PCCW(00008)2024-04-02 09:21Viu Platform Performance - Viu's monthly active users reached 62.4 million by the end of 2023[4] - Viu's subscription revenue grew by 32% and total revenue increased by 27% in 2023[6] - Viu's monthly active users reached 62.4 million, with overall revenue increasing by 27% year-over-year, driven by a 32% rise in subscription revenue and a 15% increase in advertising revenue[9] - Viu's paid subscription revenue grew by 32%, with 1.34 million paying subscribers, a 10% increase, and monthly active users (MAU) reached 6.24 million[20] - Viu's advertising revenue increased by 15% YoY, with monthly active users reaching 62.4 million as of December 31, 2023[113] - Viu's OTT business EBITDA surged by 233% to HKD 592 million, with margin increasing from 9% to 24%[113] - Viu's paying subscriber base grew by 10% to 13.4 million, with subscription revenue increasing by 32% year-on-year[112] 5G and Broadband Network Expansion - The company's 5G customer penetration rate in the postpaid customer base expanded to 41%[6] - The company's 10G broadband network now covers 2.4 million households, with a significant increase in 2500M service adoption[6] - The 5G customer base reached nearly 1.4 million by the end of 2023, accounting for 41% of postpaid customers and over half of csl and 1O1O customers[13] - The company's 2500M broadband service saw a significant increase in user numbers, with service plan fees rising by HKD 98, and the company is prepared to offer up to 10G high-speed services to 2.4 million households[13] - Hong Kong Telecom's 5G customer base grew to 1.4 million, a 32% increase, and FTTH (Fiber-to-the-Home) customers reached 1.01 million, a 4% increase[21] - Mobile communication service revenue grew by 5% to HKD 8.348 billion, driven by roaming recovery and strong 5G adoption, with 5G penetration reaching 41% of postpaid customers by the end of 2023[107] Revenue and Financial Performance - The company's revenue in mainland China grew significantly by 32%[6] - The company's outbound roaming revenue in the second half of 2023 recovered to 95% of pre-pandemic levels[6] - The company's OTT business EBITDA grew more than twofold[6] - The company's roaming revenue surged by 176% in 2023, with roaming user numbers nearly doubling, and December's roaming revenue exceeding pre-pandemic levels[12] - Hong Kong Telecom's total revenue reached HKD 31.37 billion, a 3% increase, with EBITDA of HKD 13.4 billion, also a 3% increase[21] - Total revenue increased by 1% to HKD 36.347 billion, with Hong Kong Telecom's revenue rising by 1% to HKD 34.330 billion and OTT business revenue growing by 22% to HKD 2.452 billion[97] - EBITDA increased by 4% to HKD 12.831 billion, with Hong Kong Telecom's EBITDA rising by 3% to HKD 13.400 billion and OTT business EBITDA surging by 233% to HKD 592 million[97] - The company's overall revenue for 2023 was HKD 36.347 billion, with EBITDA of HKD 12.831 billion[19] - The company's loss from continuing operations attributable to equity holders improved to HKD 471 million[97] - The final dividend per ordinary share is HKD 28.48 cents, bringing the full-year dividend to HKD 38.25 cents per ordinary share[97] - The board declared a final dividend of HKD 28.48 cents per share, bringing the full-year dividend to HKD 38.25 cents per share[100] - Adjusted funds flow for 2023 rose by 3% to HKD 5.798 billion, with a full-year distribution of HKD 0.7649 per stapled unit[110] Media and Entertainment Business - The company's MakeALive online and live events expanded to five Asian markets[6] - The company's ViuTV maintained advertising revenue despite a weakening TV advertising market[6] - The company's Viu platform serves 16 markets across Asia, the Middle East, and South Africa[4] - ViuTV's online platform registered members grew by 9% to over 3 million, supported by popular shows like "Legal and Love" and "Office Romance"[10] - The company's MakeALive service expanded to five Asian markets, showcasing its capability to host online and ticketed live events for its artists and other performers[11] - The company's media business saw OTT revenue of HKD 2.452 billion, a 22% increase, and free TV and related business revenue of HKD 952 million, a 5% increase[20] - Free TV and related business revenue increased by 5% to HKD 952 million, with EBITDA nearly doubling to HKD 190 million[99] - ViuTV achieved stable ratings and attracted sponsors from various industries with its diverse entertainment programs[99] - The company expanded into new entertainment formats such as movies, stage plays, and overseas events, contributing to stable