Chinney Investments Ltd Net Debt / EBITDA jumped on 45.1x from 48.6x to 93.7x in 2015 while EBITDA dropped on 30.3%
25/06/2015 • About Chinney Investments Ltd (
$216) • By InTwits
Chinney Investments Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Chinney Investments Ltd is a company in decline: FY2015 revenue growth was -6.7%, 5 years revenue CAGR was -15.0%
- EBITDA Margin is quite volatile: 13.3% in FY2015, 17.8% in FY2014, 14.9% in FY2013, 22.4% in FY2012, 4.4% in FY2011
- Chinney Investments Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 100.2%. At the same time it's a lot of higher than industry average of 50.1%.
- CAPEX is quite volatile: 1,069 in FY2015, 552 in FY2014, 376 in FY2013, 186 in FY2012, 134 in FY2011
- The company has potentially unprofitable business model: ROIC is at 0.4%
- It operates with high leverage: Net Debt/EBITDA is 93.7x while industry average is 4.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chinney Investments Ltd ($216) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 355 | 1,059 | 363 | 496 | 463 | -6.7% |
| Gross Profit | 117 | 352 | 166 | 227 | 210 | -7.4% |
| SG&A | | 128 | 129 | 159 | 169 | 6.5% |
| EBITDA | 16 | 238 | 54 | 89 | 62 | -30.3% |
| Net Income | 263 | 128 | 243 | 256 | 1,284 | 400.5% |
Balance Sheet
|
|---|
| Cash | 724 | 546 | 221 | 453 | 229 | -49.3% |
| Short Term Debt | 930 | 1,009 | 1,402 | 2,025 | 3,070 | 51.6% |
| Long Term Debt | 1,542 | 1,981 | 2,264 | 2,733 | 2,946 | 7.8% |
Cash flow
|
|---|
| Capex | 134 | 186 | 376 | 552 | 1,069 | 93.5% |
Ratios
|
|---|
| Revenue growth | -66.0% | 198.4% | -65.7% | 36.6% | -6.7% | |
| EBITDA growth | -88.9% | 1,413.4% | -77.2% | 63.6% | -30.3% | |
| Gross Margin | 33.1% | 33.2% | 45.7% | 45.6% | 45.3% | -0.3% |
| EBITDA Margin | 4.4% | 22.4% | 14.9% | 17.8% | 13.3% | -4.5% |
| Net Income Margin | 74.2% | 12.1% | 66.8% | 51.7% | 277.3% | 225.7% |
| SG&A, % of revenue | | 12.1% | 35.4% | 32.0% | 36.5% | 4.5% |
| CAPEX, % of revenue | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% | 119.6% |
| ROIC | 0.1% | 2.9% | 0.5% | 0.7% | 0.4% | -0.3% |
| ROE | 11.8% | 5.0% | 8.5% | 7.7% | 29.8% | 22.1% |
| Net Debt/EBITDA | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x | 45.1x |
Revenue and profitability
Chinney Investments Ltd's Revenue decreased on 6.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 12.4 pp from 86.6% to 99.0% in FY2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue increased on 4.5 pp from 32.0% to 36.5% in FY2015.
Net Income marign jumped on 226 pp from 51.7% to 277% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Chinney Investments Ltd's CAPEX/Revenue was 231% in FY2015. Chinney Investments Ltd showed fast CAPEX/Revenue growth of 213 pp from 17.5% in FY2012 to 231% in FY2015. For the last three years the average CAPEX/Revenue was 149%.Battling declining revenue Chinney Investments Ltd made large investments to CAPEX (1,731% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at good ROE (29.80%) while ROIC is low (0.38%). ROIC showed almost no change in FY2015. ROE jumped on 22.1 pp from 7.7% to 29.8% in FY2015.
Leverage (Debt)
Debt level is 93.7x Net Debt / EBITDA and 97.4x Debt / EBITDA. Net Debt / EBITDA surged on 45.1x from 48.6x to 93.7x in FY2015. Debt surged on 26.4% in FY2015 while cash dropped on 49.3% in FY2015.
Appendix 1: Peers in Holding Companies-Divers
Below we provide Chinney Investments Ltd benchmarking against other companies in Holding Companies-Divers 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 |
|---|
| 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) | 11.7% | 11.4% | 4.9% | 12.6% | 6.5% |
|---|
| Chinney Investments Ltd ($216) | | 198.4% | -65.7% | 36.6% | -6.7% |
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% | |
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
| 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% | |
| |
|---|
| Median (39 companies) | 27.9% | 33.2% | 34.6% | 30.8% | 68.6% |
|---|
| Chinney Investments Ltd ($216) | 33.1% | 33.2% | 45.7% | 45.6% | 45.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
| 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% | |
| |
|---|
| Median (44 companies) | 6.3% | 1.7% | 1.9% | 5.6% | 36.3% |
|---|
| Chinney Investments Ltd ($216) | 4.4% | 22.4% | 14.9% | 17.8% | 13.3% |
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% | |
| Emperor International Holdings Ltd ($163) | 93.5% | 100.9% | 48.5% | 105.9% | 110.6% |
| |
|---|
| Median (44 companies) | 4.1% | 2.2% | 3.6% | 6.1% | 89.9% |
|---|
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% |
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) | 0.6% | -0.2% | -0.2% | 0.5% | 2.1% |
|---|
| Chinney Investments Ltd ($216) | 0.1% | 2.9% | 0.5% | 0.7% | 0.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | |
| China Renji Medical Group Ltd/Hong Kong ($648) | 0.7x | -0.3x | -0.1x | 6.2x | |
| |
|---|
| Median (26 companies) | 2.7x | 2.4x | 2.9x | 2.9x | 7.2x |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x |
