The Figures
I like to check out a company's financial figures in SGX's website before doing further research into a company.
Screencap taken from SGX's website. I am not aware they have business in Singapore...hmmm
Payout Ratio More than 100% for a few years!! Can sustain meh?
Debt/Equity increasing over the years
The Business
Personally, I feel Cable TV business is a sunset industry. Millennials and those who are tech savvy are consuming content on the go or via other channels. This business segment is not likely to grow further unless they could produce original content (such as what Netflix is doing).
From my understanding, APTT offers 300 Mbps maximum speed for broadband access. I do not know what's the highest current speed available in Taiwan. I think the likelihood of broadband prices increase is very low. However, they will need to upgrade their equipment to keep up with Internet speed. There's other choices for internet access such as mobile broadband. 5G another potential threat? In Singapore, broadband prices has also been coming down over the years due to intense competition.
Companies that are technology driven has to be innovative and quick to react to changes in their industry. Remember Nokia? When other handset manufacturers adopted Android OS, they were still stuck in Symbian Era. Imagine if Netflix is still sending DVD or Blu-Ray movies by mail, would they still be around? Customers do not want to wait for days in order to watch a movie.
My Verdict
Even though the company could be undervalue from P/B and PE ratio perspective, I would avoid investing in a company which is operating in a sunset industry and doesn't have a turnaround story to tell.
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