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TVB Estimated Fair Value - Willis Ow
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willisow
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30-Mar-2017 16:31
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TVB announced its 2016 full year financial result. Due to sluggish HK advertisement market in 2016, revenue fell by 5.5% on a year on year basis to HKD4.21B. I have the breakdown of its sales revenue as follows 2016 2015 Advertisement income,net of agency deduction HKD2.62B HKD3.063B Decreased 15.5% Licensing income HKD919M HKD907M Increased 1.3% Subscription income HKD201M HKD126M Increased 59.5% Others HKD528M HKD422M Increased 25.1% Less Witholding Tax (HKD58M) (HKD63M) Net Sales Revenue HKD4.21B HKD4.455B From the above statistics, except for advertisement revenue, TVB managed to registered growth for all other businesses. For 2017, its subscription income is likely to double due to the exploding growth of subscribers to its OTT, mytv Super, which has crossed the 3million marks till date. In addition, the declined in advertisement revenue is also narrowing as compared to previous years. keeping finger crossed, if the global economic growth quicken in this year, it is likely that the company will register a rise in sales revenue. Operating profit fell by approximately of 68% to HKD323M on a year on year basis due to a 11.1% increased in operating expenses associated to the launched of mytv super and broadcasting of 2016 olympic game, as well as a decreased in gross profit due to a lower gross profit margin as a result of a weak advertising market in 2016. As informed by the company, its capex relating to its mytv super for 2017 is minimal, as a result of the increased in subscribers that way exceeded its projection of 1.4million by Nov2017, instead of a breakeven forcast, the company expect to receive profit from its OTT operation in 2017. Debt ratio increased to 54% of its shareholder equities due to issue of USD500M bond at interest rate of 3.625% for the purpose to repurchase 120M shares at a price of HKD35.075. The increased in gearing is positive to the company becos the borrowed fund at 3.625% enable the company to save a dividend financing cost of 7.41% when it buy back shares at HKD35.075 which currently pay a dividend of HKD2.60. Thus, for the year of 2017, assuming TVB managed to buy back the entire 120M shares as planned, it will result in a saving of approximately HKD159M per year from its weighted average cost of capital (7.41%-3.625%xHKD4.2B). Hence, if the share buy back proceed smoothly, it will increase TVB operating cashflow and intrinsic value. As the decreased in operating profit is less than my forcast, I' m pleased to revise up my estimated fair value to HKD35.75 from the previous estimation of HKD35.26. Upon completion of the share buyback, I will update its latest fair value with the new outstanding issued shares. Thank you :) |
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willisow
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13-Feb-2017 22:06
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Dear TVB Investors, TVB announced to raise its repurchase price for its share buyback from HKD30.50 to HKD35.075 and reduce its maximum number of shares to be repurchase from 138million to 120million, representing approximately 27.40% of the share capital of the company in issue as at the date of the announcement. As the new repurchase price is very close to my latest estimated fair value of HKD35.26, investors are advise to exercise your own discretion to your position and take note of tomorrow price movement. Get ready to buy Drumstick to celebrate :) Thank you and Great Huat to all TVB investors :) 
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willisow
Master |
09-Feb-2017 23:53
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Dear TVB Investors, the company that gave its acquisition offer to buy 29.9% stakes in TVB is called TLG Movie & Entertainment Group, a PRC company. If the deal go through, TLG Movie & Entertainment Group will become the largest shareholder of TVB. According to one of the TVB independent director, since the company have received the acquisition offer, they will have to conduct a shareholder meeting to vote for it. Although TVB claimed that there wasn' t any price quoted in the offer and they also need to acertain the source of fund from the acquirer, I believe that there is a possibility that the acquirer have given a quote to TVB otherwise it doesn' t make sense to conduct a shareholder meeting to vote and to check on the source of fund. Given that TVB have announced to pay HKD30.50 per share for its repurchase, it is highly possible that the acquirer had offer a higher price than TVB. Thus, it is likely to result in the following outcome 1) TVB abort its repurchase plan due to some of the shareholders decided to sell their shares to TLG or 2) TVB existing largest shareholder, Young Lion Capital may want to continue to control their ownership in TVB and thus raise the repurchase price to counter TLG offer or 3) Given that TLG intentionally come out with their acquisition offer during the period of share buyback by TVB, it show that the acquirer is very interested and keen to own TVB. Thus, they might further raise their offer in the event if TVB counter it. Regardless of whichever outcome stated in the above scenarios, I would believe that the offer price is higher than the current offer of HKD30.50 by TVB. During this period share price may jump drastically if there is any positive announcement, Thus, I would like to share my 2017 assessment of TVB fair value and revise up from HKD33.62 to HKD35.26. Investors are advised to monitor the share price just in case there is any major movement. Thank you and Huat All The Way :) |
