China Mobile (Hong Kong) Limited · Performance-based compensation plan. 9 Rapid Business Growth...
Transcript of China Mobile (Hong Kong) Limited · Performance-based compensation plan. 9 Rapid Business Growth...
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China Mobile (Hong Kong) LimitedChina Mobile (Hong Kong) Limited
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China Mobile (Hong Kong) Limited
August 31, 2000
2000 2000 Interim ResultsInterim Results
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ManagementManagement
Mr. Wang Xiaochu Chairman and CEO
Mr. Li Zhenqun Vice Chairman and COO
Mr. Ding Donghua Director and CFO
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AgendaAgenda
Performance Highlightsfor the First Half
of 2000
Operating Resultsfor the First Half
of 2000
Financial Results for the First Half
of 2000
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Major AchievementsMajor Achievements
New ProductInitiatives
Rationalized Corporate Structure
Subscriber Base Exceeded 20 m
Broader Use of Employee Stock
Options
1H 2000
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Ownership StructureOwnership Structure
China MobileCommunications Corporation
Shenzhen Company
JiangsuMobile
ZhejiangMobile
GuangdongMobile
FujianMobile
HenanMobile
HainanMobile
China Mobile (HK) Group Ltd
China Mobile (HK) Ltd
Public Shareholders
100%
75%
100%
100% 100% 100% 100% 100% 100%
25%
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ShenzhenShenzhen CompanyCompany
FunctionsMonitors and manages subsidiaries’ profitability and financial performanceVehicle for Renminbi debt capital raisingPerforms interconnection and roaming settlement among subsidiaries and between our subsidiaries and other partiesConducts R&D for wireless data communications
StructureProfit management centerRoaming and interconnection clearing house Wireless data research and development center
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Enhanced Management Enhanced Management InitiativesInitiatives
Broader use of employee stock options
Comprehensive performance assessment system for subsidiaries
Enhanced internal control mechanisms
Employee performance assessment
Performance-based compensation plan
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Rapid Business GrowthRapid Business Growth
Total subscribersTotal subscribers 21.638 million21.638 million
EBITDA RMB16.817 billion
Total revenue RMB28.897 billion
Net income RMB8.724 billion
Total minutes of usage 35.452 billion
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Further Improved Further Improved Operating FundamentalsOperating Fundamentals
Achieved integration synergies
Effective control over bad debts
Increased network utilization and employeeproductivity
Enhanced internal management information system
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Promising OpportunitiesPromising Opportunities
• Mobile Commerce Solution• MISC Wireless Portal Mobile Commerce and Content Aggregation
• WAP• GPRS• 3G
Wireless Broadband Internet Access/ Services
• VoIP• VPN• IDC• Internet Access
IP Based Voice and Data Services
• IN• Voice• SMS• VAS
Core Mobile Communications Services
Mov
ing
up th
e va
l ue
c hai
n
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Mission and StrategyMission and Strategy
Mission : A World-class global wireless multimedia services provider
Strategy : Maximize enterprise valueand shareholder return throughorganic and external growth
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Operating PerformanceOperating Performance
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Overview of OperationsOverview of Operations
Note: Above data is proforma
June 2000Operating Statistics June 1999
Total number of subscribers (m) 21.638 12.227Contract subscribers 19.142 12.227Prepaid subscribers 2.496 -
Market share 83.0% 93.0%
Total Minutes of Usage (bn mins) 35.452 24.000MOU (mins) 320 378ARPU (Rmb) 261 339
Nominal Network Capacity (m) 20.081 15.282
Penetration 8.0% 4.1%
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15Note: Above data is proforma
Rapid GrowthRapid Growth
Total Subscribers Total MOUTotal MOU
(‘ 000) (Million mins)
12,227
21,638
0
5000
10000
15000
20000
25000
30000
1999.6 2000.6
24,000
35,452
0
10000
20000
30000
40000
1999.6 2000.6
77%48%
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Effective Control of Effective Control of Bad DebtBad Debt
Note: Above data is proforma Bad debt ratio is calculated by dividing bad debt provision by revenue (excluding connection fees)
(%)
Bad Debt Ratio
2.36
4.18
3.182.62
