20140514-Maybank_KERPL-Growth_sustained_in_1Q14_11页_372kb

报告摘要

Globe Telecom (GLO PM) Summary

Core Content

Globe Telecom Inc (GLO) reported a 9% year-over-year (YoY) increase in 1Q14 core earnings to PHP3.36b, aligning with expectations and representing 26.5% of the full-year estimate of PHP12.65b. Service revenues rose 9% to PHP23.23b, driven by higher mobile voice and data revenues. Mobile voice revenues increased 13% to PHP8.66b, while non-SMS data revenue grew 13% to PHP2.79b. SMS revenues remained flat at 1% to PHP7.01b.

The company's EBITDA was steady at PHP8.80b, with higher subsidies and operating costs being offset by a significant drop in depreciation charges. The total depreciation expenses declined 45% YoY and 27% QoY, while recurring depreciation costs dropped 18%. This led to a 245% YoY increase in EBIT to PHP4.73b.

Key Financial Highlights

Share Price: PHP1,695.00
Target Price: PHP1,582.00 (-7%)
Market Cap (USD): 5.1B
Average Daily Trading Volume (USD): 2M
52-Week High/Low (PHP): 1,810.00 / 1,374.00
Free Float (%): 22.3
Issued Shares (m): 133
Market Capitalization (PHP): PHP224.7B
Major Shareholders:
- Singapore Telecommunications Ltd.: 47.3%
- Ayala Corp.: 30.4%
- Matthews International Capital Management: 3.0%

Financial Forecast

FYE Dec (PHP m)	FY11A	FY12A	FY13E	FY14E	FY15E
Revenue	81,518.3	86,446.0	90,514.1	93,914.4	97,228.1
EBITDA	34,454.0	34,440.4	36,232.4	39,083.9	40,007.5
Core Net Profit	10,029.8	10,274.9	11,367.5	12,651.0	13,084.2
Core EPS (PHP)	75.26	77.10	85.29	94.92	98.17
Core EPS Growth (%)	2.9	2.4	10.6	11.3	3.4
Net DPS (PHP)	62.00	65.00	67.00	70.00	72.00
Core P/E (x)	22.5	22.0	19.9	17.9	17.3
P/BV (x)	4.6	4.8	5.4	5.0	4.6
Net Dividend Yield (%)	3.7	3.8	4.0	4.1	4.2
ROAE (%)	21.0	21.6	25.8	29.3	28.0
ROAA (%)	7.7	7.4	7.9	9.2	9.7
EV/EBITDA (x)	5.7	5.8	7.8	7.0	6.7
Net Debt/Equity (%)	89.9	117.7	136.3	102.2	87.2

Financial Performance in 1Q14

Item	1Q14 (PHPm)	1Q13 (PHPm)	YoY Change (%)	QoQ Change (%)
Service Revenues	23,230	21,368	9	0
OPEX & Subsidy	(14,434)	(12,592)	15	(4)
EBITDA	8,796	8,776	0	7
EBITDA Margin	38%	41%	na	na
Depreciation and amortization	(4,068)	(7,407)	(45)	(27)
Affected by network modernization	(512)	(3,062)	(83)	(30)
Others	(3,556)	(4,345)	(18)	(27)
EBIT	4,728	1,369	245	81
Non-Operating Charges	(1,779)	(713)	150	189
NIAT	2,949	656	350	106
Deferred tax on unexercised stock options	41	-	na	310
Add (deduct) forex loss (gain)	(145)	90	(261)	(207)
Other adjustments - accelerated depreciation	512	2,340	(78)	(0)
Core NIAT	3,357	3,086	9	61

Segment Performance

Mobile segment: Accounted for 79% of total service revenues, up 8% YoY driven by mobile voice and data.
Broadband: Grew 12% to PHP2.79b.
Fixed line data: Increased 19% to PHP1.32b.
Subscriber Growth: Broadband subscribers grew 8% QoQ and 26% YoY to 2.19m.
ARPU: Postpaid ARPU rose 3% YoY to PHP1,140, but fell 1% QoQ. Prepaid and TM ARPU decreased by 9% and 10%, respectively, but remained stable QoQ.

Cost and Expense Analysis

Subsidy: Increased 8% to PHP1.74b.
Interconnect: Decreased 6% to PHP2.057b.
Selling, advertising and promotions: Rose 40% to PHP1.131b.
Re-contracting: Increased 23% to PHP600m.
Staff costs: Up 17% to PHP1.950b.
Utilities, supplies and other administrative expenses: Increased 14% to PHP1.145b.
Cash operating expenses: Grew 14% to PHP11.907b.
Depreciation and amortization: Declined 45% YoY and 27% QoQ to PHP4.068b.

Profitability and Efficiency

EBITDA margin: 42.3% (up from 39.8%).
EBIT margin: 19.0% (up from 12.6%).
Pretax profit margin: 17.3% (up from 11.3%).
Net profit margin: 12.1% (up from 7.9%).
ROAE: 29.3% (up from 25.8%).
ROAA: 9.2% (up from 7.9%).
Dividend cover: 1.4x.
Current ratio: 0.7x.
Debt/EBITDA: 1.3x (down from 1.8x).
Capex/revenue: 20.1% (down from 30.7%).

Investment View

Maintain HOLD: With a target price of PHP1,582.00, the company is trading at 17.7x PER.
Profit Forecast: PHP12.62b for 2014, implying 8.8% YoY growth.
EPS Forecast: PHP94.90.
Free cash flow yield: 8.6% (up from 5.3%).

Share Price Performance

1 Month: +2.5%
3 Months: -3.7%
12 Months: +4.6%
Relative to Index: -1.3%, -14.3%, +10.9%

Summary

Globe Telecom's core earnings and service revenues showed steady growth in 1Q14.
Mobile segment remained the primary revenue driver.
Depreciation costs significantly declined due to accelerated charges booked in 2013.
The company's financial performance was strong, with notable improvements in profitability ratios.
The target price remains at PHP1,582.00, and the investment recommendation is HOLD.

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