growth in event and artist management businesses[99] - Free TV and related business revenue grew by 5% to HKD 952 million, with EBITDA increasing by 96% to HKD 190 million[114] - ViuTV's digital platform registered members grew by 9% YoY to over 3 million[115] - ViuTV's EBITDA for the year ended December 31, 2023, increased by 96% to HKD 190 million, with margin rising from 11% to 20%[116] Corporate Governance and Leadership - Mr. Tse, aged 86, serves as a non-executive director of PCCW and has extensive experience in the insurance industry across Asia and globally[27] - Mr. Tang, aged 49, was appointed as a non-executive director and vice chairman of PCCW in August 2023, and also holds senior positions in China United Network Communications Group[27] - Ms. Meng, aged 51, was appointed as a non-executive director of PCCW in December 2021 and serves as the chairman and president of China Unicom International[28] - Ms. Wang, aged 53, was appointed as a non-executive director of PCCW in December 2021 and serves as the general manager of the finance department at China United Network Communications Group[28] - Mr. Wei, aged 53, has been a non-executive director of PCCW since May 2012 and has over 20 years of experience in investment and operational management in China[28] - Vision Deal HK Acquisition Corp. is led by Mr. Wei as Executive Director and Chairman, who also chairs the Nomination Committee[30] - Mr. Wei serves as a Non-Executive Director for Polestar Automotive Holding UK PLC and JNBY Co., Ltd[30] - Mr. Wei was recognized as one of "China's Best CEOs" by FinanceAsia magazine in 2010[30] - Mr. Wei holds a degree in International Business Management from Shanghai International Studies University[30] - Mr. Wei has extensive experience in the banking sector, including roles at HSBC and PricewaterhouseCoopers[30] - Mr. Wei has served as an Independent Non-Executive Director for multiple companies, including 500.com Limited and BlueCity Holdings Limited[30] - Mr. Wei was appointed as an Independent Non-Executive Director for China Chain Store & Franchise Association[30] - Mr. Wei has held positions in various international banking roles, including in Saudi Arabia and the United States[30] - Mr. Wei has been involved in the establishment of the Zhi Li Education Fund in Hong Kong[31] - Mr. Wei has a background in corporate finance and investment banking, with experience at PricewaterhouseCoopers and HSBC[30] Risk Management and Compliance - The company's risk management and internal control systems, including ESG risks, are reviewed at least annually by the audit committee[67] - The company has established a robust risk management culture, ensuring operational units identify and manage risks with corresponding controls[68] - The company promotes a strong compliance and risk management culture across the organization, adhering to ethical standards through comprehensive policies and processes[69] - The company has established a comprehensive anti-bribery and corruption policy and procedure manual, ensuring integrity and reducing corruption risks[70] - The company maintains strict confidentiality and efficient handling of insider information, ensuring proper approval before disclosure[70] - The company has a three-line defense model for risk management, with clear responsibilities for risk identification, oversight, and independent assurance[74] - The company’s risk management framework includes regular reviews by the Risk Management, Monitoring, and Compliance Committee, reporting significant risks to the Board[75] - The Group Internal Audit Department adopts a risk-based audit approach, covering major risks across operations and reporting findings to senior management and the Audit Committee[76] - The company ensures asset protection and compliance with accounting standards through established policies and controls[72] - The company’s risk management process combines top-down and bottom-up approaches for comprehensive risk identification and mitigation[74] - The Group Risk Management and Compliance Department oversees the enterprise risk management framework and regularly reports to the Audit Committee[75] - The company’s internal audit function is independent of management, reporting directly to the Board and the Audit Committee[76] - The company’s senior management, with the assistance of risk management committees, designs and monitors the enterprise risk management and internal control systems[76] - The company has adopted the principles of ISO 31000:2018 for managing business and operational risks, integrating risk management into daily