Financial Data and Key Metrics Changes - Revenue for the second quarter reached over NT$56 billion, marking a 4.8% year-over-year increase, driven mainly by the expansion of the ICT business and higher sales revenue [22][30] - Operating income and net income rose by 5.2% and 3.5% respectively compared to the same period last year, supported by growth in the Internet data center business and steady performance from subsidiaries [22][30] - Earnings per share increased from NT$1.27 to NT$1.31, reflecting consistent profitability and effective cost control, with EPS reaching the highest levels in nine years for the second quarter [22][30] - EBITDA increased by 3.5% year over year, reaching NT$22.58 billion, with an EBITDA margin of 39.8%, remaining broadly stable compared to last year [23][30] Business Line Data and Key Metrics Changes - Mobile service revenue grew approximately 2% year over year, with a mobile ARPU increase of 38% as more users upgraded to 5G [9] - Fixed broadband revenue increased by 1.8% year over year, driven by strategic bundle plans and symmetrical uplink/downlink speeds for services above 300 Mbps [10] - Enterprise ICT revenue increased by 27% year over year, with core service pillars like IDC, AIoT, and cloud showing robust growth of 40%, 75%, and 140% respectively [14] Market Data and Key Metrics Changes - Mobile market share rose to 40.7% as of June, achieving a new high, with the highest subscriber share among peers at 39.1% [8] - Southeast Asia market delivered double-digit revenue growth driven by demand for ICT services from high-tech companies [18] Company Strategy and Development Direction - The company continues to execute its "sea, land, and sky" strategy to enhance network resilience and seize future opportunities, including investments in undersea cables and satellite services [6][7] - The focus remains on innovation and operational excellence, with a commitment to governance and sustainability recognized by receiving the highest MSCI ESG rating of AAA [7] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum of core businesses and highlighted the importance of strategic investments in ICT and satellite services to support future growth [5][6] - The company remains cautious about global market sentiment amid ongoing uncertainties but continues to invest strategically for long-term growth [18] Other Important Information - The company received the 2025 Taiwan Data Center Service Competitive Strategy Leadership Award from Frost Sullivan, recognizing its AI-ready data center capabilities [7] - Total assets increased by 1.9% as of June 30, 2025, primarily driven by an increase in current monetary assets [25] Q&A Session Summary - No specific questions were recorded during the Q&A session, and the call concluded without further inquiries from participants [33][34]

Financial Data and Key Metrics Changes - Revenue for the second quarter of 2025 reached over NT$56 billion, marking a 4.8% year-over-year increase, driven mainly by the expansion of the ICT business and higher sales revenue [23] - Operating income and net income rose by 5.2% and 3.5% respectively compared to the same period last year, supported by growth in the Internet data center business and steady increases in mobile services [23] - Earnings per share (EPS) increased from NT$1.27 to NT$1.31, reflecting consistent profitability and effective cost control, with EPS reaching its highest levels in nine years for the second quarter [23][24] - EBITDA increased by 3.5% year over year, reaching NT$22.58 billion, with an EBITDA margin of 39.8%, remaining broadly stable compared to last year [24] Business Line Data and Key Metrics Changes - Mobile service revenue grew approximately 2% year over year, with a mobile market share rising to 40.7% as of June, and a 38.7% share in the 5G segment [10] - Fixed broadband revenue increased by 1.8% year over year, driven by strategic bundle plans, with fixed broadband ARPU rising approximately 2% [11] - Enterprise ICT revenue increased by 27% year over year, with core service pillars like IDC, AIoT, and cloud services delivering robust growth of 40% and 75% respectively [15] Market Data and Key Metrics Changes - Revenue from international subsidiaries declined by 41% year over year, primarily due to project-based fluctuations, but Southeast Asia market delivered double-digit revenue growth driven by demand for ICT services [18][19] - The mobile market share in Taiwan reached a new high, with the highest subscriber share among peers at 39.1% [9] Company Strategy and Development Direction - The company continues to execute its "sea, land, and sky" strategy to enhance network resilience and seize future opportunities, including investments in undersea cables and satellite services [6][7] - The company aims to promote strategic bundles to support ARPU growth and incentivize existing mobile subscribers to add fixed broadband services [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong commitment to innovation and operational excellence, highlighting the successful launch of new services and partnerships [5][6] - The management noted ongoing investments in strategic markets despite global market uncertainties, particularly targeting overseas AIDC-related construction projects [19] Other Important Information - The company received the highest MSCI ESG rating of AAA, reflecting strong performance in governance and data privacy [7] - The company was recognized as one of the top 5% of listed companies by the Taiwan Stock Exchange for its commitment to corporate governance [8] Q&A Session Summary Question: What are the expectations for future revenue growth in the ICT sector? - Management indicated that the ICT sector is expected to continue its strong growth trajectory, driven by demand from financial and high-tech sectors [15] Question: How is the company addressing the decline in international subsidiary revenue? - Management noted that while there was a decline, the performance exceeded internal expectations when excluding the higher base effect, and they are focusing on strategic investments in Southeast Asia [19]

