Annual Results Announcement for the year ended 31 December ... · 1 1 9 9 . . 7 7 % % 61.1. Year ended 31 December. Business Review. Number of MPLS VPN service sites over 3,200, representing

CITIC 1616 Holdings Limited 中信

1616

集團有限公司

(Stock Code: 1883)

Annual Results Announcementfor the year ended 31 December 2008

18 March 2009

Annual Results Announcementfor the year ended 31 December 2008

18 March 2009

CITIC 16162

Highlights for the Year Ended 31 December 2008Highlights for the Year Ended 31 December 2008

Profit attributable to the equity holders of the Company increased by 26.4 % toHK$332.1million, as compared against last year

Revenue generated from SMS Services rose 32.3% compared against last year to HK$247.1millionRevenue generated from Mobile VAS rose 59.1% compared against last year to HK$94.5millionCPCNet recorded remarkable profit growth. Net profit growth by 128.0% as compared to 2007Completion the acquisition of China Motion’s international voice business by 30 September 2008 At 31 December 2008, cash and cash equivalents was HK$795.0million. No debt as at 31 December 2008Final dividend of 6.4 cents, together with interim dividend of 2 cents, the total dividend payment for the year of 8.4 cents, an increase of 104.9% as compared to 2007 and represent a dividend payout ratio of 50.0%

Excluding the interest income from IPO in 2007, net profit surged by 49.5%, as compared against last year

Revenue generated from Voice services amounted to HK$1,613.4million, representing a 38.8% increase as compared against last year

Turnover recorded a strong growth of 67.3% as compared against last year

3

Financial ReviewFinancial Review

CITIC 16164

0

500

1,000

1,500

2,000

2,500

2004 2005 2006 2007 2008

TurnoverTurnover

1,364.21,486.1

67.3%67.3%

Year ended 31 December

980.01,047.2

TurnoverTurnover

HK $m

Turnover increased 67.3% to HK$2,486.4 million when compared with last year

2,486.4

CITIC 16165

0

500

1,000

1,500

2,000

2,500

2007 2008

Turnover - 1616 Turnover - CPCNet Turnover - CMN

ProformaProforma TurnoverTurnover

31.2%31.2%


Proforma Turnover Including full year of CPCNet and the 4th quarter 2007 of ChinaMotion NetCom (“CMN”)

Proforma Turnover Including full year of CPCNet and the 4th quarter 2007 of ChinaMotion NetCom (“CMN”)

HK $m

77.6%

17.9%

4.5%

76.8%

18.5%

4.7%

* After elimination the inter-company transaction

CITIC 16166

Turnover of Four Major Business SegmentsTurnover of Four Major Business Segments

Voice Services Voice Services

0

300

600

900

1,200

1,500

1,800

2006 2007 2008


1,141.6 1,162.5

HK$ m

38.8%

38.8%

SMS ServicesSMS Services

0

50

100

150

200

250

2006 2007 2008


117.1

186.8

HK$ m

32.3%

32.3%

Mobile VASMobile VAS

0

20

40

60

80

100

2006 2007 2008


30.9

59.4

HK$ m

59.1%

59.1%

Virtual Private Network and OthersVirtual Private Network and Others

0

100

200

300

400

500

600

2006 2007 2008


74.6 77.4

HK$ m

586.

