Hanison Construction Holdings Ltd reports 247% EBITDA growth and 28.8% Revenue growth
24/06/2015 • About Hanison Construction Holdings Ltd (
$896) • By InTwits
Hanison Construction 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: 7.6% in FY2015, 2.8% in FY2014, 6.9% in FY2013, 3.0% in FY2012, -5.0% in FY2011
- Hanison Construction Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 6.6%.
- CAPEX is quite volatile: 13.5 in FY2015, 6.9 in FY2014, 341 in FY2013, 2.9 in FY2012, 12.5 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hanison Construction Holdings Ltd ($896) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 723 | 1,235 | 1,554 | 1,627 | 2,095 | 28.8% |
| Gross Profit | 79 | 164 | 264 | 249 | 387 | 55.6% |
| SG&A | | | 166 | 158 | 236 | 49.3% |
| EBITDA | -36 | 37 | 107 | 46 | 160 | 247.2% |
| Net Income | 176 | 128 | 188 | 156 | 419 | 169.2% |
Balance Sheet
|
|---|
| Cash | 216 | 185 | 293 | 323 | 301 | -6.9% |
| Short Term Debt | 570 | 734 | 811 | 699 | 691 | -1.1% |
| Long Term Debt | 41 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 13 | 3 | 341 | 7 | 14 | 96.4% |
Ratios
|
|---|
| Revenue growth | -18.2% | 70.7% | 25.9% | 4.6% | 28.8% | |
| EBITDA growth | 479.2% | -201.9% | 188.8% | -56.8% | 247.2% | |
| Gross Margin | 11.0% | 13.3% | 17.0% | 15.3% | 18.5% | 3.2% |
| EBITDA Margin | -5.0% | 3.0% | 6.9% | 2.8% | 7.6% | 4.8% |
| Net Income Margin | 24.3% | 10.4% | 12.1% | 9.6% | 20.0% | 10.4% |
| SG&A, % of revenue | | | 10.7% | 9.7% | 11.3% | 1.5% |
| CAPEX, % of revenue | 1.7% | 0.2% | 21.9% | 0.4% | 0.6% | 0.2% |
| ROIC | -2.7% | 1.9% | 5.2% | 1.9% | 6.7% | 4.8% |
| ROE | 20.8% | 12.9% | 16.6% | 12.1% | 27.1% | 15.0% |
| Net Debt/EBITDA | | 14.9x | 4.9x | 8.2x | 2.4x | -5.7x |
Revenue and profitability
The company's Revenue jumped on 28.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.7 pp from 7.4% to -16.3% in FY2015.
Gross Margin increased on 3.2 pp from 15.3% to 18.5% in FY2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 9.7% to 11.3% in FY2015.
Net Income marign jumped on 10.4 pp from 9.6% to 20.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 0.64%. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 7.7%.
Return on investment
The company operates at good ROE (27.12%) while ROIC is low (6.70%). ROIC increased on 4.8 pp from 1.9% to 6.7% in FY2015. ROE surged on 15.0 pp from 12.1% to 27.1% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 4.3x. Net Debt / EBITDA dropped on 5.7x from 8.2x to 2.4x in FY2015. Debt decreased slightly on 1.1% in FY2015 while cash decreased on 6.9% in FY2015.
Appendix 1: Peers in Engineering&Construction
Below you can find Hanison Construction Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| 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) | 15.2% | 9.2% | 20.8% | 11.7% | 11.3% |
|---|
| Hanison Construction Holdings Ltd ($896) | | 70.7% | 25.9% | 4.6% | 28.8% |
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) | 11.5% | 11.0% | 11.6% | 11.6% | 7.0% |
|---|
| Hanison Construction Holdings Ltd ($896) | 11.0% | 13.3% | 17.0% | 15.3% | 18.5% |
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% | 8.7% | 7.4% | 6.2% | 2.6% |
|---|
| Hanison Construction Holdings Ltd ($896) | -5.0% | 3.0% | 6.9% | 2.8% | 7.6% |
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% | 2.6% | 2.2% | 2.4% |
|---|
| Hanison Construction Holdings Ltd ($896) | 1.7% | 0.2% | 21.9% | 0.4% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| 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% | 5.6% | 5.0% | 3.8% | 0.8% |
|---|
| Hanison Construction Holdings Ltd ($896) | -2.7% | 1.9% | 5.2% | 1.9% | 6.7% |
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 |
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| 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 | |
| |
|---|
| Median (33 companies) | 0.8x | 1.7x | 1.9x | 2.6x | 7.6x |
|---|
| Hanison Construction Holdings Ltd ($896) | | 14.9x | 4.9x | 8.2x | 2.4x |
