Hello, everyone. So it's 10:00 A.M., our time. And we want to make this a, you know, presentations or this call, very flexible. If you guys want to go through a quick presentations, that we run through, like, in the morning, in the afternoon, like, you know, we can do that. We have William Yeung here, like, the expertise, especially on some of our new initiatives. But if you guys have questions, want to jump right into the questions, you're very welcome to do that. So, but please do let us know.
Hi, Neil.
Hey, how you doing?
Good, good. We're just saying that, we better go straight to the Q&A. No need to repeat the PowerPoints.
Unless you want to watch our presentation again, you know. Maybe you can, you can present for us, let's see how you, how you interpret, like, our message, and our initiatives.
So, so far, we have 10 people in the meeting. If no one is asking questions, then maybe I, I think I can sort of share with you, like, what we think. First, we think we are very solid in our core business. That is, the FTNS and also the technology service. That is, I mean, the service with revenue, including the recurring revenue from SI as well, together with the recurring income from FTNS. And, how I look at the market is that, basically, in the enterprise market, we only see one competitor, that is, Hong Kong T.
Because in many of the cases, when our salespeople or even myself, when I meet some corporate customers, eight or nine times out of 10 visits, we will see Hong Kong T as well. But maybe only four times out of 10 of customers that we met, we will see HGC. Basically, I think because we have a stronger and wider coverage, New World, HKBN, and also Wharf, three networks together, which is much bigger and comprehensive than HGC's. That I think that makes the main difference. That's why I will say, in the enterprise markets, we only have, like, 1.5 competitors: Hong Kong T being one, HGC being 0.5. And in the residential market, we only have one competitor, that is, HKT.
We will really treat the others like i-CABLE, CMHK, or HGC as irrelevant, because they never have the extensive residential coverage like us. You know, someone may ask, "Oh, CMHK is aggressively laying their fibers, so they will be a strong competitor." I will tell you that that is wrong because anyone can easily lay fiber horizontally under the ground, but no one can easily install the in-building bulk wiring of the fiber inside the trunks of commercial or residential buildings, because that is very difficult. Particularly, Hong Kong T and us, in the past two decades, when we built our network, we sort of jam-packed the spaces inside these trunks.
So it is very difficult for the third or fourth comers to lay the fiber inside the buildings. That's why if you look at the past two decades, you only see New World or Wharf leaving the competition. You didn't see any new competitors joining the fixed broadband network industry, because it's difficult for the last mile vertical wiring. That's why the fixed broadband industry, in fact, is really very fundamental and I would say comfortable cash cow for mainly two players in both residential and enterprise market. And the good trend is that both adding rationally for a price increase. When Hong Kong people is seeing price increase for everything, so it's also normal for us to increase price as well.
That's why we are upbeat in our core FTNS service revenue, EBITDA, and any cash flow coming from this. And in the enterprise market, we are also very successful in bundling the IT solutions together with FTNS. That's really executing our direction of ICT transcendence. That may take time, but if you look at the strong backlog, like HKD 4.7 billion on hand, as compared to HKD 1.8 billion six months revenue of years, then you will see where the momentum is going forward. So, I think that is my main sharing that we are quite upbeat.
Investors, can you guys tell us any concern, anything that make you wake up in the middle of the night? Please do highlight, and let's see if we can show you our thoughts as well. Neil, you're mute.
Comment. Yeah.
Yeah.
On mute. Can you hear me?
Yes, yes, okay.
Yeah. Yeah. So I don't want to take time from other people, but one thing I struggle with is the visibility, the enterprise revenue coming through. So each of the past few presentations, there's been a strong order book and an inflection in forward-looking orders. But still, the results in terms of revenue and profit and enterprise isn't coming through. And so can you tell us more about the timing of that? And I also understood that the Greater Bay Area previously was weak because it was slower opening after the COVID restrictions, but that should be a new area of business for you guys. And have you got any more color on that? I mean, that looked like a new market, so that should have been growing from very low levels with COVID era.
But I can't see that in the numbers either.
