Starlite Holdings Ltd reports 10.5% EBITDA decline and 1.3 pp EBITDA Margin decline from 6.9% to 5.7%
24/06/2015 • About Starlite Holdings Ltd (
$403) • By InTwits
Starlite Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.7% in FY2015 vs. 6.9% in FY2014 vs. 7.2% in FY2011
- Starlite Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 5.8%.
- CAPEX is quite volatile: 105 in FY2015, 56.9 in FY2014, 33.8 in FY2013, 123 in FY2012, 87.7 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.0%
- It operates with high leverage: Net Debt/EBITDA is 0.5x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Starlite Holdings Ltd ($403) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,545 | 1,360 | 1,428 | 1,457 | 1,592 | 9.3% |
| Gross Profit | 266 | 238 | 271 | 297 | 299 | 0.9% |
| SG&A | | | 163 | 178 | 183 | 2.7% |
| EBITDA | 111 | 80 | 100 | 101 | 90 | -10.5% |
| Net Income | 25 | -24 | 9 | 15 | 3 | -82.4% |
Balance Sheet
|
|---|
| Cash | 168 | 190 | 183 | 216 | 211 | -2.3% |
| Short Term Debt | 169 | 202 | 227 | 166 | 184 | 11.1% |
| Long Term Debt | 46 | 29 | 18 | 82 | 70 | -15.0% |
Cash flow
|
|---|
| Capex | 52 | 70 | 46 | 83 | 58 | -30.5% |
Ratios
|
|---|
| Revenue growth | 30.7% | -12.0% | 5.0% | 2.0% | 9.3% | |
| EBITDA growth | -8.7% | -28.0% | 24.6% | 1.3% | -10.5% | |
| Gross Margin | 17.2% | 17.5% | 19.0% | 20.4% | 18.8% | -1.6% |
| EBITDA Margin | 7.2% | 5.9% | 7.0% | 6.9% | 5.7% | -1.3% |
| Net Income Margin | 1.6% | -1.8% | 0.7% | 1.0% | 0.2% | -0.9% |
| SG&A, % of revenue | | | 11.4% | 12.2% | 11.5% | -0.7% |
| CAPEX, % of revenue | 3.4% | 5.1% | 3.2% | 5.7% | 3.6% | -2.1% |
| ROIC | 5.7% | 1.6% | 3.9% | 4.1% | 3.0% | -1.1% |
| ROE | 4.4% | -4.2% | 1.7% | 2.7% | 0.5% | -2.2% |
| Net Debt/EBITDA | 0.4x | 0.5x | 0.6x | 0.3x | 0.5x | 0.2x |
Revenue and profitability
The company's Revenue increased on 9.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 10.0 pp from 15.2% to 5.2% in 2015.
Gross Margin decreased slightly on 1.6 pp from 20.4% to 18.8% in FY2015. SG&A as a % of Revenue decreased slightly on 0.73 pp from 12.2% to 11.5% in FY2015.
Net Income marign decreased slightly on 0.87 pp from 1.0% to 0.17% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.6% in FY2015. CAPEX/Revenue decreased slightly on 1.5 pp from 5.1% in FY2012 to 3.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.2%.The company maintained rich investment policy and has spent a big chunk of EBITDA (63.8%) to CAPEX.
Return on investment
The company operates at low ROIC (3.01%) and ROE (0.48%). ROIC decreased slightly on 1.1 pp from 4.1% to 3.0% in FY2015. ROE decreased on 2.2 pp from 2.7% to 0.48% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is 2.8x. Net Debt / EBITDA jumped on 0.2x from 0.3x to 0.5x in FY2015. Debt increased on 2.5% in FY2015 while cash decreased on 2.3% in FY2015.
