Japanese stock report - Nippon Telegraph and Telephone
UPDATE: Nippon Telegraph and Telephone falls for a fifth consecutive day, a five-day fall of 2.1% July 26, 2017 15:00 JST
NEWS BITES - JAPAN
Nippon Telegraph and Telephone Corp. (TO:9432), the largest Information & communication company by market cap in the Japan, has fallen JPY3.0 (0.1%) for a fifth consecutive day on Wednesday. This brought its five-day fall to JPY115.0 (2.1%), compared with the Nikkei 225 Index which rose 29.3 points (0.1%) in the five days for a relative price change of -2.3%. Cumulative volume in the 5 days was 0.6 times the average 5-day volume of 3.6 million shares. The stock last traded at JPY5,324.0.
NIPPON TELEGRAPH AND TELEPHONE ISSUED NEW PATENT IN THE WEEK OF JULY 25, 2017
Terminal device, annotation method, computer system, and computer program [9,715,396]
A terminal device, which can reduce a calculation amount for displaying an annotation text, an annotation method, a computer system, and a computer program. A plurality of annotation rules created for each window in which an annotation text is to be displayed are accumulated in an annotation DB, which of windows displayed on an operation screen is an active window is always monitored by a business screen state acquisition section, and when annotation display operation is performed by a user, an annotation display section obtains an annotation rule of an active window associated with the user's operation from the annotation DB and displays an annotation text included in the annotation rule on the operation screen.
NIPPON TELEGRAPH AND TELEPHONE BEARISH SIGNALS
+ Net profit margin has averaged 7.5% in the last 3 years. This is lower than the sector average of 7.8% and suggests a low margin of safety.
Downtrend: The stock dropped on high volatility today.
NIPPON TELEGRAPH AND TELEPHONE BULLISH SIGNALS
+ The relative yield of the stock, defined by its yield of 2.2%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 1.9% is 116.6%. This suggests the stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.5. Compared with the rest of the market the stock is undervalued.
+ Total Liabilities/EBITDA of 3.2 is comfortably below the Joseph Piotroski benchmark of 5.
+ Interest cover defined by EBIT/I is 41.5 times. This indicates it is less leveraged.
+ As per the Du Pont analysis, Return on Equity of 14.6% is better than sector average of 12.6%. This is computed as net profit margin of 9.3% times asset turnover [sales/assets] of 0.54 times leverage factor [total assets/shareholders' equity] of 2.3.
2.2 Undervaluation [compared with sector average]:
+ Price/Sales of 1 [1.4]. We estimate Nippon Telegraph and Telephone stock is trading at a current year Price/Sales of 1 and a forward year Price/Sales of 1.
+ Price to Book of 1.8 [4.3]. We estimate Nippon Telegraph and Telephone stock is trading at a current year Price to Book of 2 and a forward year Price to Book of 2.1.
+ Return on Equity 14.6% [12.6%].
+ Price to EBITDA of 3.7 [7.5].
+ The 3.2% discount to 12-month high of JPY5,500.0 against the 29.7% premium to 12-month low of JPY4,105.93 suggests the stock continues to push for new highs.
+ In the last three months the stock has hit a new 52-week high nine times, pointing to a significant uptrend.
+ The present value of JPY1,000 (PV1000) invested one year ago in Nippon Telegraph and Telephone is JPY1,131, comprising a capital gain of JPY103 and dividend reinvested of JPY28.
|Nikkei 225 Index||1,001||998||1,224|
+ The present value of JPY1,000 (PV1000) invested twenty years ago in Nippon Telegraph and Telephone is JPY1,395, including a capital gain of JPY235 and dividend reinvested of JPY160.
+ 20 years Multiplier in JPY = 1.395x
+ Compound Annual Growth Rate (CAGR) in JPY = 1.7%
Present Value of USD1,000 invested 20 years ago:
+ The present value of USD1,000 (PV1000) invested twenty years ago in Nippon Telegraph and Telephone is $US1,433, including a capital gain of $US269 and dividend reinvested of $US164.
