The adjusted profit for the whole year of 2020 increased by 12% compared with the same period last year, which is in line with our expectation that Hong Kong Broadband announced its annual results as of August 31, 2020: revenue of HK $9.45 billion, an increase of 85% over the same period last year; net profit of HK $97.17 million, down 54.7% from the same period last year; adjusted net profit of HK $600 million, an increase of 12% over the same period last year, which is in line with our expectations.
Trend of development
With the collaborative advantage of merger, acquisition and construction, the enterprise continues to expand its ARPU. In the one year since the merger of WTT and the eight months since the acquisition of JOS, Hong Kong Broadband has benefited from the growth in the scale of its consolidated business. For public users, revenue from corporate solutions has increased by 103% to HK $4.71 billion compared with the same period last year. We believe that through mergers and acquisitions, the company can provide enterprise customers with comprehensive telecommunications and technology solutions in addition to telecommunications business, which is in line with the company's long-term development strategy. The company now offers comprehensive high value-added service solutions that can effectively help drive the digital transformation of enterprises. by the end of the reporting period, the number of corporate customers increased by 2% to 105000 year-on-year, and ARPU rose 69% to HK $2948. In addition, the corporate solution-related products contributed HK $1.81 billion, benefiting from the acquisition of JOS. Overall, corporate customers' annual income was HK $6.5 billion, a year-on-year increase of 1.8 times.
Under the epidemic, the market share and ARPU are still stable. 2C, the business income of residential solutions fell slightly by 1% to HK $2.45 billion compared with the same period last year, mainly due to the company's service fee reduction for low-income families during the epidemic; the broadband market share of residential solutions decreased slightly by 0.6 percentage points to 35.2% compared with the same period last year, mainly due to low-cost packages offered by competitors. Excluding the impact of fee deductions, residential ARPU rose 3 per cent year-on-year to HK $190. The company's resource exchange program (Barter & Bundle) aims to exchange discounted communication services for coupons or goods from 2B partners, and distribute these coupons and goods to 2C customers as a means of obtaining and staying guests. We believe that the plan will help the company to achieve resource exchange and business promotion with 2B enterprises, reduce costs and increase efficiency, and effectively improve the stickiness of 2C customers.
The full-year profit is lower than expected, but the long-term profitability is expected. Due to the continuous expansion of the company's business scale after the completion of the integration, the network, sales and other operating costs have increased in the short term, and the return net profit decreased by 54.7% to HK $97.17 million compared with the same period last year. We believe that the company's long-term earnings will maintain a steady growth level, mainly due to: 1) the scale effect of the enterprise will show after M & A, and the synergy effect will gradually release the long-term profitability; 2) the dividend per share will increase by 7% to HK $0.75 compared with the same period last year. Steady growth and signal of continued improvement in profitability 3) the company's joint stock ownership plan obtains the positive response and participation of senior executives and employees, which can bind employees to the interests of the company, stimulate employee momentum, and is expected to support profitability growth in the long run.
Profit forecast and valuation
The current share price corresponds to 8.5x FY2021 and 7.7x FY2022 EV/EBITDA. Maintain an outperform industry rating and target price of HK $16.80, corresponding to 12 times the EV/EBITDA for fiscal year 2020, which has 22.6% upside compared to the current share price.
Risk.
The development of the epidemic in Hong Kong is uncertain.