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willisow
Master |
25-Jan-2017 11:11
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TVB announced a share repurchase plan to buy back 138 million of its existing 438 million shares, representing 31.51% of its share base. The repurchase amount at HKD4.209 billion will be funded entirely by internal cash. Previously i had said it is important to invest in a company with strong cash and balance sheet becos a company can do many wonders to boost its shareholder value by capitalising on this strength. The repurchase also signal that the company management have full confident in its business and long term prospect and this are material news that an investor should follow becos it will have great impact in its fair value. An investor should not follow those day to day scandle news, film produers not happy with each other, tvb very stingy and pay low salary, actor and actress not happy with each other, i dont watch tvb drama anymore and etc. These are auntie uncle favourite and have no material impact on a company fair value. If TVB fully buy back its 138 million shares as planned, my estimated fair value will be revised up from existing HKD33.62 to HKD53.62. TVB investors are strongly advise not to sell their shares prematurely and i will continue to update the progress of its share buyback and its fair value. Those who did not buy, most likely have missed the boat. However if TVB price were to fall back to HKD26.90 or below, you should pawn all your assets including your underwear and jump in. This is a gold mountain and not only a gold bar drop from heaven and is also the best chinese new year present from heaven. Thank you :) PLEASE DO NOT COMMENT OR REPLY IN THIS THREAD.THANK YOU :) TVB Makes Shares Repurchase Offer at $30.5/Share
2017/01/25 05:26
TVB (00511.HK) +2.850 (+10.714%)  Short selling $976.64K Ratio 20.722% announced that an offer will be made on behalf of the company to repurchase up to 138 million shares, representing approximately 31.51% of the share capital of the company in issue, at the price of $30.5 per share, representing a premium of 14.66% when compared to the last closing price (24 January). The offer, if accepted in full, will result in the company paying approximately $4.209 billion, and the consideration will be funded by existing cash resources of the group.Controlling shareholder Young Lion has confirmed that it has the firm intention not to tender into the offer any of the shares held by it. If the repurchase is fully accepted, the aggregate beneficial interest in the company&rsquo s share capital in issue held by the Young Lion concert party group may increase from its current level of approximately 29.90% to a maximum of approximately 43.66% upon close of the offer, and an application will be made by the company on behalf of the Young Lion concert party group for the whitewash waiver. (Quote is delayed for at least 15 mins.Short Selling Data as at 2017-01-24 16:25.) |
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willisow
Master |
10-Dec-2016 20:23
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PLEASE DO NOT REPLY OR COMMENT IN THIS THREAD, THIS IS STRICTLY MEANT FOR VIEWING ONLY. Readers are welcome to direct your comments or queries to my discussion thread " Feel free to share anything about investment" , Thank you :) 
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willisow
Master |
10-Dec-2016 20:20
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Im pleased to present the below consolidation for TVB, a prominent HK TV Station which aired popular and familiar cantonese TV drama acted by Chow Yun Fat, tong Leung, Andy Lau and etc. Those who have not heard of this company, should heard of its subsidiary called Shaw Brother which produced a number of popular HK movies as well. From the past data, we can see that it is a very stable and consistent company, with zero net debt and company is flooded with cash. Its advertising income was affected as of 2015 to 2016 which was similar to the downturn of the HK economy in both 2008-2009. After i sold off my Genting Singapore, i bought a second batch into TVB at the same purchase price as my first batch at HKD26.90. My assessment of its fair value at HKD33.62 and ideal entry price at HKD26.90 or below. A gentle reminder to all investors, the ideal entry price is derived based on a safety margin off its fair value and it is not a price projection. Investors are advised to buy in batches to further safeguard your capital against volatilties. The estimated fair value is derived based on a long term horizon and i have no timeline to realise its value. Investors with short term investment horizon are advised not to follow. PLEASE DO NOT REPLY OR COMMENT IN THIS THREAD, THIS IS STRICTLY MEANT FOR VIEWING ONLY. Readers are welcome to direct your comments or queries to my discussion thread " Feel free to share anything about investment" , thank you :) 
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