Emperor International Holdings Ltd reports 51.7% Net Income decline and 6.4% Revenue decline
24/06/2015 • About Emperor International Holdings Ltd (
$163) • By InTwits
Emperor International Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 73.9% in FY2015 vs. 100.6% in FY2014 vs. 224.8% in FY2011
- EBITDA Margin is quite volatile: 73.9% in FY2015, 100.6% in FY2014, 131.8% in FY2013, 180.7% in FY2012, 224.8% in FY2011
- Emperor International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 91.9%. At the same time it's a lot of higher than industry average of 47.5%.
- CAPEX is quite volatile: 73.8 in 2015, 162 in 2014, 132 in 2013, 2.1 in 2012, 15.2 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.3%
- It operates with high leverage: Net Debt/EBITDA is 7.2x while industry average is 3.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Emperor International Holdings Ltd ($163) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,785 | 2,960 | 5,703 | 3,014 | 2,821 | -6.4% |
| Gross Profit | 1,330 | 2,110 | 3,703 | 2,387 | 2,124 | -11.0% |
| SG&A | 741 | 884 | 974 | 1,025 | 1,056 | 3.0% |
| EBITDA | 4,013 | 5,348 | 7,518 | 3,031 | 2,085 | -31.2% |
| Net Income | 3,445 | 4,459 | 6,156 | 1,858 | 898 | -51.7% |
Balance Sheet
|
|---|
| Cash | 1,097 | 1,316 | 2,310 | 765 | 1,357 | 77.4% |
| Short Term Debt | 1,444 | 2,501 | 813 | 2,086 | 2,862 | 37.2% |
| Long Term Debt | 6,476 | 7,141 | 8,734 | 10,987 | 13,489 | 22.8% |
Cash flow
|
|---|
| Capex | 1,668 | 2,986 | 2,768 | 3,191 | 3,119 | -2.3% |
Ratios
|
|---|
| Revenue growth | 23.1% | 65.8% | 92.7% | -47.2% | -6.4% | |
| EBITDA growth | 24.9% | 33.3% | 40.6% | -59.7% | -31.2% | |
| Gross Margin | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% | -3.9% |
| EBITDA Margin | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% | -26.7% |
| Net Income Margin | 193.0% | 150.7% | 107.9% | 61.7% | 31.8% | -29.8% |
| SG&A, % of revenue | 41.5% | 29.9% | 17.1% | 34.0% | 37.4% | 3.4% |
| CAPEX, % of revenue | 93.5% | 100.9% | 48.5% | 105.9% | 110.6% | 4.7% |
| ROIC | 18.8% | 19.9% | 22.5% | 7.3% | 4.3% | -3.1% |
| ROE | 30.5% | 29.0% | 30.1% | 7.7% | 3.6% | -4.1% |
| Net Debt/EBITDA | 1.7x | 1.6x | 1.0x | 4.1x | 7.2x | 3.1x |
Revenue and profitability
Emperor International Holdings Ltd's Revenue decreased on 6.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.66 pp from 4.4% to 5.1% in 2015.
Gross Margin decreased on 3.9 pp from 79.2% to 75.3% in FY2015. SG&A as a % of Revenue increased on 3.4 pp from 34.0% to 37.4% in FY2015.
Net Income marign dropped on 29.8 pp from 61.7% to 31.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 111%. Emperor International Holdings Ltd's CAPEX/Revenue increased on 9.7 pp from 101% in FY2012 to 111% in FY2015. For the last three years the average CAPEX/Revenue was 88.3%.Emperor International Holdings Ltd has spent a lot to CAPEX (150% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (4.28%) and ROE (3.56%). ROIC decreased on 3.1 pp from 7.3% to 4.3% in FY2015. ROE decreased on 4.1 pp from 7.7% to 3.6% in FY2015.
Leverage (Debt)
Debt level is 7.2x Net Debt / EBITDA and 7.8x Debt / EBITDA. Net Debt / EBITDA jumped on 3.1x from 4.1x to 7.2x in FY2015. Debt jumped on 25.1% in FY2015 while cash surged on 77.4% in FY2015.