Core Viewpoint - Chunghwa Telecom reported strong financial results for Q2 2025, exceeding guidance across key metrics, driven by growth in core telecom services and enterprise ICT business despite global economic uncertainties [2][5][8] Financial Highlights - Total revenues for Q2 2025 increased by 4.8% to NT$ 56.73 billion [3][5] - Operating income rose by 5.2% to NT$ 12.54 billion, with an operating margin of 22.1% [8] - Net income attributable to stockholders increased by 3.5% to NT$ 10.17 billion, with basic earnings per share (EPS) at NT$ 1.31 [5][8] Segment Performance - Consumer Business Group revenue increased by 1.4% year-over-year to NT$ 34.07 billion, driven by mobile and fixed broadband ARPU growth [4][5] - Enterprise Business Group revenue surged by 12.4% year-over-year to NT$ 18.98 billion, with ICT revenue up 37% year-over-year [5][6] - International Business Group revenue decreased by 16.8% to NT$ 2.20 billion, primarily due to reduced demand for international fixed voice services [5][6] Operating Costs and EBITDA - Total operating costs and expenses increased by 4.8% to NT$ 44.19 billion, attributed to higher manpower costs and growing ICT business [7] - EBITDA for Q2 2025 was NT$ 22.58 billion, reflecting a 3.5% year-over-year increase, with an EBITDA margin of 39.80% [9] Subscriber Metrics - As of June 30, 2025, mobile subscribers totaled 13.13 million, with mobile service revenue increasing by 2.0% to NT$ 17.06 billion [10] - Fixed broadband subscribers slightly increased by 0.7% to 4.44 million, with fixed broadband revenue growing 1.8% year-over-year to NT$ 11.59 billion [11]

Financial Performance Highlights - 2Q25 revenue reached NT$56.73 billion, a 4.8% increase year-over-year, marking a 10-year high for any second quarter since 2016[13, 48] - H1 2025 revenue reached NT$112.54 billion, a 3.2% increase year-over-year, marking a 9-year high for any first half since 2016[13, 48] - 2Q25 net income was NT$10.17 billion, a 3.5% increase year-over-year, marking an 8-year high for any second quarter since 2017[13, 48] - H1 2025 EPS was NT$2.57, a 3.9% increase year-over-year, marking an 8-year high for any first half since 2017[13, 48] - 2Q25 EBITDA reached NT$22.58 billion, a 3.5% increase year-over-year, marking a 12-year high for any second quarter since 2014[13, 48] - The company's operating results exceeded the high-end earnings guidance[13, 55] Business Segment Performance - Mobile service revenue increased by NT$0.33 billion, a 2.0% increase year-over-year[16] - Fixed broadband revenue increased by NT$0.20 billion, a 1.8% increase year-over-year[22] - ICT emerging business revenue increased by 24.9% year-over-year, with IDC growing by 30.1%[12] - Group enterprise ICT revenue increased by 27% year-over-year[29] Strategic Initiatives and Achievements - The company obtained an exclusive commercial license for OneWeb LEO satellite services[13] - The company was upgraded to the highest MSCI ESG 'AAA' Rating[13]

Core Insights - Chunghwa Telecom has been awarded the 2025 Taiwan Competitive Strategy Leadership Award in the data center services industry for its achievements in strategy development, infrastructure modernization, and customer-centric innovation [1][7] - The company focuses on delivering scalable, sustainable, and AI-ready data center solutions to meet the evolving demands of enterprise and hyperscaler clients in Taiwan [2][3] Strategic Focus - Chunghwa Telecom excels in aligning strategic initiatives with market demand and executing them consistently, demonstrating a strong focus on addressing emerging customer needs [3][4] - The company is guided by a long-term growth strategy centered on infrastructure innovation, customer alignment, and sustainability, positioning itself as a key enabler of Taiwan's digital economy [4][5] Infrastructure Development - Chunghwa Telecom is investing in advanced infrastructure, including high-density data centers and AI-specific service offerings, with the upcoming Taoyuan hyperscale facility designed to deliver 12 megawatts of IT load [4][5] - The Existing Building Retrofitting Project aims to convert legacy sites into AI-ready data centers, enhancing power, cooling, and structural capabilities, thereby expanding the company's total IT load capacity [6] AI Initiatives - As part of its AI 2.0 strategic initiative, Chunghwa Telecom is upgrading IDC facilities across Taiwan into AI-ready data centers and developing its own AI computing cloud platform [5][6] - The company plans to leverage its AI capabilities to promote industry domain-specific AI applications, enhancing its service offerings [5]

