PCCW Valuation

Is 8 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 8 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 8 (HK$4.35) is trading below our estimate of fair value (HK$34.48)

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


Key Valuation Metric

Which metric is best to use when looking at relative valuation for 8?

Key metric: As 8 is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for 8. This is calculated by dividing 8's market cap by their current revenue.
What is 8's PS Ratio?
PS Ratio0.9x
SalesHK$37.20b
Market CapHK$33.80b

Price to Sales Ratio vs Peers

How does 8's PS Ratio compare to its peers?

The above table shows the PS ratio for 8 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average1.3x
6823 HKT Trust and HKT
2.1x1.9%HK$73.0b
788 China Tower
1.8x4.1%HK$180.1b
1310 HKBN
0.6x2.5%HK$6.8b
762 China Unicom (Hong Kong)
0.5x2.6%HK$201.9b
8 PCCW
0.9x2.6%HK$33.8b

Price-To-Sales vs Peers: 8 is good value based on its Price-To-Sales Ratio (0.9x) compared to the peer average (1.3x).


Price to Sales Ratio vs Industry

How does 8's PS Ratio compare vs other companies in the Asian Telecom Industry?

16 CompaniesPrice / SalesEstimated GrowthMarket Cap
8 0.9xIndustry Avg. 1.9xNo. of Companies19PS01.63.24.86.48+
16 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: 8 is good value based on its Price-To-Sales Ratio (0.9x) compared to the Asian Telecom industry average (1.9x).


Price to Sales Ratio vs Fair Ratio

What is 8's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

8 PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.9x
Fair PS Ratio1x

Price-To-Sales vs Fair Ratio: 8 is good value based on its Price-To-Sales Ratio (0.9x) compared to the estimated Fair Price-To-Sales Ratio (1x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 8 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentHK$4.35
HK$4.30
-1.1%
11.6%HK$5.00HK$3.90n/a3
Nov ’25HK$4.30
HK$4.30
0%
11.6%HK$5.00HK$3.90n/a3
Oct ’25HK$4.27
HK$4.30
+0.7%
11.6%HK$5.00HK$3.90n/a3
Sep ’25HK$4.41
HK$4.03
-8.5%
11.1%HK$4.60HK$3.50n/a3
Aug ’25HK$4.12
HK$4.03
-2.1%
11.1%HK$4.60HK$3.50n/a3
Jul ’25HK$3.91
HK$3.97
+1.4%
9.3%HK$4.40HK$3.50n/a3
Jun ’25HK$4.18
HK$4.03
-3.7%
6.2%HK$4.40HK$3.70n/a4
May ’25HK$3.92
HK$4.03
+2.7%
6.2%HK$4.40HK$3.70n/a4
Apr ’25HK$3.87
HK$4.03
+4.0%
6.2%HK$4.40HK$3.70n/a4
Mar ’25HK$3.89
HK$4.20
+8.0%
4.8%HK$4.40HK$4.00n/a4
Feb ’25HK$4.05
HK$4.16
+2.6%
3.7%HK$4.32HK$4.00n/a4
Jan ’25HK$4.16
HK$4.16
-0.1%
3.7%HK$4.32HK$4.00n/a4
Dec ’24HK$4.00
HK$4.16
+3.9%
3.7%HK$4.32HK$4.00HK$4.244
Nov ’24HK$3.86
HK$4.16
+7.6%
3.7%HK$4.32HK$4.00HK$4.304
Oct ’24HK$3.57
HK$4.16
+16.4%
3.7%HK$4.32HK$4.00HK$4.274
Sep ’24HK$3.73
HK$4.44
+19.0%
6.1%HK$4.80HK$4.00HK$4.415
Aug ’24HK$3.99
HK$4.56
+14.3%
3.6%HK$4.80HK$4.30HK$4.125
Jul ’24HK$4.06
HK$4.56
+12.3%
3.6%HK$4.80HK$4.30HK$3.915
Jun ’24HK$3.97
HK$4.54
+14.4%
3.6%HK$4.80HK$4.30HK$4.185
May ’24HK$4.09
HK$4.54
+11.0%
3.6%HK$4.80HK$4.30HK$3.925
Apr ’24HK$3.92
HK$4.54
+15.8%
3.6%HK$4.80HK$4.30HK$3.875
Mar ’24HK$3.95
HK$4.58
+15.9%
7.4%HK$5.00HK$4.00HK$3.895
Feb ’24HK$3.92
HK$4.58
+16.8%
7.4%HK$5.00HK$4.00HK$4.055
Jan ’24HK$3.52
HK$4.74
+34.7%
9.2%HK$5.30HK$4.00HK$4.165
Dec ’23HK$3.41
HK$4.74
+39.0%
9.2%HK$5.30HK$4.00HK$4.005

Analyst Forecast: Target price is lower than the current share price.


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