6%58

6.6%

1,613.4247.1

94.5 531.4

CITIC 16167

Turnover BreakdownTurnover Breakdown

0

500

1,000

1,500

2,000

2,500

2004 2005 2006 2007 2008

Virtual Private Networkand Others

SMS Services

Turnover breakdown Turnover breakdown by Businessby Business

HK$m

1,364.2

83.7%

5.5%2.2%

Voice Services Mobile VAS

8.6%

1,486.1

78.2%

5.2%4.0%

12.6%

67.3%67.3%


980.01,047.2

90.1%

4.6%5.2%

88.1%

7.7%3.9%0.3%0.1%

ProformaProforma Turnover Breakdown Turnover Breakdown by Businessby Business


2,486.4

64.9%

21.4%

3.8%

9.9%

0

500

1,000

1,500

2,000

2,500

2007 2008

HK$m

1,895.2

65.9%

3.1%

21.1%

9.9%

31.2%31.2%

2,486.4

64.9%

21.4%

3.8%

9.9%

CITIC 16168

267.3343.6

0

50

100

150

200

250

300

350

2007 2008

Profit GrowthProfit Growth

40.5

222.2

332.1

0

50

100

150

200

250

300

350

2007 2008

HK$m


ProformaProforma operating resultoperating result

HK$mInterest Income from IPO

Net profit attributable to equity holdersNet profit attributable to equity holders

26%26%

28.5%28.5%

07 : Excluded interest income form IPO, IPO related listing expense and share option expenses, and combined with CPCNet full year result & CMN 4th quarter result (included 100% interest of CM Tel USA)

08 : Excluded intangible amortization in relate to acquisition of CPCNet & CMN and included 100% interest of CM Tel USA

50%50%


CITIC 16169

Sustain Solid Margin (Proforma)Sustain Solid Margin (Proforma)

* Excluding interest income from IPO, IPO related listing expenses, share option expenses and discontinued operations# Excluding intangible amortization, include full year result of CPCNet and the 4th quarter result of CMN (included 100% interest of CM Tel USA)

21.4%21.5%

20.3%

16.5%16.1% 16.3%

13.7%13.8%13.3%

5%

10%

15%

20%

25%

2006 2007 2008

EBITDA margin * Operating margin *# Net margin #

CITIC 161610

Strong Liquidity and Capital StructureStrong Liquidity and Capital Structure

HK$mOperating cash flow before changes in working capital & tax

Net cash generated from operating activities

+Interest received

Capital expenditure

2004

173.8

50.4

55.8

2005

183.9

348.4

47.6

2006

For the year ended 31 December

292.4

252.9

30.2

2007

335.7

323.4

62.4

HK$m

Cash and cash equivalents

Debt

Gearing ratio

At 31 December

17.2

- NIL -

Net Cash

43.4

- NIL -

Net Cash

31.9

- NIL -

Net Cash

780.6

- NIL -

Net Cash

2008

493.6

420.5

123.8

795.0

- NIL -

Net Cash

CITIC 161611

Shareholding Structure at 31 December 2008Shareholding Structure at 31 December 2008

Government of SingaporeInvestment Corporation

Pte Ltd.8.0%

Others31.1%

Cornerstone Investors

8.3%

CITIC PACIFIC52.6%

12

Business ReviewBusiness Review

CITIC 161613

Major Business Segment – Voice ServicesMajor Business Segment – Voice Services

Voice ServicesVoice Services

0

2,000

4,000

6,000

8,000

10,000

12,000

2007 20080

400

800

1,200

1,600

2,000

0.207Rev per min (HK$)

HK$m

1,162.5


Turnover (RHS)Voice calls mins carried (LHS)

Handled over 8.10bn mins voice traffic

5.61 billion

8.10 billion

20072007 Voice Sales by customerVoice Sales by customer

20082008

(mn mins)

44%44%

39 %39 %

1,613.4

0.199


Rest of World50.9%

China 49.1%

Rest of World49.3%

China 50.7%

CITIC 161614

Major Business Segment – Voice ServicesMajor Business Segment – Voice Services

Continue to expand the voice business with the China operatorsCompletion of acquisition of China MotionDirect Connect to 6 Vietnam carriers with a strong growth in capacityExpand capacity into Japan and Singapore POP to meet business growth demand in the regionNewly interconnect with 93 international customers for voice businessestablished direct interconnections to Tanzania, UAE, Lao, Pakistan,Luxemburg, Nepal, Monaco and MongoliaLaunched new business model of “voice service outsourcing”Challenge in the period - Price pressure of voice services