Okay. First, we'll talk about the enterprise. You are right. The conversion of the backlog, I mean, the booking number, converting them into the revenue or EBITDA, it is slower than expected. Reason is that the enterprise, no matter they are the private sector or even the government, they are sort of delaying their spend. All these spend, they are committed, but they are just deferring. Somebody will say, "I want to defer it till next quarter." Someone will even say, "We only want to do a smaller part of the committed projects, leaving others to, like, next financial year," something like that.
But, I will say, that is something deferred, but, will still appear, sooner or later. And, and for your information, that when we say backlog, the backlog in fact also includes the FTNS service. So that is very solid. You can notice that all of them are, two years contracts majority, and then, 70% margin. And, when I share with you about the IT·Simplified or AegisConnect, those are bundled to our FTNS service. Because, we ask people to use higher speed, and then for a Wi-Fi router with a security service, or we can help them to monitor their performance, like from our NOC network operating center, getting rid of their IT hiccups, something like that. So that is bundled with FTNS.
So this service never go away because it's already bundled with the, the core FTNS. So I will say, we just need more time to deliver. The second one on the GPA is that, put it this way. We do have, like, about 10 offices or 50% or 51% or 52% of our enterprise headcounts are located in China, in GPA area. But the business in the big cities, in fact, are not performing as good as expected. I mean, Beijing, Shanghai and Guangzhou. These areas, the orders are still more or less the same, but the margin are lower. Sort of companies in this area, they suffer quite a lot. However, we have a rising star.
You can imagine a small place, but contributing, like, huge increase in revenue and EBITDA. That is Macau. Macau, all the casinos, all the hotels, they spend a lot. And in Macau, we basically... I guess in Macau, being an SI, we should be the number one in Macau. And you can imagine that, some of the hospitality industry, like hotels or casinos, the owners, they invest the, the companies in Hong Kong. So they are also our customers in Hong Kong. And our vendors like Cisco or Microsoft, they like to partner with us to serve customers in Macau. So overall, our China's revenue and EBITDA are improving.
But a big contributor is from Macau and some other smaller GBA area that, as I mentioned this afternoon, that retail outlets in Hong Kong, their outlets here will also be shared, will be served by us. I can tell you a typical example. I can't name the customer, but the customer, they have a supermarket, fast food chain, and also the furniture outlet in Hong Kong. You can imagine that which one I'm referring. As far as that, we are catering from their security or storage or data center service. We also got the fiber broadband service to their 2,000 outlets across the whole Hong Kong.
Once this is okay, then, the next part will be serving their outlets in GBA area. But it will take time. Order is already secured on hand, but, need to do it, like, like, bit by bit. So, that is, my, my update to you on the, China or GBA area.
Thank you. Again, anyone just cut me off. But, so related to that, it sounds like it's a weak, corporate, sort of macro environment is resulting in slower growth. But, one thing I expected there is that HKT, 'cause it hasn't had much competition for a while, the prices are quite high. I thought that, HKBN would benefit 'cause you're coming in with really quite low prices. It's an opportunity for corporates to save costs, given that they're all under pressure. Is that happening? It sounds like that is also quite difficult.
Yes and no. Yes, for the small to medium companies, when these companies, the decision is the boss. But if we are going to the large enterprise, like the banks, with the CIOs, it is more difficult. Why? Because you can imagine that, for example, CIO for Hong Kong Bank, for them, the safest way is still staying with the incumbent, with Hong Kong T. Because many other banks are also using Hong Kong T. If Hong Kong T has something wrong, all the banks are suffering, like being hacked or network outage, something like this. But if they shift to HKBN, even at cheaper price, they think these savings won't compensate for any possible risk to them.
Not saying that we are not reliable, but if Hong Kong T has something wrong, then they have more people joining them to be suffered. That is the mindset of the CIO. Having said that, big banks, big companies like HKBN, like Hong Kong Bank or others, they will still need a backup provider. So I will say, we are getting more share from people shifting from HGC to us as the alternate service provider to big companies like the banks. There are some medium-sized banks that start to take us as the primary provider. Like some banks from Singapore, they're using us to replace HKT as the prime provider.
