China Television Company, Ltd. engages in the television broadcasting business in Taiwan. It produces and distributes commercial and international TV programs. The company was founded in 1957 and is based in Taipei, Taiwan.

Taiwan

China Television Company, Ltd.

Communication Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

9928.TW reported revenue of TWD 881mn in the last 12 months, down 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 106% from FY24 to TWD -1.13.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 16ppts over six months and grown 4ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 2.0% in the last 12 months, a decline from 7.7% in FY23. 

Historically, 9928.TW has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -8.5%, down from -2.0% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -3.3%, below the peers. 

China Television Company, Ltd. reported a return on equity (RoE) of -5.7% in the last 12 months, down from -4.5% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -1.7% in the last 12 months, a decrease from -0.5% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.1 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

9928.TW has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note low margin volatility, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, weak debt servicing capacity, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure.

In highly turbulent market conditions, 9928.TW is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, 9928.TW is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from large to immense. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. In particular, the stock is 'expensive' on EV/EBITDA. 

China Television Company, Ltd.

NT$ 15.85

3

China Television Company, Ltd.

NT$ 15.85

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 15.85

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