CITIC 161615

0

500

1,000

1,500

2,000

2,500

3,000

2007 20080

50

100

150

200

250

20072007 SMS Sales by customerSMS Sales by customer

20082008

Rest of World56.8%

China43.2%

Handled approximately 1.77 bn SMS messages

Major Business Segment – SMS ServicesMajor Business Segment – SMS Services

SMS ServicesSMS Services

0.098 0.140Rev per message (HK$)

HK$m247.1

186.8

Turnover (RHS)

(mn messages)

32 %32 %

Rest of World57.1%

China42.9%Year ended 31 December


62.3% 47.0%

12.2%10.7%

17.9%14.8%

14.9%

20.2%

China Outbound (LHS) International (LHS) China Inbound (LHS)Hong Kong (LHS)

1,896.91,766.4

CITIC 161616

Major Business Segment – SMS ServicesMajor Business Segment – SMS Services

Further leadership in international SMS for all mobile carriers in China by providing 25 more destination countries SMS delivery.

Obtained GSMA recognized "Open Connectivity (OC)" SMS hubbing compliance.

Signed agreement with O2 Group companies to provide international SMS service.

Signed SMS agreement with international operators including WIND Italy, WIND Greece, NTS Indonesia, and Tyntec Germany.

CITIC 161617

0

20

40

60

80

100

2007 2008

Mobile VASMobile VAS

HK$m

59 %59 % 94.5

59.4

Turnover - Mobile VAS


Major Business Segment – Mobile VASMajor Business Segment – Mobile VAS

Mobile VAS

Benefits from the Olympics event in Beijing on increasing roaming voice and data activities.

Service extension to Korea and experience strong Growth for "Single IMSI Multiple Number (SIMN)" in Greater China region.

Signed agreements with Conexus Mobile Alliance member companies to extend "Prepaid Roaming Hubbing" service such as Philippines, Indonesia, Malaysia and Italy.

Extensive progress on GSMA OC Roaming hub initiative and trial been completed between mobile operator in Asia and Europe.

Signed Prepaid Roaming Hub agreements with operators such as Starhub Singapore, Smartone Macau, NTS Indonesia, O2 UK, WIND Italy, and Greece.

Establish GRX peering with various operators such as i-Basis, TDC and Tele 2.

Commercial launch of New products under CDMA technology.

CITIC 161618

CPCNet Business Review

0

20

40

60

80

100

2007 20080

600

1,200

1,800

2,400

3,000

3,600

Profit (LHS) No of VPN Sites (RHS)

No. of VPN sites

19.7%19.7%

61.1


Business Review

Number of MPLS VPN service sites over 3,200, representing a 19.7% growth when compared with the same period last year.Awarded the ISO 9001:2000 and 27001 Information Security Management System CertificationCPCNet snatched four accolades at The Asia Pacific Customer Service Consortium’s 2007 Customer Relationship Excellence Awards. Hong Kong Economic Digest Awards in best SME partner 2008.

26.8

HK$m

128 %128 %

2,684

3,212

19

ProspectsProspects

CITIC 161620

ProspectsProspects

Strengthen market development and exercise prudent cost control Well-prepared technically to support launch of 3G services, and actively work with 3G operators in China; watch closely 4G technology trendContinue business integration with China Motion for maximum synergies

Voice servicesStrive to expand retail phone card business in new overseas market and speed up the growth of existing markets such as the United States, Japan and Singapore

SMS Business and Mobile VAS BusinessDevelop corporate SMS business, targeting large corporate clients Focus on the development in the United States, Canada and other emerging markets

Virtual Private Network BusinessIncreasing demand from enterprises provides new opportunities

21

Q&AQ&A

Documents

Annual Results Announcement for the year ended 31 December ... · 1 1 9 9 . . 7 7 % % 61.1. Year ended 31 December. Business Review. Number of MPLS VPN service sites over 3,200, representing