But I would say for this large enterprise, it's going to take much longer time. But medium-sized, I can call you the names like Optical 88, like the furniture chain Pricerite, like Pizza Hut, like McDonald's, like Maxim's, all these are our customers. We are their main provider.
Got it. Thank you. And then on the enterprise team, the senior sales hires, there was quite a bit of discussion. Has there been any churn in that team? Is it quite stable? Is it fully complete now you've made the hires you need, in William Ho's team?
Oh, for the, yes, previously. Yes, we have pre-sales, sales, and delivery, or what we call post-sales. For me, how I look at this is that the post-sales, who's going to deliver the backlog? This is a very stable team. And recently, when I say recently, just like early April, the pre-sales team was merged with the post-sales team. So, that means, we have people joining the sales to visit the customer together to demonstrate our strength, what solutions we have. When we go back, it's the same team, with their post-sales or delivery people here that attach with the account manager to serve the customers.
What I want to say is that the pre-sales team have already been merged into the post-sales team, so delivery of backlog will be very strong, very stable. We are, in fact, recruiting more people whose skill set is sort of mid to a higher tier. But for sales team, yes, honestly, there is in and out. We do have someone that we find their performance is no good, then we will proactively replace them. Someone, they will go back to their original employer because they, they sort of coming here as a department head, and but going back, they sort of taking a role, like a COO, even more senior, then that is, I would say, natural.
But having said that, for the large enterprise teams, we do have like six teams. So if one or two SI or IT sales heads they left us, we have another four or five remaining during the immediate relieving before we have a new head joining. So in short, I don't see any impact on our delivery of committed backlog orders, and also still upbeat on the sales with new orders, particularly as you have seen about the increasing ICT Solutions and also the unique 25 Gb speed that is not comparable by others. So salesman or salespeople, they are smart. Who's being stronger, who's having something unique, they go to you.
Thank you. Speaking of unique services, again, before there was the discussion of the, I think it was 2 Gb, guaranteed latency service. Can you share some details on that? What's the uptake? What's the response been like for that service on the residential side?
Okay. When we say guaranteed speed, it is like 80% of the speed that we offer to you. If your speed is lower than 80% of what we offer, then we sort of refund double the prorated monthly fee to you. Like, it's peanuts. One day we have, today you have some outage, then I give you refund two days' monthly fee to you. It's something like that. It has been here for like two decades. But the latency guarantee is something new that we launched last year. So far, I will say people are happy. Honestly, I don't have any data on hand to answer you.
But, obviously, people just notice that you are faster and latency is having something in control, then we trust you.
But thinking about the 25 gig service, how much demand is there even for 2 or 10 gigs? It seems more than people need.
Yeah, yeah. Yeah. Honestly, I think everyone in this call, including all the other friends here, I don't think anyone of us need 10 gig. But the... It's still talk about the perception and the experience of just what, like, one time or two time. When you put it this way, when you have a 10 gig, like, it's 10x the speed of 1 gig. So when you download or stream, you're talking about someone need 10 seconds, then you need just 1 second. So the 9 seconds impact is irrelevant to many users.
But the point is that if the price gap between, like, 10 gig and 2 gig is not too big, then why not pay for 10 gig to enjoy the super experience when you have something like 8K video or 3D video, 3D teleconference. In that area, you may like to use that. But as you saw in the [OFCA] data, two-thirds of Hong Kong people are using 1 gig or above. But I'm quite sure that 95% of them are actually using the speed that 100 Mb can support... It's the same psychology that will apply to 2.5 gig, 5 gig, 10 gig, or 25 gig.
Especially when we are talking about—by the way, when we say 25 gig, it is only offering up to 20 gig symmetric, because they are 25 download, 20 upload, so it is 20 symmetric. But my point is, you can imagine all the mobile operators, can any one of them afford not having 5G when the others are having 5G? And 5G has already been in the market for like five years, but still today, majority is still 4G for them. But for fixed network, it's different. It's different because when you get this 25 G or 20 G, 15 G, you're dedicated only to your home. So you're guaranteed with this speed. And nowadays, we have more users.
