue: 8's revenue (1.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 8's Return on Equity is forecast to be low in 3 years time (9.8%).


Next Steps

Past Performance

How has PCCW performed over the past 5 years?

-33.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 8 has high quality earnings.

Growing Profit Margin: 8's current net profit margins (1.8%) are lower than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: 8's earnings have declined by -33.1% per year over the past 5 years.

Accelerating Growth: 8's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 8 had negative earnings growth (-24.1%) over the past year, making it difficult to compare to the Telecom industry average (-3.3%).


Return on Equity

High ROE: 8's Return on Equity (16%) is considered low.


Next Steps

Financial Health

How is PCCW's financial position?


Financial Position Analysis

Short Term Liabilities: 8's short term assets (HK$20.9B) exceed its short term liabilities (HK$16.3B).

Long Term Liabilities: 8's short term assets (HK$20.9B) do not cover its long term liabilities (HK$64.6B).


Debt to Equity History and Analysis

Debt Level: 8's debt to equity ratio (306.5%) is considered high.

Reducing Debt: 8's debt to equity ratio has reduced from 335.8% to 306.5% over the past 5 years.

Debt Coverage: 8's debt is well covered by operating cash flow (20.2%).

Interest Coverage: 8's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Next Steps

Dividend

What is PCCW's current dividend yield, its reliability and sustainability?

7.10%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 8's dividend (7.1%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.66%).

High Dividend: 8's dividend (7.1%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.15%).


Stability and Growth of Payments

Stable Dividend: 8's dividend payments have been volatile in the past 10 years.

Growing Dividend: 8's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (364.5%), 8'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

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

9.3yrs

Average management tenure


CEO

BG Srinivas Gangaiah (58yo)

5.75s

Tenure

HK$28,080,000

Compensation

Mr. Srinivas Bangalore Gangaiah, BG Srinivas, has been Group Managing Director and Executive Director of PCCW Limited since July 14, 2014. Prior to joining PCCW, Mr. Gangaiah has worked for the last 15 yea ...


CEO Compensation Analysis

Compensation vs Market: BG Srinivas's total compensation ($USD3.62M) is above average for companies of similar size in the Hong Kong market ($USD489.04K).

Compensation vs Earnings: BG Srinivas's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Tzar Kai Li
Chairman20.67yrsHK$40.00k3.98% HK$1.4b
Srinivas Gangaiah
Group MD & Executive Director5.75yrsHK$28.08m0.010% HK$3.6m
Hon Hing Hui
Group CFO & Executive Director9.92yrsHK$29.93m0.082% HK$28.6m
Paul Berriman
Chief Technology Officer of Technology Strategy & Development12.92yrsno datano data
Marco Wong
Head of M&Ano datano datano data
Bernadette Mak Lomas
Group General Counsel & Company Secretary3.67yrsno datano data
Chi-Keung Chan
Head of Group Communicationsno datano datano data
Hester Shum
Group Chief Human Resources Officer0.75yrno datano data
Chi Hong Lee
Executive Director17.58yrsno data0.013% HK$4.5m
Chan Loh
Executive Vice President of now Business News Channel & now NEWS Channel14.75yrsno datano data

9.3yrs

Average Tenure

60yo

Average Age

Experienced Management: 8's management team is seasoned and experienced (9.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Tzar Kai Li
Chairman20.67yrsHK$40.00k3.98% HK$1.4b
Srinivas Gangaiah
Group MD & Executive Director5.75yrsHK$28.08m0.010% HK$3.6m
Hon Hing Hui
Group CFO & Executive Director9.92yrsHK$29.93m0.082% HK$28.6m
Chi Hong Lee
Executive Director17.58yrsno data0.013% HK$4.5m
Sze-Wing Tse
Non-Executive Director10.58yrsHK$240.00k0.0048% HK$1.7m
Aman Mehta
Independent Non-Executive Director16.17yrsHK$1.48mno data
Fushen Li
Deputy Chairman1.58yrsHK$470.00kno data
Zhe Wei
Non-Executive Director8.42yrsHK$240.00kno data
Bryce Wayne Lee
Independent Non-Executive Director7.92yrsHK$770.00kno data
Waikwun Wong
Independent Non Executive Director8.08yrsHK$590.00kno data

9.2yrs

Average Tenure

57yo

Average Age

Experienced Board: 8's board of directors are considered experienced (9.2 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

PCCW Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: PCCW Limited
  • Ticker: 8
  • Exchange: SEHK
  • Founded: 1925
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: HK$34.846b
  • Shares outstanding: 7.73b
  • Website: https://www.pccw.com

Number of Employees


Location

  • PCCW Limited
  • PCCW Tower
  • 41st Floor
  • Quarry Bay
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PCWL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1995
8SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1995
TH3BDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1995
8SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1995
8SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1995
PCCW.YOTCPK (Pink Sheets LLC)SPONS ADR NEWUSUSDAug 2000

Biography

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland and other parts of China, Japan, and internationally. The company’s services include local telephony, local data and broadband, mobile and international telecommunications, and satellite-based and network-based telecommunications services; and outsourcing, consulting, and contact center services. It also provides technical support, electronics and communications engineering, and products and solutions, as well as free television, pay television program, and interactive multimedia services; sells advertising in various telephone directories and on the Internet; publishes directories; and sells mobile handsets and accessories. In addition, the company offers broadcasting and related services, management and engineering support services, customer relationship management and customer contact management solutions, content for various media, and outsourced call center and data center services; and over-the-top video services under the Viu brand, as well as sells customer premises equipment and related solutions. Further, it engages in the sale, distribution, and marketing of telecommunication products; supply of broadband internet access solutions and web services; provision of data services; and software development, systems integration, consulting, and informatization activities; the provision of computer and IP/IT related value-added services to business customers; property investment, development, management, and leasing, as well as hotel management activities; and ski operations. Additionally, the company offers entertainment over-the-top platform; and digital, IT and business process outsourcing, cloud computing, hosting, managed, e-commerce, and IoT solutions. PCCW Limited was founded in 1925 and is headquartered in Quarry Bay, Hong Kong. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 12:52
End of Day Share Price2020/04/08 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.