Sincere Watch Hong Kong Ltd EBITDA dropped on 39.4% in 2015 and Revenue decreased on 9.0%
16/06/2015 • About Sincere Watch Hong Kong Ltd (
$444) • By InTwits
Sincere Watch Hong Kong Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sincere Watch Hong Kong Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's a lot of higher than industry average of 10.1%.
- CAPEX is quite volatile: 10.5 in FY2015, 28.5 in FY2014, 27.0 in FY2013, 21.3 in FY2012, 7.7 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sincere Watch Hong Kong Ltd ($444) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 822 | 1,115 | 749 | 648 | 590 | -9.0% |
| Gross Profit | 281 | 397 | 298 | 251 | 226 | -10.2% |
| SG&A | | | 120 | 127 | 87 | -31.6% |
| EBITDA | 135 | 203 | 152 | 100 | 61 | -39.4% |
| Net Income | 79 | 139 | 119 | 52 | 40 | -22.7% |
Balance Sheet
|
|---|
| Cash | 293 | 414 | 333 | 316 | 460 | 45.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 8 | 21 | 27 | 28 | 11 | -63.1% |
Ratios
|
|---|
| Revenue growth | 85.0% | 35.7% | -32.8% | -13.5% | -9.0% | |
| EBITDA growth | 300.1% | 50.2% | -25.2% | -34.0% | -39.4% | |
| Gross Margin | 34.2% | 35.6% | 39.7% | 38.8% | 38.3% | -0.5% |
| EBITDA Margin | 16.4% | 18.2% | 20.2% | 15.4% | 10.3% | -5.2% |
| Net Income Margin | 9.6% | 12.5% | 15.9% | 8.0% | 6.8% | -1.2% |
| SG&A, % of revenue | | | 16.0% | 19.5% | 14.7% | -4.9% |
| CAPEX, % of revenue | 0.9% | 1.9% | 3.6% | 4.4% | 1.8% | -2.6% |
| ROIC | 46.4% | 51.7% | 27.7% | 14.6% | 5.5% | -9.1% |
| ROE | 27.6% | 36.7% | 24.0% | 9.2% | 5.8% | -3.4% |
| Net Debt/EBITDA | -2.2x | -2.0x | -2.2x | -3.2x | -7.6x | -4.4x |
Revenue and profitability
The company's Revenue decreased on 9.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 23.8% to 26.2% in 2015.
Gross Margin decreased slightly on 0.51 pp from 38.8% to 38.3% in FY2015. SG&A as a % of Revenue decreased on 4.9 pp from 19.5% to 14.7% in FY2015.
Net Income marign decreased slightly on 1.2 pp from 8.0% to 6.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2015. CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at low ROIC (5.51%) and ROE (5.85%). ROIC decreased on 9.1 pp from 14.6% to 5.5% in FY2015. ROE decreased on 3.4 pp from 9.2% to 5.8% in FY2015.
Leverage (Debt)
The company has no debt. Cash surged on 45.6% in FY2015.