When the speed sort of divided once you connect to the Wi-Fi router, then the higher speed will make a difference. So 100 Mb or 100 Mb, sorry, 100 meg or 500 meg, it won't help if you have like Wi-Fi 7 router or two or three such routers within your home, your room, your living room, your study room, then it will make the difference.
In terms of pricing, you, you already offered 10 gig service. What, what's the-
No.
I know it's different-
10 gig, 10, 10 gig service is what HKT has already offered. But today, we are, we are offering 25 gig at the same price of their 10 gig. It is like 9.9, I forgot. Either HKD 9.98 or HKD 9.88, either one.
Okay.
It's monthly fee for 10 gig for Hong Kong T, and it is our 25 gig at HKBN.
Right. Yeah. Got it. Thank you. I don't want to take all the time, but I have more questions. Probably one for Derek on the IDD revenue. So is that gonna decline further from here? Is it gonna go to zero, or can it recover, can it stabilize? What's the outlook for the next half and in 2025 as well?
The decline is primarily related to the China regulations I spoke about today. But there are also demand, like, you know, in the other countries as well. So China is a very big populations, a lot of traffic in there, but we are also supporting, you know, some of the other region needs. For example, Philippines was like, you know, very good example in there as well. But again, you know, this is a... I would say this is a non-core businesses, and we will serve, you know, primarily the customers. And if there is a need for that one, like, you know, we will serve, but it's not a intentionally or strategically area that, like, you know, we want overly focused or we want to overly leverage in that area.
But in terms of, do you expect it to decline further in the second half? Is that, or Is it now flat? When, when did the regulations sort of kick in? Obviously, there's a structural decline, but there's also the impact of the regulations, so I'm just trying to work out what the impact is gonna be.
The regulations actually has been set, like, I believe, like 3-4 years ago. But-
Uh huh
In fact, they... Yeah, but they actually affected. You know, sometimes China, like, you know, pass a regulation and pass a law, but no one actually follow, and no one actually has done anything. They started to tighten up, I believe, it's the beginning of this year, put in places. So that slows a lot of the traffic down, like, into China. And when I look at it's, would probably... You know, if I look at overall the IDD businesses for us, it will be a slower than last year. It will be lower than last year. But some, and again, like some of these are actually by design, right? Because it's a business that, like, you know, we don't want to be overly emphasized.
So if I look at the full year outlook, it will be lower than last year. But again, this is actually very, you know-
Imagine.
Right. Right.
Where the-
It's a very margin, right.
Right. And can you give any color on what sort of percentage it is of sales, of enterprise sales? Is it low single digits or?
Yes, yes. You're talking about the IDD, right?
IDD, yeah.
Low, low single digit.
Right. Okay. Thank you. And can you give any comment on NiQ Lai resigning as CEO? Any additional comment on that?
You know him. You're his friend.
I do. I haven't had a chance to speak to him, yeah.
... Yeah. You know, we both know him for decades. NiQ always, like, likes to make certain decision. So, but, to me, I will say, in our operations, sort of seamless, because , they have like three months sabbatical leave before, and I can just step in and then take up the jobs immediately. NiQ and I have been working together for over 18 years, or co-found the new HKBN since the CVC in 2012 and then IPO in 2015. I will say, like, Neil, you can sense or smell that we two basically can relieve each other when the other is not in Hong Kong, like, for a long period or whatever.
Actually, it don't have any impact on our operations. In fact, I will say, in execution, I'm even faster. I just finished my full marathon in Japan. So you know, I run faster than NiQ, a lot.
I, I think I have one more question, and then I'm done, and it relates to the contract and the new contract and the renewal ARPU in residential. So this is a pretty big inflection, HKD 177-HKD 198 in the first half. So does that mean in the very near term, like the next six months, next twelve months, you've got a better outlook for growth in residential than, than enterprise? It sounds like enterprise is still pretty tough.
