Sun East Technology Holdings Ltd Debt surged on 73.5% in 2015 and EBITDA surged on 11.2%
19/06/2015 • About Sun East Technology Holdings Ltd (
$365) • By InTwits
Sun East Technology Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun East Technology Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is 1.4%
- EBITDA Margin is quite volatile: 2.1% in FY2015, 2.0% in FY2014, 2.3% in FY2013, 4.8% in FY2012, 4.4% in FY2011
- Sun East Technology Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 9.4 in FY2015, 3.2 in FY2014, 9.9 in FY2013, 9.5 in FY2012, 2.3 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.4%
- It operates with high leverage: Net Debt/EBITDA is 3.1x while industry average is -2.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun East Technology Holdings Ltd ($365) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 845.3 | 632.8 | 565.4 | 787.6 | 838.2 | 6.4% |
| Gross Profit | 113.1 | 100.4 | 80.4 | 108.3 | 106.5 | -1.7% |
| SG&A | | 92.5 | 91.4 | 109.5 | 119.3 | 9.0% |
| EBITDA | 37.5 | 30.1 | 13.0 | 15.6 | 17.4 | 11.2% |
| Net Income | 12.3 | 13.0 | 5.7 | 9.4 | 2.5 | -73.1% |
Balance Sheet
|
|---|
| Cash | 186.3 | 165.3 | 137.9 | 88.5 | 51.7 | -41.6% |
| Short Term Debt | 114.1 | 105.3 | 48.3 | 61.0 | 105.5 | 73.1% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.3 | |
Cash flow
|
|---|
| Capex | 2.3 | 9.5 | 9.9 | 3.2 | 9.4 | 195.6% |
Ratios
|
|---|
| Revenue growth | 85.7% | -25.1% | -10.7% | 39.3% | 6.4% | |
| EBITDA growth | 344.7% | -19.8% | -56.6% | 19.8% | 11.2% | |
| Gross Margin | 13.4% | 15.9% | 14.2% | 13.8% | 12.7% | -1.0% |
| EBITDA Margin | 4.4% | 4.8% | 2.3% | 2.0% | 2.1% | 0.1% |
| Net Income Margin | 1.5% | 2.1% | 1.0% | 1.2% | 0.3% | -0.9% |
| SG&A, % of revenue | | 14.6% | 16.2% | 13.9% | 14.2% | 0.3% |
| CAPEX, % of revenue | 0.3% | 1.5% | 1.7% | 0.4% | 1.1% | 0.7% |
| ROIC | 7.1% | 4.0% | 0.8% | 1.3% | 1.4% | 0.2% |
| ROE | 4.8% | 4.6% | 1.9% | 2.9% | 0.8% | -2.1% |
| Net Debt/EBITDA | -1.9x | -2.0x | -6.9x | -1.8x | 3.1x | 4.9x |
Revenue and profitability
The company's Revenue increased on 6.4% in FY2015. EBITDA Margin showed almost no change in FY2015.
Gross Margin decreased slightly on 1.0 pp from 13.8% to 12.7% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign decreased slightly on 0.89 pp from 1.2% to 0.30% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.1% in FY2015. Sun East Technology Holdings Ltd showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 1.1%.Sun East Technology Holdings Ltd maintained rich investment policy and has spent a big chunk of EBITDA (54.3%) to CAPEX.
