Hong Kong Economic Times Holdings Ltd reports 697% CAPEX growth and 5.3% Revenue growth
22/06/2015 • About Hong Kong Economic Times Holdings Ltd (
$423) • By InTwits
Hong Kong Economic Times Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.6% in FY2015, 8.1% in FY2014, 3.4% in FY2013, 12.9% in FY2012, 21.6% in FY2011
- Hong Kong Economic Times Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 8.3%.
- CAPEX is quite volatile: 112 in FY2015, 14.0 in FY2014, 87.7 in FY2013, 84.9 in FY2012, 85.5 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.2%
- It operates with high leverage: Net Debt/EBITDA is -0.1x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hong Kong Economic Times Holdings Ltd ($423) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 952 | 1,006 | 1,033 | 1,065 | 1,122 | 5.3% |
| Gross Profit | 455 | 387 | 321 | 363 | 399 | 9.8% |
| SG&A | | | 174 | 174 | 182 | 4.6% |
| EBITDA | 205 | 130 | 35 | 86 | 108 | 25.1% |
| Net Income | 155 | 76 | 63 | 28 | 45 | 61.3% |
Balance Sheet
|
|---|
| Cash | 174 | 168 | 279 | 172 | 136 | -21.0% |
| Short Term Debt | 0 | 0 | 24 | 30 | 38 | 29.8% |
| Long Term Debt | 0 | 0 | 90 | 82 | 82 | 0.1% |
Cash flow
|
|---|
| Capex | 85 | 85 | 88 | 14 | 112 | 697.3% |
Ratios
|
|---|
| Revenue growth | 15.0% | 5.6% | 2.7% | 3.1% | 5.3% | |
| EBITDA growth | 30.2% | -36.7% | -72.8% | 143.8% | 25.1% | |
| Gross Margin | 47.8% | 38.5% | 31.1% | 34.1% | 35.6% | 1.5% |
| EBITDA Margin | 21.6% | 12.9% | 3.4% | 8.1% | 9.6% | 1.5% |
| Net Income Margin | 16.2% | 7.6% | 6.1% | 2.6% | 4.0% | 1.4% |
| SG&A, % of revenue | | | 16.8% | 16.4% | 16.2% | -0.1% |
| CAPEX, % of revenue | 9.0% | 8.4% | 8.5% | 1.3% | 10.0% | 8.6% |
| ROIC | 23.3% | 11.5% | -1.5% | 3.2% | 5.2% | 2.0% |
| ROE | 21.4% | 9.9% | 8.1% | 3.5% | 5.6% | 2.1% |
| Net Debt/EBITDA | -0.8x | -1.3x | -4.6x | -0.7x | -0.1x | 0.6x |
Revenue and profitability
Hong Kong Economic Times Holdings Ltd's Revenue increased on 5.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.95 pp from 4.6% to 5.5% in 2015.
Gross Margin increased slightly on 1.5 pp from 34.1% to 35.6% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased slightly on 1.4 pp from 2.6% to 4.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Hong Kong Economic Times Holdings Ltd had CAPEX/Revenue of 10.0%. CAPEX/Revenue increased slightly on 1.5 pp from 8.4% in FY2012 to 10.0% in FY2015. For the last three years the average CAPEX/Revenue was 6.6%.Hong Kong Economic Times Holdings Ltd maintained rich investment policy and has spent a lot to CAPEX (104% of EBITDA).
Return on investment
The company operates at low ROIC (5.19%) and ROE (5.60%). ROIC increased slightly on 2.0 pp from 3.2% to 5.2% in FY2015. ROE increased on 2.1 pp from 3.5% to 5.6% in FY2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from -0.7x to -0.1x in FY2015. Debt increased on 8.0% in FY2015 while cash dropped on 21.0% in FY2015.
Appendix 1: Peers in Media
Below we provide Hong Kong Economic Times Holdings Ltd benchmarking against other companies in Media 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 |
|---|
| CMMB Vision Holdings Ltd ($471) | | | 168.1% | 27.8% | |
| Culturecom Holdings Ltd ($343) | 4.7% | -24.2% | -7.7% | 16.4% | |
| Sing Pao Media Enterprises Ltd ($8010) | 20.7% | 15.3% | 26.9% | 9.7% | |
| Focus Media Network Ltd ($8112) | 23.7% | -10.6% | 34.6% | 5.6% | |
| Beijing Media Corp Ltd ($1000) | -1.5% | -7.6% | -1.8% | 2.3% | |
| |
|---|
| Median (19 companies) | 8.6% | 4.0% | -1.9% | -4.3% | -9.0% |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | |
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | |
| |
|---|
| Median (16 companies) | 43.6% | 38.1% | 40.5% | 36.2% | 38.6% |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | 47.8% | 38.5% | 31.1% | 34.1% | 35.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | |
| Television Broadcasts Ltd ($511) | 45.2% | 43.2% | 42.3% | 37.3% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| |
|---|
| Median (19 companies) | 13.3% | 9.9% | 11.6% | 12.5% | 14.6% |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | 21.6% | 12.9% | 3.4% | 8.1% | 9.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | |
| Culturecom Holdings Ltd ($343) | 12.5% | 10.2% | 38.6% | 24.5% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 14.6% | 12.0% | 8.5% | 11.4% | |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | |
| V1 Group Ltd ($82) | 1.4% | 1.9% | 3.2% | 10.1% | |
| |
|---|
| Median (19 companies) | 4.0% | 2.7% | 5.2% | 2.9% | 1.7% |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | 9.0% | 8.4% | 8.5% | 1.3% | 10.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Television Broadcasts Ltd ($511) | 26.5% | 23.8% | 22.4% | 15.1% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 21.5% | 18.5% | 18.4% | 11.7% | |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | |
| |
|---|
| Median (19 companies) | 7.9% | 3.7% | 5.1% | 2.6% | 7.8% |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | 23.3% | 11.5% | -1.5% | 3.2% | 5.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | |
| Next Media Ltd ($282) | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x |
| |
|---|
| Median (13 companies) | -1.6x | -1.9x | -1.1x | -1.5x | -0.1x |
|---|
| Hong Kong Economic Times Holdings Ltd ($423) | -0.8x | -1.3x | -4.6x | -0.7x | -0.1x |
