SEHK:8

Stock Analysis Report

Executive Summary

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland China, Macau, Taiwan, China, and internationally.

Snowflake

Fundamentals

Second-rate dividend payer 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


Market Performance


7 Day Return

0.9%

8

-2.0%

HK Telecom

0.8%

HK Market


1 Year Return

-0.2%

8

8.6%

HK Telecom

0.5%

HK Market

Return vs Industry: 8 underperformed the Hong Kong Telecom industry which returned 8.6% over the past year.

Return vs Market: 8 matched the Hong Kong Market which returned 0.5% over the past year.


Shareholder returns

8IndustryMarket
7 Day0.9%-2.0%0.8%
30 Day3.9%-3.0%-0.5%
90 Day-1.7%-7.5%-5.6%
1 Year6.9%-0.2%11.1%8.6%4.1%0.5%
3 Year17.2%-3.6%-3.9%-10.4%15.5%3.9%
5 Year24.3%-6.8%-13.9%-23.4%19.9%-0.2%

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

Undervalued: 8 (HK$4.53) is trading below our estimate of fair value (HK$49.42)

Significantly Undervalued: 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 (39.9x) compared to the Telecom industry average (12.3x).

PE vs Market: 8 is poor value based on its PE Ratio (39.9x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: 8 is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: 8 is overvalued based on its PB Ratio (2.2x) compared to the HK Telecom industry average (1.1x).


Next Steps

Future Growth

How is PCCW forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

14.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 8's forecast earnings growth (14.7% per year) is above the savings rate (2%).

Earnings vs Market: 8's earnings (14.7% per year) are forecast to grow faster than the Hong Kong market (11.4% 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 (10.2% 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

High Future ROE: 8's Return on Equity is forecast to be low in 3 years time (8.5%).


Next Steps

Past Performance

How has PCCW performed over the past 5 years?

-27.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 8's earnings have declined by -27.7% 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 (-12.5%) over the past year, making it difficult to compare to the Telecom industry average (3.8%).


Return on Equity

High ROE: 8's Return on Equity (17.3%) is considered low.


Return on Assets

ROA vs Industry: 8's Return on Assets is below or equal to the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: 8's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is PCCW's financial position?


Financial Position Analysis

Short Term Liabilities: 8's short term assets (HK$18.2B) exceeds its short term liabilities (HK$15.7B)

Long Term Liabilities: 8's short term assets (18.2B) do not cover its long term liabilities (59.3B)


Debt to Equity History and Analysis

Debt Level: 8's debt to equity ratio (283.4%) is considered high

Reducing Debt: 8's debt to equity ratio has reduced from 543.9% to 283.4% over the past 5 years.

Debt Coverage: 8's debt is not well covered by operating cash flow (17%).

Interest Coverage: 8's interest payments on its debt are not well covered by EBIT (3x coverage).


Balance Sheet

Inventory Level: 8 has a high level of physical assets or inventory.

Debt Coverage by Assets: 8's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

6.70%

Current Dividend Yield


Dividend Yield vs Market

company6.7%marketbottom25%2.3%markettop25%6.3%industryaverage2.0%forecastin3Years7.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 8's dividend (6.7%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 8's dividend (6.7%) is in the top 25% of dividend payers in the Hong Kong market (6.25%)

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 (277.8%), 8's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 8's dividends in 3 years are not forecast to be well covered by earnings (188.4% payout ratio).


Next Steps

Management

What is the CEO of PCCW's salary, the management and board of directors tenure and is there insider trading?

8.8yrs

Average management tenure


CEO

BG Srinivas Gangaiah (58yo)

5.3yrs

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 ($USD3.58M) is about average for companies of similar size in the Hong Kong market ($USD502.83K).

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.


Management Age and Tenure

8.8yrs

Average Tenure

60yo

Average Age

Experienced Management: 8's management team is seasoned and experienced (8.8 years average tenure).


Board Age and Tenure

8.7yrs

Average Tenure

57yo

Average Age

Experienced Board: 8's board of directors are considered experienced (8.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellHK$3,769,76315 Apr 19
Srinivas Gangaiah
EntityIndividual
Role
Chief Executive Officer
Group MD & Executive Director
Shares800,000
Max PriceHK$4.71
SellHK$6,743,71715 Apr 19
Srinivas Gangaiah
EntityIndividual
Role
Chief Executive Officer
Group MD & Executive Director
Shares1,422,004
Max PriceHK$4.74

Ownership Breakdown


Management Team

  • Richard Li (52yo)

    Chairman

    • Tenure: 20.2yrs
    • Compensation: HK$40.00k
  • Robert Lee (67yo)

    Executive Director

    • Tenure: 17.1yrs
  • Paul Berriman (62yo)

    Chief Technology Officer of Technology Strategy & Development

    • Tenure: 12.4yrs
  • Susanna Hui (54yo)

    Group CFO & Executive Director

    • Tenure: 9.4yrs
    • Compensation: HK$29.93m
  • Stephen Loh (63yo)

    Executive Vice President of now Business News Channel & now NEWS Channel

    • Tenure: 14.3yrs
  • BG Srinivas Gangaiah (58yo)

    Group MD & Executive Director

    • Tenure: 5.3yrs
    • Compensation: HK$28.08m
  • Chi-Keung Chan

    Head of Group Communications

    • Tenure: 0yrs
  • Bernadette Mak Lomas

    Group General Counsel & Company Secretary

    • Tenure: 3.2yrs
  • Marco Wong

    Head of M&A

    • Tenure: 0yrs
  • Hester Shum

    Group Chief Human Resources Officer

    • Tenure: 0.3yrs

Board Members

  • Richard Li (52yo)

    Chairman

    • Tenure: 20.2yrs
    • Compensation: HK$40.00k
  • Edmund Tse (81yo)

    Non-Executive Director

    • Tenure: 10.1yrs
    • Compensation: HK$240.00k
  • Robert Lee (67yo)

    Executive Director

    • Tenure: 17.1yrs
  • Aman Mehta (73yo)

    Independent Non-Executive Director

    • Tenure: 15.7yrs
    • Compensation: HK$1.48m
  • Fushen Li (57yo)

    Deputy Chairman

    • Tenure: 1.1yrs
    • Compensation: HK$470.00k
  • Susanna Hui (54yo)

    Group CFO & Executive Director

    • Tenure: 9.4yrs
    • Compensation: HK$29.93m
  • David Wei (49yo)

    Non-Executive Director

    • Tenure: 7.9yrs
    • Compensation: HK$240.00k
  • BG Srinivas Gangaiah (58yo)

    Group MD & Executive Director

    • Tenure: 5.3yrs
    • Compensation: HK$28.08m
  • Bryce Wayne Lee (54yo)

    Independent Non-Executive Director

    • Tenure: 7.4yrs
    • Compensation: HK$770.00k
  • Frances Waikwun Wong (57yo)

    Independent Non Executive Director

    • Tenure: 7.6yrs
    • Compensation: HK$590.00k

Company Information

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


Key Information

  • Name: PCCW Limited
  • Ticker: 8
  • Exchange: SEHK
  • Founded: 1979
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: HK$34.956b
  • Shares outstanding: 7.72b
  • 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 China, Macau, Taiwan, China, and internationally. The company’s services include local telephony, local data and broadba ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 12:34
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.