To evaluate a company's finances, we need to go deeper into the...

To evaluate a company's finances, we need to go deeper into the notes of the company's accounts. These numbers mean much more than company's slogans or slick presentations. To appreciate TPG's relentless focus on managing its expenses, we just have to look at the following note.

There are things that are outside of TPG's controls, such as NBN pricing, ban on Huawei. But there are things that are well within its controls, such as employee expenses and corporate network costs. For these controllable items, TPG's achievements in this very difficult year is very commendable.

For Consumer business, TPG managed to decrease its employee expense by 8.6% whilst still maintaining top spot in ACCC's NBN ranking. Not only that, TPG & iiNet's NPS score both increased in FY2019.

For Corporate business, TPG managed a double feat of decreasing its Network Costs & Employee Expense while Revenue increased slightly. As a result, Corporate margin went up from an already high level of 44% to an even higher level of 48%.





Operating cashflow conversion was also excellent with Operating cashflow exceeding EBITDA. In a year when TPG had to pay $352m for the second installment of the 700MHz spectrum and $166m capex for both Australian and Singapore mobile network and almost $200m for BAU capex, TPG managed to increase its net debt by only $87m. Without this excellent operating cashflow generation, this feat is simply not achievable.



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In Singapore, TPG's subscriber number has reached almost 300,000. This is very encouraging, considering that indoor coverage has only started and MRT coverage hasn't even started.

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Now, we just need common sense to prevail in the next 3 weeks for TPG share price to recover.