Eye on Wonderful Sky Financial Group Holdings Ltd as a growth stock: its revenue grew 19.1% and EBITDA 18.9% annually over the last three years
20/06/2014 • About Wonderful Sky Financial Group Holdings Ltd (
$1260) • By InTwits
Wonderful Sky Financial Group Holdings Ltd is a growth stock in Commercial Services industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Wonderful Sky Financial Group Holdings Ltd showed growth in the last financial year. Wonderful Sky Financial Group Holdings Ltd's revenue surged on 33.5% in FY2014. In addition to revenue Wonderful Sky Financial Group Holdings Ltd also keeps delivering EBITDA growth. It was 27.6% in FY2014
In the longer period Wonderful Sky Financial Group Holdings Ltd showed fast revenue growth of 19.1% from FY2011 to FY2014 annualy. EBITDA surged on 18.9% from FY2011 to FY2014 annualy.
Wonderful Sky Financial Group Holdings Ltd ($1260) financials for the last 5 years
| mln. HKD | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 166 | 271 | 329 | 344 | 459 |
|---|
| Revenue growth, % | | 63.1% | 21.3% | 4.5% | 33.5% |
|---|
| Gross margin, % | 55.9% | 49.4% | 55.4% | 53.4% | 49.5% |
|---|
| SG&A, % | | | | 14.8% | 11.8% |
|---|
| EBITDA | 70 | 105 | 152 | 138 | 176 |
|---|
| EBITDA growth, % | | 50.8% | 44.8% | -9.0% | 27.6% |
|---|
| EBITDA margin, % | 41.8% | 38.7% | 46.2% | 40.2% | 38.5% |
|---|
| Net Income | 57 | 84 | 120 | 124 | 154 |
|---|
| Net Income margin, % | 34.4% | 30.9% | 36.6% | 36.0% | 33.5% |
|---|
| |
| CAPEX | 1 | 0 | 1 | 2 | 2 |
|---|
| CAPEX/Revenue, % | 0.733% | 0.0527% | 0.373% | 0.610% | 0.347% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 6 | 11 | 432 | 354 | 486 |
|---|
| Net Debt/EBITDA | -0.1x | -0.1x | -2.8x | -2.6x | -2.8x |
|---|
| |
| ROIC, % | 167.2% | 136.8% | 51.5% | 26.6% | 30.0% |
|---|
| ROE, % | 209.7% | 155.6% | 43.9% | 24.4% | 26.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period Wonderful Sky Financial Group Holdings Ltd showed small EBITDA margin decline of 0.200 pp from 38.7% in FY2011 to 38.5% in FY2014.
We call Wonderful Sky Financial Group Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 30.0%. During the last three years it dropped - it was 137% in FY2011. It's average ROIC for the last three years was 36.0%.
Net Income margin decreased on 2.50 pp from 36% to 33.5% in FY2014. In the last 3 years Net Income margin increased on 2.60 pp from 30.9% in FY2011 to 33.5% in FY2014.
Wonderful Sky Financial Group Holdings Ltd operates at ROE of 26.7%. It's average ROE for the last three years was 31.7%.
Capital expenditures (CAPEX)
Wonderful Sky Financial Group Holdings Ltd's CAPEX/Revenue was 0.347% in FY2014. CAPEX/Revenue surged on 0.294 pp from 0.0527% in FY2011 to 0.347% in FY2014. It's average level of CAPEX/Revenue for the last three years was 0.443%.
Leverage (Debt)
The company has negative net debt at -2.8x Net Debt/EBITDA - at the same time with high growth. In the longer period Wonderful Sky Financial Group Holdings Ltd showed fast leverage growth of 2.65x from -0.10x in FY2011 to -2.76x in FY2014.
Valuation vs. comparable companies
The market closed today at 3.6x EV/EBITDA for Wonderful Sky Financial Group Holdings Ltd which is 82.9% lower than 21.3x Commercial Services peer group avearge calculated on the basis of 74 companies. At the end of trading day today Wonderful Sky Financial Group Holdings Ltd traded at 7.3x P/E which is 80.4% lower than 37.3x Commercial Services peer group avearge calculated on the basis of 12 companies.
