Xunlei Ltd (XNET) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001510593

P/B 0.27

P/E 0.34

P/S 1.06

Market Cap 425.80 Mn

ROIC (Qtr) -1.33

Div Yield % 0.00

Rev 1y % (Qtr) 57.73

Total Debt (Qtr) 70.54 Mn

Debt/Equity (Qtr) 0.04

About

Xunlei Ltd, also known as Xunlei Network Technology Co., Ltd, is a prominent player in the Chinese technology industry, with its ticker symbol being XNET. The company is renowned for its provision of distributed cloud services, which it delivers through a robust internet platform based on cloud technology. This platform enables users to swiftly access, manage, and consume digital media content on the internet. Xunlei's primary business activities encompass cloud acceleration, shared cloud computing, digital entertainment, and blockchain technology....

Xunlei Ltd, also known as Xunlei Network Technology Co., Ltd, is a prominent player in the Chinese technology industry, with its ticker symbol being XNET. The company is renowned for its provision of distributed cloud services, which it delivers through a robust internet platform based on cloud technology. This platform enables users to swiftly access, manage, and consume digital media content on the internet.

Xunlei's primary business activities encompass cloud acceleration, shared cloud computing, digital entertainment, and blockchain technology. The company generates revenue through various services, including subscription services, cloud computing services and products, live streaming, and other value-added services.

One of the company's key offerings is its cloud acceleration service, which is provided through its core product, Xunlei Accelerator. This product allows users to accelerate digital transmission over the internet, free of charge. Additionally, the company offers a mobile acceleration plug-in that provides similar benefits to mobile device users.

In the realm of shared cloud computing, Xunlei provides services through its OneThing Cloud product. This product crowdsources idle uplink capacity from internet users who have purchased and connected their OneThing Cloud devices to their network router. The company also offers a decentralized cloud computing platform, StellarCloud, which integrates shared economy and blockchain technology with cloud computing technology.

Xunlei's digital entertainment services include live streaming and other value-added services such as online advertising and online gaming. The company's live streaming services encompass video and audio live streaming, both domestically and internationally.

In terms of blockchain technology, Xunlei launched its first blockchain infrastructure product, ThunderChain, in May 2018. ThunderChain is an open platform that enables users to develop and manage blockchain applications. The company also introduced a blockchain-based enterprise digital collection service platform in February 2022, designed to help enterprises and organizations achieve on-chain for their digital assets.

Xunlei's position within the industry is robust, boasting a large user base and a diverse range of products and services. The company's key competitors include other cloud acceleration and shared cloud computing service providers, as well as other technology companies offering similar products and services.

Xunlei's customers span various sectors, including internet content providers, online game companies, and other businesses requiring cloud computing and acceleration services. Additionally, the company caters to individual users who utilize its cloud acceleration and shared cloud computing services.

The company's competitive advantages stem from its strong brand reputation and large user base, providing it with a competitive edge in the market. Furthermore, Xunlei's proprietary technologies, such as stellar scheduling, weak network acceleration, and network dynamic defense, contribute to its competitive advantage.

In terms of intellectual property, Xunlei relies on a combination of patent, copyright, trademark, trade secret, and other intellectual property-related laws in the PRC, as well as contractual restrictions, to establish and protect its intellectual property rights. The company vigorously protects its Xunlei brand and the brands of its other services.

Xunlei's marketing strategy prioritizes improving its services and enhancing its user experience, coupled with investing in various marketing activities to further promote its brand awareness among existing and potential users and other customers. The company mandates its third-party content providers to provide content they are duly authorized to provide and that does not infringe on the intellectual property rights of other parties.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 129.69M provide 4.48x coverage of short-term debt 28.94M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 1.76B provides 24.91x coverage of total debt 70.54M, indicating robust asset backing and low credit risk.
Tangible assets of 1.76B provide exceptional 38.39x coverage of deferred revenue 45.77M, showing strong service capability backing.
Short-term investments of 154.51M provide solid 1.37x coverage of other current liabilities 112.85M, indicating strong liquidity.
Long-term investments of 1.30B provide solid 31.22x coverage of long-term debt 41.60M, indicating strategic financial planning.

Cons

Investment activities of 0 provide weak support for R&D spending of 76.88M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
High receivables of 84.47M relative to inventory of 872000 (96.86 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 45.77M, which is 0x, raising concerns about future service delivery capabilities.
Long-term investments of 1.30B represent a high 23.12x of fixed assets 56.19M, indicating potential overexposure to financial assets versus operational capabilities.
Operating cash flow of 0 provides minimal -0x coverage of tax expenses of (10.28M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.18	2.56
EV to Cash from Ops.	10.50	38.32
EV to Debt	4.61	-11.37
EV to EBIT	0.26	-12.79
EV to EBITDA	-37.06	7.72
EV to Free Cash Flow [EV/FCF]	14.10	24.22
EV to Market Cap	0.76	0.58
EV to Revenue	0.81	-35.00
Price to Book Value [P/B]	0.27	3.74
Price to Earnings [P/E]	0.34	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	997.82	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	0.00	-404.11
Cash and Equivalents Growth (1y) %	-3.19	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	8,163.76	31.15
EBITDA Growth (1y) %	0.00	49.02
EBIT Growth (1y) %	5,954.21	25.85
EBT Growth (1y) %	6,218.42	17.82
EPS Growth (1y) %	8,750.66	70.69
FCF Growth (1y) %	0.00	295.45
Gross Profit Growth (1y) %	21.56	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.22	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.72	1.21
Current Ratio	2.02	2.57
Debt to Equity Ratio	0.04	-0.93
Interest Cover Ratio	997.82	-13.15
Times Interest Earned	997.82	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	0.00	-544.82
EBIT Margin %	313.06	-197.78
EBT Margin %	312.75	-602.74
Gross Margin %	49.60	52.06
Net Profit Margin %	315.30	-605.52

Xunlei Ltd (NASDAQ: XNET)