Appendix 1: Peers in Holding Companies-Divers
Below you can find Emperor International Holdings Ltd benchmarking vs. other companies in Holding Companies-Divers 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 |
|---|
| Kong Sun Holdings Ltd ($295) | -18.7% | -88.3% | 5.1% | 7,067.0% | |
| Goldin Properties Holdings Ltd ($283) | | | 126.0% | 2,065.8% | -79.6% |
| China Primary Energy Holdings Ltd ($8117) | -43.1% | -56.3% | -23.6% | 195.4% | |
| Carnival Group International Holdings Ltd ($996) | | | | 159.1% | |
| 21 Holdings Ltd ($1003) | 20.3% | -57.4% | -12.4% | 106.4% | |
| |
|---|
| Median (42 companies) | 11.6% | 11.4% | 3.3% | 15.7% | 19.4% |
|---|
| Emperor International Holdings Ltd ($163) | | 65.8% | 92.7% | -47.2% | -6.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Multifield International Holdings Ltd ($898) | 66.4% | 87.5% | 84.7% | 89.1% | |
| New Century Group Hong Kong Ltd ($234) | 76.7% | 27.3% | 85.2% | 82.8% | |
| China Renji Medical Group Ltd/Hong Kong ($648) | 54.9% | 70.0% | 67.3% | 78.6% | |
| Century Legend Holdings Ltd ($79) | 68.5% | 70.1% | 72.3% | 71.0% | |
| Orient Victory China Holdings Ltd ($265) | 68.5% | 69.4% | 61.6% | 67.4% | |
| |
|---|
| Median (39 companies) | 27.9% | 32.9% | 34.6% | 30.8% | 44.1% |
|---|
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Multifield International Holdings Ltd ($898) | 49.8% | 80.1% | 68.3% | 97.5% | |
| New Century Group Hong Kong Ltd ($234) | 82.5% | -5.5% | 78.8% | 58.3% | |
| Magnificent Estates ($201) | 42.1% | 45.5% | 47.8% | 53.0% | |
| China Merchants Holdings International Co Ltd ($144) | 63.7% | 56.4% | 50.8% | 45.2% | |
| Wisdom Holdings Group ($1661) | 25.0% | 32.4% | 45.1% | 44.4% | |
| |
|---|
| Median (44 companies) | 5.2% | 1.7% | 1.9% | 5.6% | 8.3% |
|---|
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Far East Holdings International Ltd ($36) | 2.7% | 0.1% | 13.2% | 422.1% | |
| China Investments Holdings Ltd ($132) | 20.7% | 4.8% | 81.9% | 382.2% | |
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | |
| New Century Group Hong Kong Ltd ($234) | 1.0% | 97.2% | 1.0% | 142.7% | |
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | |
| |
|---|
| Median (44 companies) | 4.1% | 2.2% | 3.6% | 6.1% | 69.2% |
|---|
| Emperor International Holdings Ltd ($163) | 93.5% | 100.9% | 48.5% | 105.9% | 110.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wisdom Holdings Group ($1661) | 62.7% | 68.6% | 42.1% | 28.8% | |
| Chinney Alliance Group Ltd ($385) | 3.4% | 6.4% | 8.1% | 13.6% | |
| Hutchison Whampoa Ltd ($13) | 3.3% | 3.7% | 4.2% | 8.1% | |
| Code Agriculture Holdings Ltd ($8153) | -0.1% | 2.4% | -3.3% | 7.9% | |
| C C Land Holdings Ltd ($1224) | 4.5% | 7.4% | 5.3% | 7.9% | |
| |
|---|
| Median (44 companies) | 0.3% | -0.2% | -0.2% | 0.5% | 2.0% |
|---|
| Emperor International Holdings Ltd ($163) | 18.8% | 19.9% | 22.5% | 7.3% | 4.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | |
| Carnival Group International Holdings Ltd ($996) | | | | 23.7x | |
| Van Shung Chong Holdings Ltd ($1001) | 3.4x | | 0.9x | 12.3x | |
| Southeast Asia Properties & Finance Ltd ($252) | 6.8x | 6.7x | 5.7x | 9.2x | 4.3x |
| Code Agriculture Holdings Ltd ($8153) | 24.3x | 11.9x | 42.8x | 8.7x | |
| |
|---|
| Median (26 companies) | 3.1x | 2.6x | 3.1x | 2.9x | 7.6x |
|---|
| Emperor International Holdings Ltd ($163) | 1.7x | 1.6x | 1.0x | 4.1x | 7.2x |