operations[78] - The company conducts annual certifications to ensure the effectiveness of its enterprise risk management and internal control systems[78] - In 2023, the company increased training sessions and risk workshops, unified risk reporting terminology, and enhanced communication with authorized directors regarding risk management[82] - The company's internal audit function focuses on IT security, data privacy, third-party management, and regulatory compliance[82] - The company's risk management framework is considered adequate and effective, with sufficient resources and staff qualifications[83] - External auditors also assess the adequacy and effectiveness of the company's risk management and internal controls as part of their statutory audit[83] - The company continuously improves its risk management capabilities, particularly in managing environmental, social, and governance (ESG) risks[84] - The company maintains a risk register to track and monitor risk mitigation actions across operational units[81] - The company's risk management process includes risk identification, analysis, evaluation, and the implementation of mitigation plans[80] - The company's risk management and compliance department regularly reports to the audit committee and other subcommittees on risk assessment progress[77] - The company has implemented measures to combat cyber threats, including subscribing to attack surface management and continuous automated red teaming solutions, as well as bounty hunting platforms for in-depth threat assessments[85] - The company ensures strict compliance with data privacy laws and IT security policies, conducting continuous reviews of endpoint security and network protection to maintain high information security standards[85] - The company is adopting an enhanced technology evaluation framework for AI to address potential vulnerabilities and ensure effective governance and supervision in meeting regulatory requirements and managing technology risks[86] - The company has launched various business projects to achieve sustainable growth and create long-term value for stakeholders, with ongoing risk management support to ensure timely and high-quality project delivery[86] - The company has established training, performance management, and recognition programs to retain and develop talent, supported by the implementation of a human resources system and succession planning to mitigate the impact of key personnel loss[87] - The company has adopted business continuity management policies and corporate incident response plans to ensure prompt handling of major incidents and maintain normal business operations[87] - The company leverages its strengths, such as product functionality, coverage, timely product launches, and market experience, to maintain competitiveness in a market increasingly driven by innovations like generative AI[89] - The company is expanding its diversified business portfolio into industries like fintech and health tech, while monitoring political and macroeconomic changes to mitigate potential financial and strategic risks[89] - The company is exploring strategic business opportunities through internal growth and potential mergers or strategic investments in the telecom and technology markets[89] Sustainability and Corporate Social Responsibility - The company has integrated environmental elements into sustainable business operations, including electric vehicle charging solutions through a joint venture with CLP Holdings[132] - The company has installed solar panel systems on four machine buildings and plans to install more to promote renewable energy[133] - The company has adopted paperless systems and sustainable materials in its operations, including PEFC-certified paper and eco-friendly materials in employee canteens[134] - The company has signed sustainability-linked loans totaling over USD 3.9 billion with financial institutions as of December 31, 2023[134] - The company has received multiple awards for its sustainability efforts, including being ranked in the top 67% of global telecommunications peers by MSCI ESG Ratings[135] - The company was awarded the "Best ESG Report Award - Mid Cap" and "ESG Best Performance Award - Mid Cap" at the BDO ESG Awards[136] - The company has established a comprehensive employee performance evaluation system and reward program to foster a performance-based culture[137] - The company has launched a membership rewards program called The Club, which helps attract customers and provides opportunities for personalized services[138] - The company received over 80 customer service awards in 2023 and