I'll put it this way, because our price increase has been for one year or two sections of 6 months. So, the first 6 months, the price increase is like the percentage of increase is high. Second one, we still increase, but not so high compared with the first 6 months. If the same trend of our price and the incumbents are more or less repeating what's happening in the past 12 months, then I will say, yes, you definitely will see solid growth, solid improvement in the service revenue and also the EBITDA of residential market. But what I say is that the price increase of Hong Kong's has been like sustainable for 12 months.
But we don't know what's going to happen in the next six or 12 months. For example, if people are not selling 48 or 78, they even selling it at 20 + 58, then maybe... Because for us, as I mentioned, we don't mind losing some low-end customers out from our network. But if Hong Kong T they think otherwise, they think they still need to maintain the market share, or they may, they will react with some lower price in, for example, in public housing estates. Then, if they drop price in our public housing estates, in order to react to the new low from business number three and , then we may need to react as well. That's something that I can't control.
But, as far as the outlook, I will say, for us, we will continue to increase price. Why? Because whenever we increase price, we are not just simply increase price for the same offer or service. We will add on something. You can imagine, for example, if I want to increase monthly fee of like HKD 20, in your broadband service, then it is HKD 20 × 24 months. It will be like HKD 480 over two years period, right? But then I can bundle a SIM card, with value of like HKD 300 for roaming service, outside Hong Kong. But this HKD 300, my cost may be just like HKD 60. So I will use these things to bundle and then increase price.
But for Hong Kong T, it's difficult because they are like different business units, P&L. Not easy to cross-subsidize. But for us, simple, one HKBN. So to share with you, like what Derek said, the residential parts, particularly in the EBITDA, I will say, well done, B+ .
Sorry, the EBITDA is?
Well done. I give you a grade of B+ .
B+ .
Well, you're a tough marker. Only B plus. I will go back and tell Alan on that one.
But , just to confirm, you said the EBITDA in residential, it's absolute EBITDA has grown quite well year-on-year. Is that right?
Yes.
Despite the revenue decline, because you lost-
Despite the drop of like 1,700 customers.
Right. 'Cause it's a better mix.
Yep.
Yes.
Yep.
Yes, you got it right. Yes. You know, it-
Yeah.
It's actually a very difficult concept for some of the people to understand. So your dollar could be, like, up a dollar, like, down a dollar. Your revenue could be a little bit higher or a little bit lower, but it really depends on the mix and the duration of the plan, and also the promo that, like, you know, we have been doing for the past, like, you know, 12 months or 14 months. So my team, working with the residential teams, like, a very thorough analysis, and they execute quite well. They execute quite well, and when we look at the EBITDA, the EBITDA are actually very, very stable. Not only very stable, has been delivering a very positive year-over-year growth.
But we don't usually disclose the data to, you know, to that level of detail, but I can share with you that it's a very strong, encouraging EBITDA year-over-year growth.
Neil, when you know, when I look at the business, like in the coming six months or even in the coming one or two years, I look at anything better or anything worse, right? When compared with the past six months or past two years, then I think fundamental difference is that we really have a much higher broadband speed at a competitive price level. That will help me reduce attrition rate, strengthen my acquisition power, and also give me the bullet to increase price. So that is... And this is to my core business. That is very important.
When I say core business or like upgrade the speed, in some of the cases, we even do not need to send technicians to like change the modem at their home. So it is really a scalable low or no OpEx case, simply price increase. And most of them. The other point of increasing EBITDA is lower cost. We will use less people from our Guangzhou telesales center because we have already started for a couple of months using AI WhatsApp to communicate with our customers. That is taking more popular and more impactful. And this like digital transformation will also apply to the inbound call center in residential area and also the enterprise area as well.
So the cost control is also important in helping our EBITDA.
Got it. Thank you. I realize I just have one more, which is on the co-ownership. That looks difficult-
Oh!
- the co-ownership type.
It, it-
Uh
... has already run its course.
Right. So do you, what do you do? Do you set up a new program?
No. Yes or no, at least I will say not in calendar year 2024. If there's something new, I will say it will be second half of financial year 2025.