+ 20 years ago USD 1 equalled JPY 116.2791
+ 20 years Multiplier in USD = 1.433x
+ Compound Annual Growth Rate (CAGR) in USD = 1.8%
Jul 26, 2017: USD 1 equals JPY 113.2
2.4 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||JPY11.4 billion (US$100.6 million)||In Top 1%|
|EBITDA Margin %||26.6||In Top 7%|
PRICE VOLUME DYNAMICS
+ Volume: there were 2,140,000 shares worth JPY11.4 billion (US$100.6 million) traded today. In the past week, volume was 0.6 times average and the shares were down 2.1%. The volume was 0.6 times the average daily trading volume of 3.6 million shares.
3.2 Moving Annual Return
|9432||Close (JPY)||Dividends (JPY)||Capital Gain %||% Yield||Annual Return %|
|1 Yr ago||4,825.33||110||8.7||2.5||11.1|
|2 Yrs ago||4,440.35||45||40.2||1.4||41.6|
|3 Yrs ago||3,166.61||40||29.6||1.6||31.2|
|4 Yrs ago||2,443.53||80||53.1||5||58.1|
3.3 Beta & Alpha:
+ Beta: the Beta of Nippon Telegraph and Telephone stock is 0.5. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
+ Alpha: the Alpha of the stock is 0.1. The actual return of 10.47% exceeded the expected return of 10.4%, reflecting outperformance.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 39.8% (or a turnover period of 2 years 6 months). This average length of ownership of the stock at 2.4 times the average holding period of 1 year 22 days for stocks in the Nikkei 225 Index suggests a larger number of core investors, making a long-term investment safer.
4.1 Global Rank [out of 47,593 stocks] and Rank in the Asia Region [out of 22,101 stocks]
|Description||Value||Global Rank||In Asia Region|
|Total Assets (US$)||187.7B||318||71|
|Net Profit (US$)||7.1B||107||28|
|Return on Equity %||14.6||7,617||3,798|
|Net Profit Margin %||9.3||11,654||5,872|
|Price to Book||1.8||18,098||9,903|
|PV$1000 (1Year) US$*||1,061||22,602||10,699|
|US$* Change (1Year) %||3.0||22,441||10,853|
* 1 year ago USD 1 = JPY 105.97
Jul 26, 2017: USD 1 equals JPY 113.2
4.2 Independent Ratings
Nippon Telegraph and Telephone Corp. is the 36th largest by revenue in the FT Global 500.
It is the 54th largest by revenue in the Forbes Global 2000.
It was ranked 99 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 12.9% in Waste productivity, 6.6% in Energy productivity and 4.9% in Carbon productivity.
It is placed 2706/3404 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 21.
NIPPON TELEGRAPH AND TELEPHONE FINANCIALS
5.1 Financials Summary
|Year ended||Mar 2017||Mar 2016||Mar 2015|
|Sales (USD B)||100.9||102.2||98.2|
|Pretax (USD B)||13.5||11.7||9.4|
|Net (USD B)||7.1||6.5||4.6|
5.2 Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-
Nippon Telegraph and Telephone Net Profit up 8.5%
+ Net profit up 8.5% from JPY737.7b ($US6.6b) to JPY800.1b ($US7.2b)
+ EBIT Margin up from 11.9% to 13.7%.
+ Interest cover up 26% from 32.9 to 41.5.
+ EBIT to total assets up from 6.5% to 7.4%.
+ Profit before tax to Sales up from 11.5% to 13.4%.
+ Retained earnings to total assets up from 24.1% to 26.5%.
+ Total Liabilities to EBITDA of 3.2 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 2.9% from the previous year's ratio of 3.1.
+ Total Liabilities to Operating Cash Flow of 3.3 compares favourably with the Joseph Piotroski benchmark of <4. This ratio has improved by 7.8% from the previous year's ratio of 3.6.
+ Sales and marketing expenses to Sales up from 24% to 24.5%.
+ Current ratio down 11% from 1.4 to 1.3.
+ Working capital to total assets down from 8.0% to 5.6%.