Appendix 1: Peers in Distribution/Wholesale
Below you can find Sincere Watch Hong Kong Ltd benchmarking vs. other companies in Distribution/Wholesale 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Forefront Group Ltd ($885) | | | 504.6% | 3,871.0% | |
| China LNG Group Ltd ($931) | -84.5% | 694.8% | 13.6% | 1,341.3% | |
| Sheng Yuan Holdings Ltd ($851) | 571.1% | -86.1% | 756.9% | 567.2% | |
| China Infrastructure Investment Ltd ($600) | 346.9% | 412.1% | -50.9% | 557.9% | |
| China-Hongkong Photo Products Holdings Ltd ($1123) | 2.5% | 24.9% | 9.0% | 81.2% | |
| |
|---|
| Median (37 companies) | 15.9% | 2.6% | 2.1% | 1.4% | 107.3% |
|---|
| Sincere Watch Hong Kong Ltd ($444) | | 35.7% | -32.8% | -13.5% | -9.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | 67.0% | 75.3% | 71.7% | 74.8% | |
| Forefront Group Ltd ($885) | | | | 69.8% | |
| YGM Trading Ltd ($375) | 67.1% | 66.5% | 67.4% | 64.0% | |
| Goldlion Holdings Ltd ($533) | 57.3% | 56.4% | 54.1% | 55.7% | |
| E.Bon Holdings Ltd ($599) | 36.6% | 40.3% | 37.4% | 35.8% | |
| |
|---|
| Median (33 companies) | 15.5% | 17.3% | 17.1% | 18.0% | 16.1% |
|---|
| Sincere Watch Hong Kong Ltd ($444) | 34.2% | 35.6% | 39.7% | 38.8% | 38.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | -134.6% | 163.7% | 613.4% | 285.7% | |
| China LNG Group Ltd ($931) | 195.2% | 95.1% | 76.4% | 97.9% | |
| Forefront Group Ltd ($885) | | -2,113.8% | -803.1% | 57.7% | |
| China Infrastructure Investment Ltd ($600) | -1,171.2% | -274.9% | 120.0% | 52.0% | |
| GA Holdings Ltd ($8126) | -4.5% | 8.0% | 19.7% | 22.9% | |
| |
|---|
| Median (37 companies) | 2.2% | 2.1% | 1.9% | 4.5% | -3.0% |
|---|
| Sincere Watch Hong Kong Ltd ($444) | 16.4% | 18.2% | 20.2% | 15.4% | 10.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| C Y Foundation Group Ltd ($1182) | 9.8% | 2.5% | 5.2% | 82.2% | 9.3% |
| Inspur International Ltd ($596) | 0.9% | 8.4% | 12.2% | 33.6% | |
| SIS International Holdings ($529) | 0.2% | 13.4% | 31.8% | 14.8% | |
| HKC International Holdings Ltd ($248) | 0.9% | 5.5% | 0.8% | 11.4% | |
| Tan Chong International Ltd ($693) | 7.6% | 6.0% | 7.6% | 7.0% | |
| |
|---|
| Median (36 companies) | 1.5% | 1.3% | 1.7% | 1.6% | 9.3% |
|---|
| Sincere Watch Hong Kong Ltd ($444) | 0.9% | 1.9% | 3.6% | 4.4% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China LNG Group Ltd ($931) | 2.2% | 8.4% | 7.4% | 87.0% | |
| Yestar International Holdings Co Ltd ($2393) | 29.4% | 28.8% | 24.1% | 26.2% | |
| Powerwell Pacific Holdings Ltd ($8265) | 27.8% | 6.4% | 6.4% | 23.6% | |
| Forefront Group Ltd ($885) | -37.7% | -4.9% | -11.0% | 19.5% | |
| GA Holdings Ltd ($8126) | -6.1% | 3.3% | 12.0% | 13.5% | |
| |
|---|
| Median (38 companies) | 2.2% | 2.1% | 0.9% | 3.1% | -6.6% |
|---|
| Sincere Watch Hong Kong Ltd ($444) | 46.4% | 51.7% | 27.7% | 14.6% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sheng Yuan Holdings Ltd ($851) | | | | 19.3x | |
| Takson Holdings Ltd ($918) | | | 11.5x | 11.7x | |
| Huiyin Household Appliances Holdings Co Ltd ($1280) | 10.1x | | | 10.9x | |
| Pacific Andes International Holdings Ltd ($1174) | 4.9x | 5.1x | 9.1x | 7.8x | |
| SIS International Holdings ($529) | -62.1x | -1.8x | 7.0x | 7.2x | |
| |
|---|
| Median (26 companies) | -0.2x | -0.1x | -0.5x | 0.3x | 6.1x |
|---|
| Sincere Watch Hong Kong Ltd ($444) | -2.2x | -2.0x | -2.2x | -3.2x | -7.6x |
