Deson Development International Holdings Net Debt / EBITDA jumped on 33.3x from 13.7x to 47.0x in 2015 while EBITDA decreased on 8.7%
22/06/2015 • About Deson Development International Holdings (
$262) • By InTwits
Deson Development International Holdings reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Deson Development International Holdings doesn't have a profitable business model yet: FY2015 ROIC is 0.8%
- EBITDA Margin is quite volatile: 2.6% in FY2015, 2.5% in FY2014, 7.4% in FY2013, 9.8% in FY2012, 2.2% in FY2011
- Deson Development International Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is at 0.8%
- It operates with high leverage: Net Debt/EBITDA is 47.0x while industry average is 5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Deson Development International Holdings ($262) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 446.5 | 817.6 | 788.1 | 984.2 | 850.2 | -13.6% |
| Gross Profit | 59.1 | 147.9 | 133.1 | 102.0 | 81.0 | -20.6% |
| SG&A | | | | | 126.4 | |
| EBITDA | 9.8 | 79.9 | 58.2 | 24.2 | 22.1 | -8.7% |
| Net Income | 162.2 | 72.2 | 49.1 | 145.7 | 94.5 | -35.2% |
Balance Sheet
|
|---|
| Cash | 224.6 | 33.5 | 97.9 | 129.5 | 78.4 | -39.4% |
| Short Term Debt | 48.0 | 323.8 | 231.5 | 304.5 | 521.6 | 71.3% |
| Long Term Debt | 207.1 | 14.9 | 150.2 | 157.0 | 597.7 | 280.6% |
Cash flow
|
|---|
| Capex | 6.8 | 1.0 | 1.1 | 0.6 | 0.7 | 7.3% |
Ratios
|
|---|
| Revenue growth | -10.5% | 83.1% | -3.6% | 24.9% | -13.6% | |
| EBITDA growth | -86.6% | 719.3% | -27.2% | -58.4% | -8.7% | |
| Gross Margin | 13.2% | 18.1% | 16.9% | 10.4% | 9.5% | -0.8% |
| EBITDA Margin | 2.2% | 9.8% | 7.4% | 2.5% | 2.6% | 0.1% |
| Net Income Margin | 36.3% | 8.8% | 6.2% | 14.8% | 11.1% | -3.7% |
| SG&A, % of revenue | | | | | 14.9% | 14.9% |
| CAPEX, % of revenue | 1.5% | 0.1% | 0.1% | 0.1% | 0.1% | 0.0% |
| ROIC | 0.5% | 6.5% | 4.1% | 1.2% | 0.8% | -0.4% |
| ROE | 26.7% | 10.0% | 6.1% | 16.0% | 8.9% | -7.1% |
| Net Debt/EBITDA | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x | 33.3x |
Revenue and profitability
Deson Development International Holdings's Revenue dropped on 13.6% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.2 pp from 7.6% to 9.8% in 2015.
Gross Margin decreased slightly on 0.84 pp from 10.4% to 9.5% in FY2015.
Net Income marign decreased on 3.7 pp from 14.8% to 11.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Deson Development International Holdings had CAPEX/Revenue of 0.082%. CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 0.097%.
Return on investment
The company operates at low ROIC (0.76%) and ROE (8.87%). ROIC showed almost no change in FY2015. ROE decreased on 7.1 pp from 16.0% to 8.9% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 47.0x and Debt / EBITDA is 50.6x. Net Debt / EBITDA surged on 33.3x from 13.7x to 47.0x in FY2015. Debt jumped on 143% in FY2015 while cash dropped on 39.4% in FY2015.
Appendix 1: Peers in Engineering&Construction
Below we provide Deson Development International Holdings benchmarking against other companies in Engineering&Construction industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Richly Field China Development Ltd ($313) | | | -45.0% | 464.2% | |
| Junefield Department Store Group Ltd ($758) | 22.9% | -20.3% | -24.9% | 126.6% | |
| CNQC International Holdings Ltd ($1240) | 401.9% | 21.6% | 91.0% | 103.7% | |
| Wison Engineering Services Co Ltd ($2236) | 1.2% | -2.9% | -24.9% | 90.3% | |
| China Resources and Transportation Group Ltd ($269) | | 939.8% | 3,196.3% | 87.9% | -41.6% |
| |
|---|
| Median (39 companies) | 10.5% | 9.2% | 21.3% | 10.8% | -16.5% |
|---|
| Deson Development International Holdings ($262) | | 83.1% | -3.6% | 24.9% | -13.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | 2.2% | 43.6% | 65.6% | 64.0% | |
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | |
| Grand Ming Group Holdings Ltd ($1271) | 20.4% | 11.0% | 18.1% | 35.7% | 19.7% |
| China Saite Group Co Ltd ($153) | 29.4% | 32.1% | 33.7% | 29.8% | |
| |
|---|
| Median (34 companies) | 11.0% | 11.0% | 11.6% | 12.4% | 6.6% |
|---|
| Deson Development International Holdings ($262) | 13.2% | 18.1% | 16.9% | 10.4% | 9.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | -0.5% | 46.2% | 73.8% | 77.1% | |
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | |
| Grand Ming Group Holdings Ltd ($1271) | 17.5% | 10.0% | 15.8% | 31.0% | 19.0% |
| |
|---|
| Median (40 companies) | 9.2% | 7.9% | 6.9% | 6.2% | 3.7% |
|---|
| Deson Development International Holdings ($262) | 2.2% | 9.8% | 7.4% | 2.5% | 2.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| Shun Cheong Holdings ($650) | 7.2% | 16.4% | 8.0% | 23.9% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 6.1% | 4.2% | 7.7% | 20.2% | |
| KFM Kingdom Holdings Ltd ($3816) | 6.5% | 4.6% | 11.5% | 14.9% | |
| |
|---|
| Median (40 companies) | 4.5% | 2.5% | 3.1% | 2.2% | 2.4% |
|---|
| Deson Development International Holdings ($262) | 1.5% | 0.1% | 0.1% | 0.1% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | |
| CNQC International Holdings Ltd ($1240) | 23.1% | 12.2% | 22.3% | 40.4% | |
| China Saite Group Co Ltd ($153) | 46.3% | 64.0% | 53.2% | 35.3% | |
| Excel Development Holdings Ltd ($1372) | | 33.1% | 27.2% | 16.4% | 8.6% |
| China Machinery Engineering Corp ($1829) | 35.5% | 24.9% | 20.4% | 16.0% | |
| |
|---|
| Median (41 companies) | 7.0% | 5.2% | 5.2% | 3.8% | 0.3% |
|---|
| Deson Development International Holdings ($262) | 0.5% | 6.5% | 4.1% | 1.2% | 0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Chun Wo Development Holdings Ltd ($711) | | 14.3x | 8.1x | 12.6x | |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | |
| Huayu Expressway Group Ltd ($1823) | | 20.6x | 10.8x | 9.4x | |
| |
|---|
| Median (33 companies) | 0.7x | 1.7x | 1.9x | 2.6x | 6.7x |
|---|
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