Appendix 1: Peers in Packaging&Containers
Below we provide Starlite Holdings Ltd benchmarking against other companies in Packaging&Containers 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 |
|---|
| China For You Group Co Ltd ($572) | 19.6% | -46.9% | -99.7% | 36,225.6% | |
| China Aluminum Cans Holdings Ltd ($6898) | 19.6% | 15.5% | -5.0% | 189.1% | |
| Zhengye International Holdings Co Ltd ($3363) | 10.5% | 6.8% | 16.4% | 18.6% | |
| Come Sure Group Holdings Ltd ($794) | 45.8% | 10.7% | -0.7% | 16.8% | |
| Huajun Holdings Ltd ($377) | 9.8% | 11.2% | 3.3% | 3.4% | |
| |
|---|
| Median (17 companies) | 19.6% | 5.8% | 5.0% | 0.8% | 12.5% |
|---|
| Starlite Holdings Ltd ($403) | | -12.0% | 5.0% | 2.0% | 9.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaxi Holdings Co Ltd ($1689) | 13.1% | 19.0% | 28.2% | 40.9% | 37.5% |
| Sheen Tai Holdings Grp Co Ltd ($1335) | 36.5% | 36.4% | 37.8% | 39.6% | |
| Jin Cai Holdings Co Ltd ($1250) | 39.6% | 36.6% | 39.1% | 37.7% | |
| China For You Group Co Ltd ($572) | 18.7% | 12.4% | | 34.6% | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 30.2% | 34.3% | 36.5% | 32.8% | |
| |
|---|
| Median (17 companies) | 18.6% | 19.9% | 20.3% | 22.3% | 37.5% |
|---|
| Starlite Holdings Ltd ($403) | 17.2% | 17.5% | 19.0% | 20.4% | 18.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sheen Tai Holdings Grp Co Ltd ($1335) | 35.5% | 31.9% | 32.2% | 32.1% | |
| Jin Cai Holdings Co Ltd ($1250) | 35.7% | 33.2% | 26.1% | 27.6% | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 25.5% | 27.9% | 30.7% | 27.4% | |
| Huaxi Holdings Co Ltd ($1689) | 7.8% | 14.5% | 21.2% | 27.1% | 29.1% |
| Greatview Aseptic Packaging Co Ltd ($468) | 24.1% | 25.9% | 23.1% | 21.6% | |
| |
|---|
| Median (18 companies) | 11.5% | 13.2% | 13.9% | 13.5% | 29.1% |
|---|
| Starlite Holdings Ltd ($403) | 7.2% | 5.9% | 7.0% | 6.9% | 5.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Aluminum Cans Holdings Ltd ($6898) | 1.3% | 6.9% | 9.5% | 20.7% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 13.5% | 19.7% | 13.7% | 13.1% | |
| Hao Tian Development Group Ltd ($474) | 88.2% | 81.6% | | 13.0% | |
| CPMC Holdings Ltd ($906) | 13.7% | 16.7% | 19.7% | 8.6% | |
| Jin Bao Bao Holdings Ltd ($1239) | 3.8% | 5.2% | 3.3% | 8.3% | |
| |
|---|
| Median (18 companies) | 5.6% | 7.9% | 5.1% | 4.1% | 2.6% |
|---|
| Starlite Holdings Ltd ($403) | 3.4% | 5.1% | 3.2% | 5.7% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaxi Holdings Co Ltd ($1689) | | 21.4% | 28.5% | 26.2% | 23.6% |
| Sheen Tai Holdings Grp Co Ltd ($1335) | 32.5% | 26.8% | 26.2% | 24.7% | |
| China Aluminum Cans Holdings Ltd ($6898) | 14.8% | 19.7% | 14.6% | 20.2% | |
| Greatview Aseptic Packaging Co Ltd ($468) | 19.6% | 20.2% | 18.9% | 15.7% | |
| Jin Cai Holdings Co Ltd ($1250) | 38.7% | 35.3% | 18.4% | 15.4% | |
| |
|---|
| Median (18 companies) | 11.3% | 7.9% | 6.7% | 6.3% | 23.6% |
|---|
| Starlite Holdings Ltd ($403) | 5.7% | 1.6% | 3.9% | 4.1% | 3.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 4.0x | 6.2x | 6.4x | 7.8x | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 0.7x | 9.4x | 6.7x | 7.4x | |
| Sino Haijing Holdings Ltd ($1106) | 4.7x | 6.4x | 6.1x | 6.2x | |
| Come Sure Group Holdings Ltd ($794) | -1.1x | 3.6x | 4.1x | 3.8x | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 2.5x | 4.1x | 3.5x | 3.4x | |
| |
|---|
| Median (17 companies) | 0.7x | 1.1x | 0.6x | 0.7x | -1.0x |
|---|
| Starlite Holdings Ltd ($403) | 0.4x | 0.5x | 0.6x | 0.3x | 0.5x |