+ Total current assets to Total Assets down from 25.8% to 25%.
+ Total revenue steady at JPY11,416.8b ($US102.6b).
+ Total revenue to total assets steady at 0.5.
+ Cost of Goods Sold to Sales down from 48.7% to 48.5%.
+ Depreciation to Sales down from 15.3% to 12.8%.
+ Tax expenses to Sales up from 3.1% to 4.1%.
+ Debt to Equity steady at 0.5.
+ Total non-current assets to Total Assets up from 74.2% to 75%.
+ Fixed Assets to Total Assets up from 45.4% to 45.7%.
+ Current Debtors to Total Assets down from 15% to 14.9%.
+ Intangibles to Total Assets up from 13.5% to 14%.
5.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (JPY)|
|26 Jul 2017||120|
|26 Jul 2016||110|
|26 Jul 2015||45|
|26 Jul 2014||40|
|26 Jul 2013||80|
NIPPON TELEGRAPH AND TELEPHONE PROFILE
Nippon Telegraph and Telephone (NTT) is a Japan-based telecommunications provider offering fixed and mobile voice related services, Internet protocol (IP)/packet communications services and system integration services. The Company primarily operates in five business segments. The regional communications segment is engaged in the provision of domestic intra-prefectural communication services and incidental services. The long distance and international communications segment is engaged in the provision of domestic inter-prefectural and international communication services and incidental services. The mobile communications segment is engaged in the provision of mobile phones services and other related services. The data communications segment is engaged in the provision of system integration and network system services, among others. The others segment is engaged in the city development and financial businesses.
6.2 Industry & Sector
|Classification Level||Name of Sector|
|Economic Sector||Telecommunication Services|
|Business Sector||Telecommunications Services|
|Industry Group||Telecommunications Services|
6.3 Top Management
The chairman is Satoshi Miura.
6.4 Issued Capital
Based on 2,100,000,000 issued shares the market capitalisation is JPY11,180.4 billion (US$98.8 billion).
To view Recent Company Headlines, click here
June 28: Nippon Telegraph and Telephone: Corporate Governance Report
I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
June 02: Nippon Telegraph and Telephone announces AGM
Nippon Telegraph and Telephone has announced its Annual General Meeting will take place on Tuesday, June 27.
May 31: Nippon Telegraph and Telephone announces dividend
Nippon Telegraph and Telephone today announced a final dividend of JPY60.0 per share. The ex dividend date is Wednesday, March 29, 2017 and the record date is Friday, March 31, 2017 and it is payable on Wednesday, June 28.
May 01: Notice regarding NTT DOCOMO's Court Decision regarding its Stake in Tata Teleservices Limited
NTT DOCOMO, INC. ( "NTT DOCOMO" ), a subsidiary of Nippon Telegraph and Telephone Corporation, has announced today that NTT DOCOMO received on April 28, 2017 from the High Court of Delhi a court de cision declaring that the arbitration award rendered by the London Court of International Arbitration ("LCIA Award") regarding NTT DOCOMO's stake in Tata Teleservices Limited is enforceable in India.
April 17: NTT and Telkom Indonesia have launched the 'APAC Telecom Innovation Initiative (ATII)' to create new network services in the APAC region based on virtual infrastructure technologies.
Nippon Telegraph and Telephone Corporation (NTT), and PT Telkom Indonesia (Persero) Tbk (Telkom Indonesia) established the "APAC Telecom Innovation Initiative (ATII)" as a joint research and development initiative today with a view to create new network services in the APAC region with a look beyond 2020 focusing on virtual infrastructure technologies.
Contact: 81 35 20 55 58 1
Physical Address: 2-3-1 Ohtemachi Chiyoda-ku Tokyo, 100-0004 Japan
State/Province/Country: TKY, Japan
Country of Incorporation: Japan
Exchange: Tokyo Stock Exchange
TO:9432; TYO:9432; T:9432; JP:9432; 9432.T
Nippon Telegraph & Telephone Corp, Nippon Telegraph And Telephone Corp