over 22,000 customer praises[139] - The company maintains partnerships with over 5,000 global suppliers and has implemented responsible procurement practices[140] - The company has obtained ISO 9001:2015 certification for its quality management system since 2018[141] - The company provided over HKD 17 million in donations and materials to support the Hong Kong community[142] - The company has implemented a "Volunteer Recognition Program" to provide volunteer leave for employees participating in community services[143] - The company adheres to multiple laws and regulations, including the Telecommunications Ordinance and the Personal Data (Privacy) Ordinance[144] Shareholder and Dividend Information - The final dividend per ordinary share is HKD 28.48 cents, bringing the full-year dividend to HKD 38.25 cents per ordinary share[97] - The board declared a final dividend of HKD 28.48 cents per share, bringing the full-year dividend to HKD 38.25 cents per share[100] - Proposed final dividend of HKD 28.48 cents per ordinary share for the year ended December 31, 2023, subject to approval at the Annual General Meeting on May 30, 2024[127] - Interim dividend of HKD 9.77 cents per ordinary share paid in September 2023 for the six months ended June 30, 2023[127] - The company paid an interim dividend of HKD 9.77 cents per ordinary share in September 2023, totaling approximately HKD 756 million[151] - The board proposed a final dividend of HKD 28.48 cents per ordinary share for the year ended December 31, 2023, subject to shareholder approval[151] Legal and Regulatory Compliance - The company's compliance with the Competition Ordinance could result in a maximum fine of 10% of annual turnover in Hong Kong for up to three years for serious anti-competitive behavior[148] - Violations of the Telecommunications Ordinance could result in a maximum fine of HKD 1 million or a higher amount as determined by the court[145] - Violations of the Broadcasting Ordinance could result in a maximum fine of HKD 1 million, with the possibility of license revocation in severe cases[146] - Violations of the Trade Descriptions Ordinance could result in a maximum fine of HKD 500,000 and imprisonment for up to five years[147] - The company has appointed a Group Data Protection Officer to oversee all activities related to data privacy compliance[149] - The company will publish a separate 2023 Environmental, Social, and Governance report in accordance with the ESG Reporting Guide[150] Share and Option Plans - The total number of shares that can be issued under the 2014 Share Option Scheme is 728,229,465, representing approximately 9.41% of the issued shares as of the annual report date[175] - The company's 2014 share option plan has not granted any options since its adoption until December 31, 2023, with the number of authorized options remaining at 728,229,465 as of both January 1, 2023, and December 31, 2023[177] - The total number of shares available for issuance under the PCCW Subscription Plan is 71,254,636, representing approximately 0.92% of the issued shares as of the annual report date[179] - The PCCW Share Award Plans have been extended for 10 years, effective from November 15, 2022, and will expire on November 14, 2032[182] - Total unvested shares as of December 31, 2023, amounted to 6,391,875[184] - Total shares granted during the year were 4,554,458[184] - Total shares forfeited or lapsed during the year were 854,626[184] - Total shares vested during the year were 4,769,362[184] - The highest number of shares granted to a single individual (Xu Hanqing) was 1,123,822 on August 4, 2023[184] - The total number of shares granted to the top five highest-paid individuals was 442,326[184] - The total number of shares granted to service providers was 1,162,304[184] - The total number of shares granted to other recipients was 531,004[184] - The fair value of shares granted on August 4, 2023, was HKD 3.92 per share[184] - The fair value of shares granted on May 30, 2023, was HKD 4.02 per share[184] - Total unvested share awards as of December 31, 2023, amounted to 2,137,481 units[185] - Total share awards granted during the year were 1,473,141 units[185] - Total share awards forfeited or lapsed during the year were 349,055 units[185] - Total share awards vested during the year were 1,488,259 units[185] - The fair value of share awards granted in 2023 ranged from HKD 9.05 to HKD 10.18 per unit[185] - The highest number of share awards granted to a single participant in 2023 was 262,563 units[185] - The total number of share awards granted to service providers in 2023 was 224,336 units[185