Wai Chun Group Holdings Ltd revenue returned to growth in FY2015: increased 9.3% vs. 2.7% decline a year earliner
25/06/2015 • About Wai Chun Group Holdings Ltd (
$1013) • By InTwits
Wai Chun Group Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wai Chun Group Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is -68.9%
- The company operates at negative EBITDA Margin: -19.9%
- Wai Chun Group Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -19.3%0
- Wai Chun Group Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's a lot of higher than industry average of 0.7%.
- CAPEX is quite volatile: 0.41 in FY2015, 1.9 in FY2014, 1.3 in FY2013, 1.2 in FY2012, 11.9 in FY2011
- The company has unprofitable business model: ROIC is at -68.9%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is -4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wai Chun Group Holdings Ltd ($1013) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 88.9 | 140.6 | 143.3 | 139.4 | 152.5 | 9.3% |
| Gross Profit | 13.6 | 18.6 | 21.6 | 21.1 | 29.7 | 41.0% |
| SG&A | | | 43.6 | 69.0 | 62.4 | -9.6% |
| EBITDA | -18.2 | -19.4 | -13.3 | -46.9 | -30.3 | -35.4% |
| Net Income | -15.1 | -27.0 | -10.9 | -39.1 | -29.1 | -25.6% |
Balance Sheet
|
|---|
| Cash | 12.1 | 24.0 | 4.9 | 14.5 | 3.6 | -75.0% |
| Short Term Debt | 2.7 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 15.3 | 28.4 | 0.0 | 0.8 | |
Cash flow
|
|---|
| Capex | 11.9 | 1.2 | 1.3 | 1.9 | 0.4 | -78.7% |
Ratios
|
|---|
| Revenue growth | 6.8% | 58.2% | 1.9% | -2.7% | 9.3% | |
| EBITDA growth | -36.2% | 6.6% | -31.6% | 254.2% | -35.4% | |
| Gross Margin | 15.4% | 13.2% | 15.1% | 15.1% | 19.5% | 4.4% |
| EBITDA Margin | -20.4% | -13.8% | -9.2% | -33.7% | -19.9% | 13.8% |
| Net Income Margin | -17.0% | -19.2% | -7.6% | -28.1% | -19.1% | 9.0% |
| SG&A, % of revenue | | | 30.4% | 49.5% | 40.9% | -8.6% |
| CAPEX, % of revenue | 13.4% | 0.8% | 0.9% | 1.4% | 0.3% | -1.1% |
| ROIC | -22.5% | -31.9% | -18.6% | -59.1% | -68.9% | -9.8% |
Revenue and profitability
Wai Chun Group Holdings Ltd's Revenue increased on 9.3% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 13.8 pp from -33.7% to -19.9% in FY2015.
Gross Margin increased on 4.4 pp from 15.1% to 19.5% in FY2015. SG&A as a % of Revenue decreased on 8.6 pp from 49.5% to 40.9% in FY2015.
Net Income marign increased on 9.0 pp from -28.1% to -19.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Wai Chun Group Holdings Ltd had CAPEX/Revenue of 0.27%. Wai Chun Group Holdings Ltd's CAPEX/Revenue decreased slightly on 0.56 pp from 0.83% in FY2012 to 0.27% in FY2015. It's average level of CAPEX/Revenue for the last three years was 0.85%.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt jumped while cash dropped on 75.0% in FY2015.
