PCCW Limited (0008) AI Stock Analysis

• Market Cap: HK$42.86B
• Dividend Yield: 1.67%
• Average Volume (3M): 8.00M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.20
• Revenue Growth: 4.26%
• EPS Growth: 36.68%
• Country: HK
• Employees: 14,600
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -0.06
• Shares Outstanding: 7,741,063,500
• 10 Day Avg. Volume: 9,933,556
• 30 Day Avg. Volume: 8,002,360
• PEG Ratio: 14.55
• Price to Book (P/B): 4.67
• Price to Sales (P/S): 0.93
• P/FCF Ratio: 11.36
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: HK$6.00 ▲(2.39% Upside)

PCCW Limited's overall stock score is primarily influenced by its stable revenue growth and strong cash flow generation, despite profitability challenges and high debt levels. The technical analysis suggests the stock may be overbought, posing a risk of a price correction. Valuation metrics are unattractive, with a negative P/E ratio and low dividend yield, further weighing down the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a stable demand for PCCW's services, reflecting its strong market position in telecommunications and media.

Cash Flow Generation

Strong cash flow generation despite profitability challenges underscores PCCW's operational efficiency and ability to sustain business operations.

Leverage Management

Improved leverage management reduces financial risk, enhancing PCCW's financial stability and flexibility for future investments.

Negative Factors

Profitability Challenges

Ongoing net losses and negative profit margins highlight challenges in achieving profitability, potentially impacting long-term financial health.

Decline in Free Cash Flow

A substantial drop in free cash flow may limit PCCW's ability to invest in growth opportunities and manage debt obligations effectively.

High Debt Levels

Persistently high debt levels can strain PCCW's financial resources, posing risks to long-term sustainability and growth potential.

PCCW Limited Business Overview & Revenue Model

Company Description

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland and other parts of China, Singapore, and internationally. The company's services include local telephony, local data and broadband, mobile, 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, and media content 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 and services; supply of broadband internet access solutions and web services; provision of data services; software development, systems integration, consulting, and informatization activities; computer facilities management; the provision of computer and IP/IT related value-added services to business customers; and operates customer loyalty program and online merchandise sales. Additionally, the company offers IT and business process outsourcing, fintech, e-Commerce, big data analytics, managed, digital, cloud, and IoT solutions. PCCW Limited was founded in 1925 and is headquartered in Quarry Bay, Hong Kong.

How the Company Makes Money

PCCW Limited generates revenue through multiple streams, primarily from its telecommunications services, which include mobile and fixed-line voice services, broadband internet, and pay television subscriptions. The company also earns money from its IT services and solutions division, which provides consulting, system integration, and managed services to businesses. Additionally, PCCW has significant revenue from its media and content services, including its OTT (over-the-top) streaming platform, Viu. Partnerships with local and international telecom operators, as well as collaborations with content providers, further enhance its revenue potential. The growing demand for digital services and solutions continues to drive PCCW's earnings, particularly in the realm of cloud computing and digital content delivery.

PCCW Limited Financial Statement Overview

Summary

PCCW Limited shows stable revenue growth but struggles with profitability, reflected in negative net income. Improved leverage is noted, but high debt levels remain a concern. Strong cash flow generation is a positive, although the decline in free cash flow is a negative signal.

Income Statement

PCCW Limited has shown a slight increase in total revenue from 2023 to 2024, with a revenue growth rate of 3.33%. However, the company has posted a net loss in both 2023 and 2024, resulting in negative net profit margins, with 2024 having a net profit margin of -0.18%. The gross profit margin remained stable at approximately 49.06% in 2024. The company's EBIT margin has decreased to 0% in 2024 from 14.42% in 2023, indicating a significant drop in operating profitability. The EBITDA margin also declined from 36.36% in 2023 to 29.88% in 2024.

Balance Sheet

The company's debt-to-equity ratio has improved from 21.82 in 2023 to 7.20 in 2024, reflecting better leverage management. However, the return on equity (ROE) is negative due to the net loss, with the equity ratio increasing to 7.58%. The high level of total debt remains a concern, although the increase in stockholders' equity from 2023 to 2024 mitigates some risks.

