Chunghwa Telecom Co Ltd

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CHT : NYSE : Technology
$35.12 -0.17 | -0.48%
Today's Range: 35.03 - 35.31
Avg. Daily Volume: 218,900
09/27/16 - 3:59 PM ET

Financial Analysis


CHUNGHWA TELECOM LTD's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. CHUNGHWA TELECOM LTD has weak liquidity. Currently, the Quick Ratio is 0.87 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 3.95% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)1741.921864.36
EBITDA ($mil)651.43707.62
EBIT ($mil)399.42432.26
Net Income ($mil)342.86364.44


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1624.791685.2
Total Assets ($mil)14404.4714964.87
Total Debt ($mil)51.5286.14
Equity ($mil)10822.0611267.54


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin51.5851.86
EBITDA Margin37.3937.95
Operating Margin22.9323.19
Sales Turnover0.480.48
Return on Assets9.118.17
Return on Equity12.1310.85
Debt Q2 FY16 Q2 FY15
Current Ratio1.041.05
Debt/Capital0.00.01
Interest Expense0.140.22
Interest Coverage2894.341929.72


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)775.75775.75
Div / share0.00.0
EPS0.440.47
Book value / share13.9514.52
Institutional Own % n/a n/a
Avg Daily Volume220682.0247025.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 17.75 for the Diversified Telecommunication Services industry and a discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 2.54 indicates valuation on par with the S&P 500 average of 2.82 and a significant discount versus the industry average of 4.07. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, CHUNGHWA TELECOM LTD seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CHT 20.97 Peers 17.75   CHT 13.91 Peers 6.66

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

CHT is trading at a premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CHT is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CHT 19.69 Peers 18.54   CHT 5.04 Peers 1.07

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

CHT is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CHT trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CHT 2.54 Peers 4.07   CHT 6.96 Peers 53.15

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CHT is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CHT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CHT 3.98 Peers 1.73   CHT -3.15 Peers 8.37

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CHT is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CHT significantly trails its peers on the basis of sales growth

 

 

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