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HK Equities · Finance research note

HKEX 0638 - Fibocom Wireless Inc. - H Shares

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Evidence and analysis

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2. Company Fundamentals

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.) N/A
Risk / Std Dev (Ann.) N/A

Price Snapshot:

Metric Value
Last Price 12.020 HKD
Day Change -0.540 (-4.49%)

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue HK$6.99B HK$8.19B
Net income Reported net income HK$347.04M HK$667.96M
Total assets Year-end reported balance HK$9.69B HK$7.55B
Shareholders’ equity Year-end reported balance HK$6.26B HK$3.60B
Net margin Net income ÷ revenue 4.97% 8.16%
Asset turnover Revenue ÷ total assets 0.7212x 1.0848x
Equity multiplier Total assets ÷ shareholders’ equity 1.5479x 2.0944x
ROE Net margin × asset turnover × equity multiplier 5.54% 18.53%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue HK$6.99B
Prior annual revenue HK$8.19B
EBIT HK$402.17M
Tax rate 6.00%
NOPAT = EBIT × (1 − tax rate) HK$378.05M
Forecast start-growth basis -10.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT HK$378.05M
Add: depreciation & amortisation HK$141.46M
Less: capital expenditure -HK$217.92M
Less/(add): working-capital cash-flow movement -HK$210.39M
Current unlevered FCFF HK$91.20M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -10.00% HK$340.25M HK$127.31M -HK$196.13M -HK$189.35M HK$82.08M HK$79.33M
2 -6.88% HK$316.85M HK$118.56M -HK$166.63M -HK$176.33M HK$92.46M HK$83.49M
3 -3.75% HK$304.97M HK$114.12M -HK$144.96M -HK$169.72M HK$104.41M HK$88.08M
4 -0.63% HK$303.07M HK$113.40M -HK$128.73M -HK$168.66M HK$119.08M HK$93.84M
5 2.50% HK$310.64M HK$116.24M -HK$116.24M -HK$172.88M HK$137.77M HK$101.42M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.53
Cost of equity 7.61%
Pre-tax cost of debt 3.03%
WACC 7.04%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value HK$3.11B
Implied terminal EV / EBITDA 6.96x
Terminal value as % of enterprise value 83.22%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF HK$446.17M
Present value of terminal value HK$2.21B
Indicated enterprise value HK$2.66B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value HK$2.66B
Less: gross interest-bearing debt HK$964.02M
Add: cash and equivalents HK$3.74B
Add: affiliate investments HK$0.00
Less: minority interests HK$7.81M
Indicated common equity value HK$5.43B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 788,728,728.00
Share-count basis reported diluted weighted-average shares
Current market price HK$7.88
DCF indicative value per share HK$6.88
Indicative value vs. market price -12.69%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 16:30:31.365454 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Factor-model exception: No verified adjusted-close issuer series is available for factor regression. No Fama–French loading or alpha estimate is published on an incomplete basis.

Factor models are descriptive in-sample exposure diagnostics, not forecasts, investment recommendations, or estimates of future returns. This is research and analysis only, not personalized financial advice.

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