Core Insights - Investors are evaluating the value opportunities between Telefonica (TEF) and Chunghwa (CHT) in the Diversified Communication Services sector [1] Valuation Metrics - Telefonica has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Chunghwa has a Zacks Rank of 3 (Hold) [3] - TEF's forward P/E ratio is 12.20, significantly lower than CHT's forward P/E of 28.66, suggesting TEF is undervalued [5] - TEF has a PEG ratio of 0.71, while CHT's PEG ratio is 22.74, indicating TEF's expected earnings growth is more favorable [5] - TEF's P/B ratio is 1.11 compared to CHT's P/B of 2.72, further supporting TEF's valuation advantage [6] - Based on these metrics, TEF has a Value grade of A, while CHT has a Value grade of D, positioning TEF as the superior value option [6]

Core Viewpoint - Chunghwa Telecom reported strong financial performance in Q1 2025, with notable growth in EPS and net income, driven by robust operations and a leading market position despite macroeconomic challenges [2][4]. Financial Highlights - Total revenues for Q1 2025 increased by 1.6% to NT$ 55.81 billion [4][6]. - Operating income rose by 5.0% to NT$ 12.52 billion, with an operating margin of 22.4% compared to 21.7% in Q1 2024 [10]. - Net income attributable to stockholders increased by 4.3% to NT$ 9.80 billion, with basic EPS at NT$ 1.26 [10][6]. - EBITDA for Q1 2025 was NT$ 22.53 billion, up 3.2% year-over-year, with an EBITDA margin of 40.37% [11][10]. Business Segment Performance - Consumer Business Group revenue decreased by 0.2% to NT$ 34.57 billion, while mobile service revenue increased by 3.1% due to 5G migration and rising postpaid subscribers [5][6]. - Enterprise Business Group revenue grew by 2.3% to NT$ 17.34 billion, driven by an 11.6% increase in ICT revenue [6][8]. - International Business Group revenue increased by 0.9% to NT$ 2.44 billion, with a 1.6% rise in income before tax attributed to growth in overseas subsidiaries [8][6]. Operational Developments - The company expanded its market share in Taiwan's mobile market to 40.5%, with a subscriber share of 39.1% [2]. - The number of mobile subscribers as of March 31, 2025, was 13.11 million, reflecting a 0.9% year-over-year decrease [12]. - Fixed broadband revenue grew by 2.5% year-over-year to NT$ 11.46 billion, with ARPU increasing by 2.1% to NT$ 798 [13]. Strategic Initiatives - Chunghwa Telecom launched a strategic partnership with Astranis for a dedicated Micro GEO satellite and invested in the E2A trans-Pacific undersea cable [3]. - The company is actively pursuing growth opportunities in international markets, particularly in Singapore, Vietnam, and Thailand [2].

