The numbers tell that HC International Inc is a solid growth stock
06/04/2015 • About HC International Inc (
$2280) • By InTwits
HC International Inc is a fast-growing stock in Commercial Services industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
HC International Inc showed fast growth in the last financial year. HC International Inc's revenue surged on 15.4% in FY2014. The growth also happened in EBITDA of 16.5% for the same period.
In the longer period HC International Inc showed fast revenue growth of 30.2% from 2011 to 2014 annualy. EBITDA surged on 58.7% from 2011 to 2014 annualy.
HC International Inc ($2280) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 318 | 438 | 549 | 838 | 967 |
|---|
| Revenue growth, % | | 38.0% | 25.1% | 52.7% | 15.4% |
|---|
| Gross margin, % | 80.0% | 84.7% | 87.5% | 91.9% | 92.5% |
|---|
| SG&A, % | 75.9% | 73.0% | 72.0% | 69.1% | 70.2% |
|---|
| EBITDA | 17 | 57 | 88 | 194 | 226 |
|---|
| EBITDA growth, % | | 235.2% | 56.3% | 119.4% | 16.5% |
|---|
| EBITDA margin, % | 5.31% | 12.9% | 16.1% | 23.1% | 23.4% |
|---|
| Net Income | 7 | 41 | 67 | 153 | 188 |
|---|
| Net Income margin, % | 2.18% | 9.40% | 12.2% | 18.3% | 19.4% |
|---|
| |
| CAPEX | 78 | 66 | 47 | 240 | 239 |
|---|
| CAPEX/Revenue, % | 24.5% | 15.1% | 8.55% | 28.7% | 24.7% |
|---|
| Debt | 0 | 0 | 4 | 116 | 696 |
|---|
| Cash | 188 | 255 | 423 | 1,025 | 1,322 |
|---|
| Net Debt/EBITDA | -11.2x | -4.5x | -4.7x | -4.7x | -2.8x |
|---|
| |
| ROIC, % | 0.1% | 16.0% | 17.6% | 20.8% | 12.0% |
|---|
| ROE, % | 3.5% | 18.2% | 21.6% | 24.7% | 18.2% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. EBITDA margin increased slightly on 0.300 pp from 23.1% to 23.4% in 2014. If we look for the longer period HC International Inc's EBITDA margin surged on 10.5 pp from 12.9% in 2011 to 23.4% in 2014.
HC International Inc shows attractive ROIC at 12.0% for the last 12 months which assumes stable development model. Three years ago it was a bit higher at 16.0%. It's average ROIC for the last three years was 16.8%.
The company's Net Income margin increased on 1.10 pp from 18.3% to 19.4% in 2014. In the last 3 years HC International Inc showed fast Net Income margin growth of 10 pp from 9.40% in 2011 to 19.4% in 2014.
HC International Inc operates at ROE of 18.2%. Average ROE for the last three years was 21.5%.
Capital expenditures (CAPEX)
To fuel this fast growth HC International Inc had to invest in CAPEX.HC International Inc's CAPEX/Revenue was 24.7% in FY2014. The company's CAPEX/Revenue surged on 9.65 pp from 15.1% in 2011 to 24.7% in 2014. It's average level of CAPEX/Revenue for the last three years was 20.7%.
Leverage (Debt)
Having such a fast growth profile HC International Inc keeps negative net debt at -2.8x Net Debt/EBITDA. In the last 3 years HC International Inc's leverage surged on 1.74x from -4.51x in 2011 to -2.77x in 2014.
