Chunghwa Telecom's 2024 Success: A Recipe for Future Growth

Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company") today reported its un-audited operating results for the fourth quarter of 2024, marking a year of impressive growth and achievements. All figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("T-IFRSs") on a consolidated basis.

Fourth Quarter 2024 Financial Highlights
Total revenue increased by 5.6% to NT$ 65.35 billion.
Consumer Business Group revenue increased by 2.2% to NT$ 37.33 billion.
Enterprise Business Group revenue increased by 10.2% to NT$ 23.96 billion.
International Business Group revenue decreased by 2.3% to NT$ 2.50 billion.
Total operating costs and expenses increased by 6.0% to NT$ 53.83 billion.
Operating income increased by 11.5% to NT$ 11.65 billion.
EBITDA increased by 5.9% to NT$ 21.59 billion.
Net income attributable to stockholders of the parent increased by 9.0% to NT$ 9.00 billion.
Basic earnings per share (EPS) was NT$1.16.
Revenue, operating income, income before tax, and EPS are all in line with our guidance.

Full Year 2024 Financial Highlights
Total revenue increased by 3.1% to NT$230.03 billion.
Consumer Business Group revenue increased by 2.1% to NT$ 139.98 billion.
Enterprise Business Group revenue increased by 3.3% to NT$ 75.40 billion.
International Business Group revenue increased by 8.0% to NT$ 9.92 billion.
Total operating costs and expenses increased by 4.0% to NT$ 183.27 billion.
Operating income increased by 1.1% to NT$ 46.88 billion.
EBITDA increased by 0.6% to NT$ 86.50 billion.
Net income attributable to stockholders of the parent increased by 0.8% to NT$ 37.21 billion.
Basic earnings per share (EPS) was NT$4.80.
Operating income, income before tax, and EPS all exceeded the high-end target of our full-year guidance.

Chunghwa Telecom's strategic focus on stable and healthy growth across all business segments has contributed to its leading position in Taiwan's mobile market and its ability to achieve a seven-year high in full-year revenue. The company's precise strategic focus has enabled it to maintain its leading position in the mobile market with a 40.3% revenue share and a 37.9% subscriber share. This is evident in the company's 5G postpaid subscription growth, which has contributed to mobile monthly fee uplift and resulted in a 38.8% 5G subscriber market share in Taiwan. Additionally, the company's successful cross-tier upgrade promotion for fixed broadband services has led to doubled 1 Gbps subscriber net-adds, with over 70% of promotion adopters choosing 300 Mbps and above, including the 1Gbps service offering. This strategic focus has also resulted in a robust 24.1% year-over-year growth in ICT business revenue for the Enterprise Business Group, mainly contributed by the growth in IDC, cloud, and cybersecurity revenue. Furthermore, the company's innovative achievement in developing Taiwan's first 5G unmanned vehicle solution for smart harbor inspections has demonstrated its commitment to technological innovation and leadership in the market. These strategic initiatives have collectively contributed to Chunghwa Telecom's ability to achieve a seven-year high in full-year revenue.

The robust growth in the Enterprise Business Group's ICT business revenue, particularly in IDC, cloud, and cybersecurity, can be attributed to several key drivers:

1. Growth in IDC (Information and Data Center) revenue (62% year-over-year): This significant increase can be attributed to the rising demand for data storage and processing services from enterprises. As businesses continue to digitalize and generate more data, they require robust and secure data centers to store and manage this information. Chunghwa Telecom's investment in and expansion of its data center infrastructure has enabled it to meet this growing demand, contributing to its overall profitability.
2. Increase in cloud revenue (46% year-over-year): The growth in cloud services is driven by the increasing adoption of cloud-based solutions by enterprises. These services allow businesses to access scalable and flexible computing resources, enabling them to optimize their IT infrastructure and reduce costs. By offering cloud services, Chunghwa Telecom can generate recurring revenue streams and enhance its profitability.
3. Growth in cybersecurity revenue (56% year-over-year): The surge in cybersecurity revenue is a result of the escalating threat landscape and the increasing awareness among enterprises about the importance of protecting their digital assets. Chunghwa Telecom's investment in advanced cybersecurity technologies and services has positioned it well to capitalize on this growing market demand. By providing comprehensive cybersecurity solutions, the company can help enterprises safeguard their data and networks, further contributing to its overall profitability.

Chunghwa Telecom's successful cross-tier upgrade promotion for fixed broadband services has significantly impacted its market share and subscriber base, as well as its future growth prospects in this segment. The promotion resulted in doubled 1 Gbps subscriber net-adds, indicating a significant increase in high-speed internet subscribers. Over 70% of the promotion adopters chose 300 Mbps and above, including the 1 Gbps service offering, demonstrating a strong demand for high-speed internet services. This growth in high-speed internet subscribers has likely contributed to Chunghwa Telecom's leading position in Taiwan's mobile market, with a 40.3% revenue share and a 37.9% subscriber share. The success of the cross-tier upgrade promotion suggests that there is a strong demand for high-speed internet services in Taiwan, which bodes well for Chunghwa Telecom's future growth in the fixed broadband segment. As more consumers and businesses adopt high-speed internet services, Chunghwa Telecom can expect to see increased revenue and profit from this segment. Additionally, the company's ability to offer innovative and attractive services, such as ultra-low-latency immersive video programs via IOWN APN, can further drive demand for its fixed broadband services and help maintain its competitive edge in the market.

In conclusion, Chunghwa Telecom's 2024 success story is a testament to its strategic focus on stable and healthy growth across all business segments. The company's ability to maintain its leading position in Taiwan's mobile market, achieve a seven-year high in full-year revenue, and drive robust growth in its Enterprise Business Group's ICT business revenue demonstrates its commitment to innovation, technological leadership, and customer satisfaction. As Chunghwa Telecom continues to invest in its infrastructure, expand its service offerings, and adapt to the evolving market landscape, it is well-positioned to maintain its competitive edge and deliver future growth for its shareholders.