Okay. Yeah. That's great. Thank you. No more from me.
You have been asking on behalf of many others.
Hi. Hi, can I jump in and ask a few questions?
Yep.
This is Norman from Value Partners.
Hi. Hi, Norman.
Hi. So, first about the macro. So, everybody knows that Hong Kong macro is not that great, so we are seeing news that shops are closing. Even, big, bigger supermarkets are also closing. So we are seeing you are dropping a few thousand lines, right,
Yep, correct
... in the past six months. So do you, do you see that stabilizing or still going on or even-
That is now stabilized. That means, that means the drop in... the drop in the second half should be smaller than the first half.
Yeah, but when we read from the news, right, so we are seeing actually increasing closure, right?
Increasing what?
Uh, closure.
Closure.
Business closure.
Oh, okay, okay, okay, okay. But, but for, for us, those who left are mainly, like, like trading company, like small printing company, like those company, they are selling souvenirs, or companies who are organizing, exhibitions or conventions. Those, those, like, like small one.
I see. Okay. Okay, good. Okay, second is about your 25 offering. So, do you understand what the role of Nokia is? Do we need to share revenue with them?
... Good point. It is not revenue sharing, but they do support us is a very good payment terms. Because when I talk to Nokia, I'm very simple. I will say, "Hey, we have like quite high gearing. We want to expand as much as possible or as fast as possible. Can we build out something win-win? If it is not revenue sharing, then it is like a significant defer of payment of the for us, it is a CapEx.
Otherwise, before I take the new customers—when I take new customers, I'm talking about new customers, monthly fee times 24, but maybe I need the first nine or 10 months revenue together to pay your equipment, something like this. So, they are making sure that in the payment of the equipment to them, basically, we won't have any burden on cash flow.
I see. Okay, got it. So, in your business study case of this offering, do you have a target subscriber number?
I said this afternoon, I don't, for the time being, because it's really very new. And Nokia is not... Honestly, Nokia is not as big as Huawei, particularly in Hong Kong. So it is a first time that we commit, like, huge resources, not only us, but both companies are seriously committing huge resources to work together. So I don't know if there's any hiccup in the delivery or the implementation. So I think when we launch in June, I need to take, like, three months period, like June, July, or August.
After taking customers in both enterprise, residential, hearing some customer feedback, and internally talking to our engineer who's rolling out the network, installing their equipment and see the feedback. So I would say, usually we will have a business case. But for this, because now we don't have any MOQ, we don't have any upfront cash flow burden, so we can have our business case after our Q4 financial year. That means after August, then we can ... We- By then, I can tell you.
Okay, good. A quick question on the enterprise side. So I'm interested to know, your backlog, HKD 4.7 billion, which is great. What's the margin inside this backlog?
Okay. Margin is like, there are mainly two types. One is the FTNS, like Fixed Telecom Network Service, which is in the margin range of 60%-70%. Okay? And then, the other area is the IT solutions. That will cover... That will be quite many. Storage, server, data center, cyber security, cloud, and then also the what we call selling the notebook or the computers. And then follow with the maintenance income of this notebook or computer. So the range of GP on these areas varies. Can be as low as single digits, like 8% or 9% on the selling the PC or the notebooks.
Can be as high as 45% on the maintenance service, because when we charge customers, sometimes we say we charge a lump, a HKD amount, and then we can provide, like, 3 or 2 visits or maintenance hours to you. But in many cases, customers usually don't need this service. So it is like receiving revenue without any cost, because we do not need to do the maintenance. So it's different. And for other SI services, the margin varies between, like, 20%-25%. So it is a mix of this.
But having said that, I will say, because we are now more disciplined on the GP, i.e., our focus is less on penetrating new accounts, but more on cultivating each account on hand. So the delivery or the EBITDA will be better than before.
I see. Okay, good to know.
But having said that, because we are more stringent on the GP in the coming orders, then the growth of the booking may be not as high as before. You understand what I mean?