Cash Flow

PCCW's operating cash flow decreased from 2023 to 2024, but it remains positive, which is a strength. The free cash flow, however, saw a significant decline of 42.2% from 2023 to 2024. The company has a high operating cash flow to net income ratio, given the negative net income, highlighting effective cash generation. The free cash flow to net income ratio is also positive, indicating PCCW's ability to generate cash despite profitability challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.78B	37.56B	36.35B	36.06B	35.45B	35.98B
Gross Profit	14.82B	18.43B	18.23B	18.15B	17.73B	16.80B
EBITDA	12.05B	11.22B	13.21B	12.38B	11.86B	11.11B
Net Income	-168.00M	-66.00M	-471.00M	393.00M	1.26B	-1.02B
Balance Sheet
Total Assets	101.17B	98.76B	94.56B	95.06B	94.22B	97.84B
Cash, Cash Equivalents and Short-Term Investments	3.14B	2.58B	2.71B	3.13B	5.04B	4.62B
Total Debt	59.25B	53.94B	54.19B	51.65B	49.22B	60.56B
Total Liabilities	93.77B	87.24B	84.86B	82.30B	78.74B	84.28B
Stockholders Equity	4.23B	7.49B	2.48B	11.44B	14.36B	9.93B
Cash Flow
Free Cash Flow	6.51B	3.08B	5.32B	3.43B	1.78B	5.57B
Operating Cash Flow	8.68B	10.63B	13.35B	10.34B	9.70B	12.70B
Investing Cash Flow	-2.33B	-7.70B	-7.46B	-6.01B	-7.62B	-7.54B
Financing Cash Flow	-6.50B	-3.26B	-6.27B	-5.83B	-1.57B	-6.47B

PCCW Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0008, the sentiment is Neutral. The current price of 5.86 is below the 20-day moving average (MA) of 5.98, above the 50-day MA of 5.72, and above the 200-day MA of 5.19, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 46.64 is Neutral, neither overbought nor oversold. The STOCH value of 22.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0008.

PCCW Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0315	81 Outperform	$5.27B	11.02	9.18%	6.74%	0.52%	2.07%
0728	76 Outperform	€649.91B	13.81	7.66%	5.31%	0.53%	5.28%
1883	73 Outperform	HK$9.47B	10.34	8.67%	7.32%	-0.62%	-5.10%
6823	72 Outperform	$87.02B	16.89	14.75%	2.85%	2.33%	2.41%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
1310	57 Neutral	$11.00B	49.67	8.55%	4.90%	4.48%	1820.51%
0008	49 Neutral	HK$42.86B	-151.37	―	1.67%	4.26%	36.68%

PCCW Limited Corporate Events

PCCW Limited Issues New Shares for Employee Awards

PCCW Limited has announced the issuance of 287,792 new shares under its General Mandate to satisfy the vesting of awards granted to selected employees under the PCCW Subscription Scheme. This issuance represents a minimal percentage of the total shares in issue and is intended to reward employees without requiring shareholder approval. The shares will be held in trust and transferred to employees at no cost upon meeting certain conditions, with the company funding the entire subscription cost.

PCCW Limited Strengthens Audit Committee Framework

PCCW Limited’s Board of Directors has revised and approved the terms of reference for its Audit Committee, emphasizing the enhancement of financial reporting objectivity, risk management, and corporate governance. The Committee, composed of non-executive directors, is tasked with maintaining a strong relationship with external auditors and ensuring compliance with relevant laws, which is expected to bolster the company’s operational integrity and stakeholder confidence.

PCCW Limited Enhances Nomination Committee’s Role in Governance

PCCW Limited has revised the terms of reference for its Nomination Committee, which plays a crucial role in ensuring a fair and transparent process for appointing and re-appointing directors. The committee is tasked with maintaining a diverse and skilled board that aligns with the company’s strategic needs. This revision aims to enhance the committee’s effectiveness in identifying qualified candidates, assessing director independence, and promoting board diversity, thereby strengthening PCCW’s governance framework.