Peers in Commercial Services
Below you can find HC International Inc benchmarking vs. other companies in Commercial Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Global Energy Resources International Group Ltd ($8192) | | 429.3% | -61.9% | -27.8% | 2,912.9% |
| Dingyi Group Investment Ltd ($508) | | -72.6% | 8.8% | -95.9% | 1,361.2% |
| China Smartpay Group Holdings Ltd ($8325) | | 13.1% | 60.0% | 274.7% | 75.6% |
| Goldpac Group Ltd ($3315) | | 24.4% | 52.3% | 64.4% | 36.8% |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | | 63.1% | 21.3% | 4.5% | 33.5% |
| |
|---|
| Median (50 companies) | | 18.8% | 6.9% | 4.3% | 9.9% |
|---|
| HC International Inc ($2280) | | 38.0% | 25.1% | 52.7% | 15.4% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Fu Shou Yuan International Group Ltd ($1448) | 80.7% | 81.6% | 80.5% | 80.4% | 80.0% |
| China Communication Telecom Services Co Ltd ($8206) | | -56.6% | 61.6% | 58.6% | 69.1% |
| Dingyi Group Investment Ltd ($508) | 84.3% | 76.5% | 75.8% | | 64.5% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 61.6% | 67.1% | 66.2% | 66.8% | 62.8% |
| Cross-Harbour Holdings Ltd/The ($32) | 52.1% | 55.3% | 59.2% | 60.0% | 61.1% |
| |
|---|
| Median (47 companies) | 35.9% | 36.1% | 31.6% | 29.9% | 30.9% |
|---|
| HC International Inc ($2280) | 80.0% | 84.7% | 87.5% | 91.9% | 92.5% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Shenzhen International Holdings Ltd ($152) | 65.1% | 69.3% | 60.2% | 65.8% | 97.1% |
| Shenzhen Expressway Co Ltd ($548) | 72.9% | 80.4% | 74.3% | 79.4% | 76.6% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.0% | 74.3% | 78.3% | 74.5% | 74.0% |
| Anhui Expressway Co Ltd ($995) | 69.1% | 62.7% | 56.9% | 54.1% | 60.4% |
| Dragon Crown Group Holdings Ltd ($935) | 67.0% | 57.8% | 67.3% | 62.9% | 60.2% |
| |
|---|
| Median (50 companies) | 16.7% | 15.6% | 15.8% | 13.4% | 9.5% |
|---|
| HC International Inc ($2280) | 5.3% | 12.9% | 16.1% | 23.1% | 23.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 120.6% | 16.8% | 3.9% | 7.0% | 59.8% |
| COSCO Pacific Ltd ($1199) | 84.1% | 111.3% | 96.6% | 66.6% | 43.3% |
| Finet Group Ltd ($8317) | 0.8% | 3.9% | 10.3% | 9.1% | 26.0% |
| Dragon Crown Group Holdings Ltd ($935) | 7.5% | 2.5% | 37.2% | 52.0% | 23.0% |
| China Conch Venture Holdings Ltd ($586) | 12.0% | 12.5% | 13.8% | 5.7% | 22.3% |
| |
|---|
| Median (49 companies) | 4.4% | 3.6% | 3.4% | 4.2% | 4.0% |
|---|
| HC International Inc ($2280) | 24.5% | 15.1% | 8.5% | 28.7% | 24.7% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Packaging Holdings Development Ltd ($1439) | | 50.0% | 52.0% | 46.6% | 34.1% |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 167.2% | 136.8% | 51.5% | 26.6% | 30.0% |
| 1010 Printing Group Ltd ($1127) | 16.4% | 14.4% | 13.5% | 20.8% | 17.8% |
| Poly Culture Group Corp Ltd ($3636) | | 48.0% | 29.1% | 33.0% | 16.3% |
| Goldpac Group Ltd ($3315) | | 17.9% | 43.8% | 23.6% | 14.3% |
| |
|---|
| Median (50 companies) | 3.6% | 5.0% | 4.5% | 3.4% | 3.2% |
|---|
| HC International Inc ($2280) | 0.1% | 16.0% | 17.6% | 20.8% | 12.0% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Dalian Port PDA Co Ltd ($2880) | 2.0x | 5.7x | 5.7x | 4.8x | 4.7x |
| Sichuan Expressway Co Ltd ($107) | 1.0x | 1.8x | 2.7x | 3.8x | 4.3x |
| Anxian Yuan China Holdings Ltd ($922) | | | | 4.6x | 3.8x |
| Eagle Legend Asia Ltd ($936) | 0.7x | 4.3x | 4.0x | 4.0x | 3.3x |
| Yuexiu Transport Infrastructure Ltd ($1052) | -0.1x | 2.9x | 4.5x | 3.1x | 2.7x |
| |
|---|
| Median (31 companies) | -0.1x | -0.0x | 0.4x | -0.7x | -0.3x |
|---|
| HC International Inc ($2280) | -11.2x | -4.5x | -4.7x | -4.7x | -2.8x |