Financial Performance - Chunghwa Telecom Co., Ltd. reported consolidated financial performance for the year ended December 31, 2024, in accordance with International Financial Reporting Standards[5]. - The consolidated financial statements for the year ended December 31, 2023, were audited by other independent auditors who expressed an unmodified opinion[12]. - The Company’s financial position and results of operations are presented in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers[6]. - Revenues for 2024 reached NT$229,968,292, a 3.9% increase from NT$223,199,260 in 2023[28]. - Gross profit margin remained stable at 36%, with gross profit of NT$83,385,495 in 2024 compared to NT$81,432,542 in 2023[28]. - Net income for 2024 was NT$38,537,502, a slight increase of 1.4% from NT$37,990,536 in 2023[30]. - Total comprehensive income for 2024 was NT$40,617,994, compared to NT$38,659,749 in 2023, reflecting a growth of 5.1%[30]. - Basic earnings per share for 2024 were NT$4.80, up from NT$4.76 in 2023[30]. Assets and Liabilities - Total current assets for 2024 amount to NT$112,968.31 million, an increase from NT$103,203.56 million in 2023, representing an increase of 9.3%[26]. - Total non-current assets for 2024 are NT$66,283.20 million, a decrease from NT$69,000 million in 2023, reflecting a decline of 3.9%[26]. - The total liabilities for 2024 are NT$66,283.20 million, compared to NT$69,000 million in 2023, indicating a decrease of 3.9%[26]. - The company reported receivables from related parties of NT$19,300 million in 2024, compared to NT$78,089 million in 2023, a decrease of 75.7%[26]. - The company’s total current liabilities for 2024 are NT$66,283.20 million, a decrease from NT$69,000 million in 2023, indicating a decline of 3.9%[26]. Cash Flow and Investments - Cash generated from operations for 2024 was NT$88,517,195, up from NT$83,980,288 in 2023, reflecting a growth of 5.5%[32]. - Net cash provided by operating activities increased to NT$79,244,321 in 2024 from NT$74,559,793 in 2023, marking a rise of 6.3%[32]. - The company reported a net cash used in investing activities of NT$35,332,123 in 2024, a decrease from NT$50,174,013 in 2023, indicating improved cash flow management[34]. - The company acquired a 10-year unsecured cumulative subordinated corporate bond of Fubon Life Insurance Co., Ltd. for $2,000,000 thousand in October 2024[163]. Ownership and Subsidiaries - The company maintains a 100% ownership in subsidiaries such as Light Era Development Co., Ltd. and Chunghwa Telecom Singapore Pte., Ltd.[49]. - Chunghwa Telecom's ownership in Chunghwa Leading Photonics Tech Co., Ltd. decreased from 75% in 2023 to 70% in 2024[49]. - The company has expanded its international presence with 100% ownership in Chunghwa Telecom Europe GmbH, established in 2024[51]. - Chunghwa Telecom's subsidiaries include a mix of telecommunications services and technology solutions, indicating a diversified business model[49]. Audit and Compliance - Management is responsible for the preparation and fair presentation of the consolidated financial statements, ensuring they are free from material misstatement[14]. - The audit included evaluating the effectiveness of internal controls related to revenue recognition on mobile services, including testing automated and manual controls[15]. - The auditors communicated significant audit findings and deficiencies in internal control to those charged with governance[20]. - The Company must assess its ability to continue as a going concern and disclose any relevant matters[16]. Revenue Recognition and Financial Instruments - Revenue from product sales is recognized when products are delivered and accepted by customers, with specific recognition criteria for different service types[112][113]. - Financial assets at fair value through profit or loss decreased to NT$29,004 million in 2024 from NT$90,400 million in 2023, indicating a significant decline of 67.9%[26]. - The Company recognizes lifetime Expected Credit Loss (ECL) for accounts receivable and contract assets, reflecting potential credit risks[98]. - The cumulative gain or loss from investments in equity instruments at FVOCI is transferred to retained earnings upon disposal[95]. Expenses and Profitability - Operating expenses increased to NT$36,634,212, representing 16% of revenues, up from 15% in the previous year[28]. - Non-operating income increased to NT$880,653 in 2024, compared to NT$639,411 in 2023[28]. - Marketing expenses rose to NT$25,103,662, accounting for 11% of total revenues, compared to 10% in 2023[28]. - Research and development expenses increased to NT$4,167,200, maintaining 2% of total revenues[28]. Equity and Shareholder Information - The company reported a total equity of NT$398,104,856 as of the end of 2024[30]. - The total equity attributable to stockholders of the parent as of December 31, 2024, was NT$384,950,690, up from NT$382,308,088 in 2023, reflecting a growth of 0.7%[31]. - Cash dividends paid in 2024 amounted to NT$36,909,931, slightly higher than NT$36,475,514 in 2023, showing an increase of 1.2%[34].

Group 1 - Chunghwa Telecom filed its 2024 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission, which is available online [1] - The company is Taiwan's largest integrated telecommunications services provider, offering mobile services, fixed-line services, and ICT business [2] - Chunghwa Telecom is expanding into innovative technology services and has been recognized for its ESG practices with various awards [2] Group 2 - The company provides information and communication technology services to corporate customers, leveraging big data, information security, cloud computing, and IDC capabilities [2] - Hard copies of the complete audited financial statements can be requested free of charge by contacting the company [1]

