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Citic Telecom: Interim Dividend Maintained

Published Tue, 15 Sep 2020 12:02:02 -0400 on Seeking Alpha

Seeking AlphaCitic Telecom: Interim Dividend MaintainedSep. 15, 2020 12:02 PM ET|| About: CITIC Telecom International Holdings Limited (CCTTF)by: The Value PendulumThe Value Pendulum Asia Value & Moat StocksUncover cheap stocks, great businesses listed in Asia focusing on HongKong SummaryCitic Telecom maintained its interim dividend of HK$0.05 for 1H 2020, which is the same as what was paid out for 1H 2019, despite an increase in capital expenditures.
Citic Telecom's outlook for 2H 2020 and beyond is dependent on the easing of travel restrictions for Mainland Chinese visitors, and the growth of its Southeast Asian enterprise solutions services business.
Citic Telecom trades at 5.8 times consensus forward FY 2021 EV/EBITDA, and it offers a consensus forward FY 2021 dividend yield of 9.1%.
Elevator Pitch
I maintain my Neutral rating on Hong Kong-listed Macau telecommunications services provider Citic Telecom International Holdings Ltd. (OTC:CCTTF) [1883:HK].
This is an update of my prior article on Citic Telecom published on March 20, 2020. Citic Telecom's share price has increased by +9% from HK$2.33 as of March 19, 2020 to HK$2.54 as of September 14, 2020, since my last update. Citic Telecom trades at 5.8 times consensus forward FY 2021 EV/EBITDA, and it offers a consensus forward FY 2021 dividend yield of 9.1%.
Citic Telecom maintained its interim dividend of HK$0.05 for 1H 2020, which is the same as what was paid out for 1H 2019, despite an increase in capital expenditures from HK$154 million in 1H 2019 to HK$479 million in 1H 2020.
Looking ahead, Citic Telecom's outlook for 2H 2020 and beyond is dependent on the easing of travel restrictions for Mainland Chinese visitors, and the continued growth of its Southeast Asian enterprise solutions services business. Also, the strong growth in messaging services revenue for Citic Telecom's international telecommunications services business segment might not be sustainable going forward, if an... Read more