Return on investment
The company operates at low ROIC (1.44%) and ROE (0.75%). ROIC showed almost no change in FY2015. ROE decreased on 2.1 pp from 2.9% to 0.75% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.1x and Debt / EBITDA is 6.1x. Net Debt / EBITDA surged on 4.9x from -1.8x to 3.1x in FY2015. Debt surged on 73.5% in FY2015 while cash dropped on 41.6% in FY2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find Sun East Technology Holdings Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 30.3% | 2.6% | -8.9% | 37.3% | |
| Sinoref Holdings Ltd ($1020) | 1.5% | -0.2% | -42.2% | 29.2% | |
| North Asia Strategic Holdings Ltd ($8080) | | -52.2% | -29.1% | 23.7% | 42.6% |
| Asia Tele-Net & Technology Corp Ltd ($679) | 3.5% | -36.9% | 23.0% | 18.6% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.4% | 7.8% | -23.2% | 10.6% | |
| |
|---|
| Median (21 companies) | 20.4% | -3.6% | -4.2% | -2.6% | 42.6% |
|---|
| Sun East Technology Holdings Ltd ($365) | | -25.1% | -10.7% | 39.3% | 6.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 38.3% | 49.1% | 51.7% | 54.9% | |
| Renheng Enterprise Holdings Ltd ($3628) | 36.4% | 44.3% | 44.8% | 45.4% | |
| Haitian International Holdings Ltd ($1882) | 29.7% | 30.1% | 31.6% | 32.4% | |
| CHTC Fong's Industries Co Ltd ($641) | 26.5% | 24.4% | 30.0% | 32.3% | |
| Good Friend International Holdings Inc ($2398) | 23.3% | 20.1% | 22.9% | 26.5% | |
| |
|---|
| Median (21 companies) | 23.8% | 23.8% | 21.5% | 18.7% | 13.7% |
|---|
| Sun East Technology Holdings Ltd ($365) | 13.4% | 15.9% | 14.2% | 13.8% | 12.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 18.5% | 24.0% | 26.9% | 28.0% | |
| Haitian International Holdings Ltd ($1882) | 20.5% | 19.7% | 20.7% | 21.9% | |
| Renheng Enterprise Holdings Ltd ($3628) | 22.9% | 24.7% | 23.9% | 20.7% | |
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 12.9% | 12.9% | 6.5% | 12.3% | |
| |
|---|
| Median (21 companies) | 9.7% | 8.7% | 8.6% | 8.5% | 1.9% |
|---|
| Sun East Technology Holdings Ltd ($365) | 4.4% | 4.8% | 2.3% | 2.0% | 2.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China High Precision Automation Group Ltd ($591) | 33.0% | 20.5% | 9.1% | 18.4% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 14.9% | 20.5% | 20.3% | 11.6% | |
| LK Technology Holdings Ltd ($558) | 7.6% | 9.3% | 10.2% | 9.1% | |
| First Tractor Co Ltd ($38) | 6.3% | 4.9% | 4.3% | 7.3% | |
| Greens Holdings Ltd ($1318) | 9.3% | 8.9% | 3.1% | 7.1% | |
| |
|---|
| Median (21 companies) | 6.3% | 4.2% | 4.3% | 4.5% | 0.4% |
|---|
| Sun East Technology Holdings Ltd ($365) | 0.3% | 1.5% | 1.7% | 0.4% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Haitian International Holdings Ltd ($1882) | 26.8% | 19.8% | 21.2% | 19.4% | |
| Jingwei Textile Machinery ($350) | 23.3% | 19.4% | 20.9% | 17.4% | |
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | |
| China CNR Corp Ltd ($6199) | 11.1% | 7.9% | 9.3% | 10.6% | |
| Shanghai Electric Group Co Ltd ($2727) | 9.8% | 10.9% | 8.6% | 8.9% | |
| |
|---|
| Median (21 companies) | 9.9% | 7.1% | 4.0% | 2.6% | 1.9% |
|---|
| Sun East Technology Holdings Ltd ($365) | 7.1% | 4.0% | 0.8% | 1.3% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First Tractor Co Ltd ($38) | 1.1x | 0.5x | 2.5x | 9.2x | |
| Shanghai Prime Machinery Co Ltd ($2345) | -0.0x | -0.6x | 0.3x | 6.0x | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.9x | 3.0x | 11.4x | 5.6x | |
| Honghua Group Ltd ($196) | 0.1x | 1.2x | 3.2x | 5.2x | |
| LK Technology Holdings Ltd ($558) | 0.9x | 2.5x | 5.1x | 4.9x | |
| |
|---|
| Median (17 companies) | -0.2x | -1.1x | 0.3x | 0.7x | -19.2x |
|---|
| Sun East Technology Holdings Ltd ($365) | -1.9x | -2.0x | -6.9x | -1.8x | 3.1x |