Regulatory Changes - The NCC announced a reduction in the "monthly rental fee of broadband network circuit" by "3.32% minus annual growth rate of the Consumer Price Index (CPI)" effective from April 1, 2024[18]. - The upper limits on the termination rate for voice service over mobile networks will decrease from NT$0.407 to NT$0.330 per minute from 2025 to 2028, representing an aggregate decrease of about 19%[19]. - The company is subject to extensive regulation under the ROC Telecommunications Management Act, which may limit its flexibility to respond to market conditions[17]. - The company may face administrative penalties if it fails to comply with the cybersecurity requirements set forth by the Cyber Security Management Act[29]. - The government of the ROC has established the National Financial Stabilization Fund to support the securities market, which may affect the market price of the company's shares[68]. - The company may be sanctioned for violations of foreign ownership limits, which could adversely affect its ability to obtain financing[69]. Financial Performance - In 2024, Chunghwa Telecom reported revenues of NT$230.0 billion (US$7.0 billion) and a consolidated net income of NT$38.5 billion (US$1.2 billion), with basic earnings per share of NT$4.79 (US$0.15)[87]. - Capital expenditures for 2024 totaled NT$28.8 billion (US$0.9 billion)[88]. - The company has recognized an impairment loss reversal of NT$139.2 million (US$4.2 million) for investment properties in 2024, indicating a recovery in asset value[42]. - The company's financial results under Taiwan IFRSs may differ materially from those reported under IFRSs for SEC filings[65]. - The company faces risks from potential health concerns related to mobile handsets and base stations, which could reduce customer usage and impact revenue[49]. - The company is subject to various legal proceedings that could expose it to substantial liabilities, potentially affecting its financial condition[57]. Market Dynamics - The telecommunications industry in Taiwan has seen a decrease in mobile network operators from five to three following a merger in December 2023, increasing market concentration[23]. - The company faces intensified low-price strategies from cable operators, with bundled prices being about 10% to 20% lower than its offerings[25]. - The company is focusing on promoting high-quality 5G services to increase mobile service revenues, but faces competition from aggressive pricing strategies by other operators[24]. - The overall mobile services market in Taiwan experienced a revenue increase of 1.9% in 2024, driven by steady 5G migration and recovery of roaming services[135]. Technological Investments - Significant capital expenditures are planned to upgrade telecommunications technologies and services, particularly in response to the high-bandwidth requirements of digital convergence services[38]. - The company aims to expand its ICT services and has initiated the construction of data centers and cloud services in collaboration with major public cloud providers[97]. - The company is expanding its IDC business by building AIDCs to meet the growing demand for AI applications, indicating a strategic focus on emerging technologies[163]. - The company has invested in 31 submarine cables, with a total invested capacity exceeding 29 Tbps as of December 31, 2024[200]. Customer and Market Share - As of December 31, 2024, the company had approximately 1.1 million mobile customers, holding a market share of approximately 38.0% in total mobile customers and 40.4% in mobile service revenues in Taiwan[127]. - The company maintained a local telephone service market share of approximately 91.4% from 2022 to 2024, although revenues from local telephone services decreased from 10.5% of total revenues in 2022 to 8.7% in 2024[148]. - The company has a 70% market share in IDC services in Taiwan, reinforcing its position as the largest IDC services provider[121]. - The company holds over 70% market share in the IDC business in Taiwan, positioning itself as the leading IDC service provider[186]. Environmental Initiatives - The Climate Change Response Act aims for net-zero emissions by 2050, with potential regulatory fees starting in 2025 for industries exceeding 25,000 tonnes of CO2e emissions[33]. - The company aims for a 50% reduction in scope 1 and 2 carbon emissions by 2030 compared to 2020 levels and plans to use 100% renewable energy for its data centers by 2030 and for the entire company by 2040[35]. Operational Challenges - Interruptions in electricity or water supply could significantly harm the company's operations and financial condition[58][59]. - The company must attract and retain skilled personnel to maintain its competitive edge, with increasing demands for qualified talent in the telecommunications industry[60]. - The company's principal executive offices and substantially all assets are located in Taiwan, with nearly all revenues derived from operations in Taiwan, making it vulnerable to political risks and changes in ROC governmental policies[61]. Strategic Developments - The company has established an AI 2.0 Corporate Strategy Committee to build AI governance principles, although the effectiveness of these measures against cyber threats is uncertain[28]. - The establishment of Chunghwa Telecom Europe GmbH in Germany in July 2024 aims to expand business opportunities in the European market[116]. - An investment of US$30 million in Taiwania Hive Technology Fund L.P. was approved in February 2024 to capitalize on digital transformation trends in Southeast Asia[115]. - The company plans to explore opportunities in equity investments and strategic acquisitions to enhance core competitiveness in AI, 5G, and cybersecurity sectors[117]. Subscriber Growth - Total internet subscribers in Taiwan increased from 6,897,000 in 2022 to 7,097,000 in 2023, and is projected to reach 7,398,000 in 2024, representing a growth of approximately 2.9% year-over-year[146]. - HiNet FTTx subscribers grew from 3,479,000 in 2022 to 3,526,000 in 2023, with a forecast of 3,591,000 in 2024, indicating a steady increase[146]. - The number of home Wi-Fi devices rented increased by 36.8% year-over-year, indicating strong demand for Wi-Fi services[146].