1997 1998 1999 2000.6
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PostPost--acquisition Performance acquisition Performance of the New Subsidiariesof the New Subsidiaries
Employee ProductivityEmployee Productivity
Note: Above data is proforma
(%)
Bad Debt RatioBad Debt Ratio
(Number of subscribers/employee)
435491
679
1999.6 1999.12 2000.6
2.04
4.184.25
1999.6 1999.12 2000.6
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18Note: Above data is proforma
(mins)(bn min)
Total Minutes of Usage Total Minutes of Usage / / MOU MOU
34.9 35.5
23.5
56.2
383398452
320
0
10
20
30
40
50
60
1997.12 1998.12 1999.12 2000.60
100
200
300
400
500
Total minutes of usage MOU
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New Product IniNew Product Initiativestiatives
SMS-based services have achieved considerable scale
Significant progress made with experiments in GPRS mobile communications technology
Substantial growth in IP long-distance services
Increasing popularity of WAP services
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Current : Transition from 2G to 2.5G with minimum investment to provide low- to medium-speed wireless data services
Next Steps : Monitor developments in 3G technologies to progressively introduce such technologies ona market-driven basis
Network UpgradingNetwork Upgrading
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Capital ExpenditureCapital Expenditure
(US$ billion)
0.9
3.43.63.4
2000 2001 2002
Invested
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Financial ResultsFinancial Results
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9,578
16,817
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
1999.6 2000.6
Revenue EBITDA
Revenue and EBITDARevenue and EBITDA
(RMB Million) (RMB Million)
28,897
16,940
05,000
10,00015,00020,00025,00030,000
1999.6 2000.6
Actual Proforma
35%21,483
71%
40%
76%11,986
56.5%
58.2%
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Net ProfitNet Profit
4,004
8,724
01,0002,0003,0004,0005,0006,0007,0008,0009,000
1999.6 2000.6
118%
(RMB Million)
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Major Financial DataMajor Financial Data
ProformaRMB Million
ActualRMB Million
Growth Rate%
First Half 1999 ComparisonFirst Half 2000
Operating RevenueUsage FeeMonthly FeeConnection FeeOther Operating Revenue
Operating ExpensesLeased LinesInterconnectionDepreciationPersonnelSG&A
Operating Profit
14,173 20,143 42%2,898 4,250 47% 2,715 1,532 (44%)1,697 2,972 75%
21,483 28,897 35%
2,561 2,714 6%3,426 3,604 5%4,239 4,165 (2%)
931 1,476 59%2,872 4,616 61%
14,029 16,575 18%
7,454 12,322 65%
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Revenue CompositionRevenue Composition
First Half 1999ProformaFirst Half 2000
15%
5% 10%70%
Usage Fee Monthly Fee Connection Fee Others
13%
13%8% 66%
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Cost CompositionCost Composition
First Half 1999ProformaFirst Half 2000
22%
25%9%
28%16%
Leased Line Interconnection Depreciation Personnel SG & A
24%
30%
7%
21%18%
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Contribution by SubsidiaryContribution by Subsidiary
Note: Assumes Hong Kong head office expenses are shared by the six subsidiaries on a pro-rata basis
49%
13%
11%8% 2%
17%
50%13%
10%8% 2%
17%
Guangdong Zhejiang Jiangsu Fujian Henan Hainan
Percentage contribution of subsidiaries to total revenue
Percentage contribution of subsidiaries to aggregate EBITDA
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ARPU AnalysisARPU Analysis(RMB)
459405
339318
261
258 223 214 182
71 6646 43
38
10654
43 3314
24
32
28
27
253
27
050
100150200250300350400450500
1997.12 1998.12 1999.6 1999.12 2000.6
Usage Fee Monthly Fee Connection Fee Others
Note: Above data is proforma
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Capital StructureCapital Structure
2000.6 1999.12
Short Term Debt 3,895 6,199
Long Term Debt 7,007 7,285
Total Debt 10,902 13,484
Shareholders’ Equity 65,823 57,092
Total book capitalization 76,725 70,576
Total Debt / Total book capitalization 14% 19%
Cash, bank bal. and deposits 34,222 27,576
Net Cash 23,320 14,092
(RMB million)
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Strong Financial ProfileStrong Financial Profile
2000.6 1999.6
50.2X 89.8X
28.0X 46.7X
14% 11%
0.3X 0.3X
EBITDA / Interest
EBITDA – CAPEX / Interest Exp
Total Debt / Capitalization
Total Debt / EBITDA*
* Calculated from annualized EBITDA
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China Mobile (Hong Kong) LimitedChina Mobile (Hong Kong) Limited
Global Wireless Multimedia
A World-Class
Services Provider