Appendix 1: Peers in Computers
Below we provide Wai Chun Group Holdings Ltd benchmarking against other companies in Computers 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 |
|---|
| Peking University Resources Holdings Co Ltd ($618) | 16.2% | -49.6% | 11.2% | 106.0% | |
| Alibaba Health Information Technology Ltd ($241) | 29.4% | 29.4% | -96.7% | 73.0% | |
| Thiz Technology Group Ltd ($8119) | 136.4% | -4.1% | -95.1% | 72.2% | |
| Universal Technologies Holdings Ltd ($1026) | 95.5% | -47.3% | 49.8% | 67.1% | |
| PAX Global Technology Ltd ($327) | 52.5% | 19.0% | 12.1% | 61.2% | |
| |
|---|
| Median (24 companies) | 14.0% | 3.8% | -1.8% | 11.0% | -8.2% |
|---|
| Wai Chun Group Holdings Ltd ($1013) | | 58.2% | 1.9% | -2.7% | 9.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Universal Technologies Holdings Ltd ($1026) | 86.0% | 87.3% | 79.7% | 90.3% | |
| Thiz Technology Group Ltd ($8119) | 2.9% | 8.8% | 63.8% | 86.2% | |
| Computer & Technologies Holdings Ltd ($46) | 27.4% | 45.3% | 54.0% | 52.1% | |
| CCID Consulting Co Ltd ($8235) | 46.5% | 43.7% | 49.1% | 51.8% | |
| Alibaba Health Information Technology Ltd ($241) | 10.1% | 11.4% | -12.6% | 49.3% | |
| |
|---|
| Median (22 companies) | 11.0% | 13.7% | 17.0% | 17.2% | 17.0% |
|---|
| Wai Chun Group Holdings Ltd ($1013) | 15.4% | 13.2% | 15.1% | 15.1% | 19.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Computer & Technologies Holdings Ltd ($46) | 4.8% | 12.9% | 19.9% | 20.1% | |
| Ju Teng International Holdings Ltd ($3336) | 9.5% | 15.1% | 19.9% | 19.3% | |
| PAX Global Technology Ltd ($327) | 18.9% | 16.5% | 17.4% | 18.8% | |
| CCID Consulting Co Ltd ($8235) | 19.0% | 10.6% | 10.8% | 12.3% | |
| Universal Technologies Holdings Ltd ($1026) | 29.5% | 12.8% | 1.5% | 9.9% | |
| |
|---|
| Median (24 companies) | 3.0% | 3.2% | 2.7% | 1.8% | -13.5% |
|---|
| Wai Chun Group Holdings Ltd ($1013) | -20.4% | -13.8% | -9.2% | -33.7% | -19.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| North Asia Resources Holdings Ltd ($61) | 34.3% | 4.6% | 94.2% | 177.8% | |
| Beautiful China Holdings Co Ltd ($706) | 44.9% | 8.4% | 2.2% | 26.2% | |
| Ju Teng International Holdings Ltd ($3336) | 17.6% | 14.1% | 18.7% | 20.0% | |
| Alibaba Health Information Technology Ltd ($241) | 2.1% | 4.4% | 46.3% | 17.2% | |
| Universal Technologies Holdings Ltd ($1026) | 8.5% | 20.0% | 5.7% | 14.2% | |
| |
|---|
| Median (24 companies) | 1.3% | 1.2% | 1.6% | 2.1% | 2.1% |
|---|
| Wai Chun Group Holdings Ltd ($1013) | 13.4% | 0.8% | 0.9% | 1.4% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lenovo Group Ltd ($992) | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% |
| PAX Global Technology Ltd ($327) | 14.1% | 12.3% | 12.8% | 18.7% | |
| CCID Consulting Co Ltd ($8235) | 20.6% | 11.3% | 10.7% | 10.2% | |
| TPV Technology Ltd ($903) | 6.4% | 7.7% | 1.8% | 10.1% | |
| Computer & Technologies Holdings Ltd ($46) | 4.1% | 6.0% | 8.6% | 9.4% | |
| |
|---|
| Median (25 companies) | 3.9% | 2.1% | 1.4% | -0.1% | -1.7% |
|---|
| Wai Chun Group Holdings Ltd ($1013) | -22.5% | -31.9% | -18.6% | -59.1% | -68.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVOC Intelligent Technology Co Ltd ($2308) | 6.4x | 0.5x | 5.8x | 5.7x | |
| Powerleader Science & Technology Group Ltd ($8236) | 2.0x | 2.7x | 3.6x | 4.6x | |
| Ju Teng International Holdings Ltd ($3336) | 2.5x | 2.1x | 1.8x | 1.7x | |
| Wong's International Hldgs ($99) | -1.8x | -3.5x | 2.7x | 1.4x | |
| TPV Technology Ltd ($903) | 0.5x | -0.2x | 0.6x | -0.0x | |
| |
|---|
| Median (13 companies) | -1.7x | -2.3x | -1.8x | -3.9x | 0.1x |
|---|