Yes. Okay, got it. Okay, just a few questions on the numbers. So, notice that you control costs, so, and also the tenant number had dropped. So my question is, do you foresee still more cost cutting going forward, and what's the limit to that?
Yes, we will still have some more cost cutting, like, in the coming, maybe, three months. But I can't tell. When I say can't tell, because we will cut some non-revenue generating headcount, some more, particularly those senior one. But at the same time, we will also recruit more people to help us for the digital transformation, such that we can apply AI GPT or apply other digital tools to help us do our jobs in a more simple way or more efficient way. So, more headcounts on digital transformation, and more headcounts on sales, and also the people for the post sales, i.e. delivery.
We want more people to deliver such that we can turn faster the poor HKD 4.7 backlog into into revenue. So, yes, we will, we will, we will have a further headcount reduction, but also we, we increase, recruit some new headcounts. So net, net, headcount cost will further reduce, but won't be too significant, particularly for this financial year. Why? Our financial end at August, when you ask somebody to go, you need to pay them, like, one or three months salary, like notice, and you need to pay it up front now.
Mm-hmm.
So it won't help much on the number before August end.
Okay, but can we expect for the next six months, the total cost, operating cost, will still go down, right?
Will still what?
Go down. Decrease.
Of course. Oh, yes, yes, yes, yes. Yes, the headcount cost won't be up. It will be flat or slightly down.
I see. Got it. Okay. And then, yeah, a question on the AFF. Obviously, the biggest items impacting the AFF is two items, right? Number one is the high interest expense and the, working capital, right? So my question is, has the interest expense peaked? Because you have some hedging and financing, so it's difficult to figure out. So is the HKD 362 million already peak? And next one is, will the working capital number, change again in the next six months?
So it's, it's never easy to speculate the interest rate movement, right? So you know, it, you know, we all follow, and we all have, our own opinion in terms of what the U.S. Fed will do, how many cuts. So as you, as you're aware that, like, you know, half of our syndicate, basically half of our syndicate is a fixed rate, and then the other half is a floating rate. So, you know, it follows, it really follows like, you know, the market movement on the interest rate. So it's, you know, everyone have a different opinion whether the, the, you know, it peaks or it's coming down.
We do actually see, like for the past, I would say for the past couple of months, the floating rate of HIBOR actually has come down to a 4%, you know, currently sitting at 4% level, versus in, in some of the months, like, you know, back in November, back in November, it's sitting at the very all-time high, like at a 5.4%. So from that perspective, we are seeing a bit of bending down, bending down, and that helps a little bit in terms of the cash flow. And for the working capital, working capital always have a little bit of the seasonality and also on the timing. The working capital actually slightly decrease.
I mentioned it in our presentation today, because on the global demand on the handset actually decreases. This is primarily related to, you know, the iPhone, the iPhone 15. So, you know, it's a retail model, it's a retail model that actually help us to drive a lot of cash flow from operation very quick. Because we collect, you know, we get the cash, like, you know, immediately. And then, you know, we have a very good payment term in terms of with Apple. So that helps. So in the first half, you know, that actually not helping us because the, you know, global demand in the handset actually decreases.
But in terms of the second half, it's also a little bit of the seasonality in terms of how we are paying the, you know, the vendors, and how we're collecting, like, you know, the money receivable as well. So the working capital will improve. As always, has always been, usually in the second half will improve slightly. So we are projecting that, you know, probably the same trend, same pattern will happen.
Okay. Thank you. So yeah, my last question is, is there any guidance for the second half, the DPS, if you?
No, but as mentioned, now it's already end April. As operator, managing the huge space in enterprise and also residential customers, with the renewal of contracts like calling customers to sign contracts in advance, like five or six months in advance, today, we already know, like 90% sure of what's the number will be by end of August. So, my point is that, the second half financials, EBITDA or free cash flow, will definitely be better than first, better than first half. But how are we going to allocate, which portion is for dividend or which portion is for other purposes, then we will need to discuss at board level by end of second half. But operational-wise, it's very solid.
It will be a clear improvement.
Okay, good. That's all from me. Thank you.
Thank you, Norman. Any questions from the others?