China Fortune Financial Group Ltd revenue dropped on 11.8% in 2015 and EBITDA Margin dropped on 46.3 pp from -63.4% to -110%
26/06/2015 • About China Fortune Financial Group Ltd (
$290) • By InTwits
China Fortune Financial Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Fortune Financial Group Ltd is a company in decline: FY2015 revenue growth was -11.8%, 5 years revenue CAGR was -10.9%
- The company operates at negative EBITDA Margin: -109.6%
- China Fortune Financial Group 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 -51.0%0
- China Fortune Financial Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.1%. At the same time it's a lot of higher than industry average of 7.5%.
- CAPEX is quite volatile: 2.1 in FY2015, 0.20 in FY2014, 4.2 in FY2013, 10.8 in FY2012, 6.5 in FY2011
- The company has unprofitable business model: ROIC is at -11.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Fortune Financial Group Ltd ($290) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 75.311 | 47.354 | 46.810 | 51.140 | 45.083 | -11.8% |
| Gross Profit | 65.278 | 43.284 | 43.872 | 46.864 | 40.110 | -14.4% |
| SG&A | | | 41.160 | 36.889 | 39.202 | 6.3% |
| EBITDA | 3.864 | -24.073 | -33.478 | -32.415 | -49.432 | 52.5% |
| Net Income | -65.370 | -69.602 | -69.002 | -15.254 | -156.732 | 927.5% |
Balance Sheet
|
|---|
| Cash | 44.747 | 107.484 | 104.131 | 206.365 | 187.067 | -9.4% |
| Short Term Debt | 108.488 | 85.752 | 52.954 | 41.242 | 81.413 | 97.4% |
| Long Term Debt | 76.743 | 40.046 | 67.230 | 76.040 | 98.493 | 29.5% |
Cash flow
|
|---|
| Capex | 6.456 | 10.793 | 4.174 | 0.202 | 2.083 | 931.2% |
Ratios
|
|---|
| Revenue growth | -6.4% | -37.1% | -1.1% | 9.3% | -11.8% | |
| EBITDA growth | -38.0% | -723.0% | 39.1% | -3.2% | 52.5% | |
| Gross Margin | 86.7% | 91.4% | 93.7% | 91.6% | 89.0% | -2.7% |
| EBITDA Margin | 5.1% | -50.8% | -71.5% | -63.4% | -109.6% | -46.3% |
| Net Income Margin | -86.8% | -147.0% | -147.4% | -29.8% | -347.7% | -317.8% |
| SG&A, % of revenue | | | 87.9% | 72.1% | 87.0% | 14.8% |
| CAPEX, % of revenue | 8.6% | 22.8% | 8.9% | 0.4% | 4.6% | 4.2% |
| ROIC | -0.7% | -5.5% | -7.3% | -7.5% | -11.3% | -3.8% |
| ROE | -28.1% | -20.7% | -20.9% | -5.0% | -67.5% | -62.5% |
| Net Debt/EBITDA | 36.4x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 11.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 28.4 pp from -16.7% to 11.7% in FY2015.
Gross Margin decreased on 2.7 pp from 91.6% to 89.0% in FY2015. SG&A as a % of Revenue jumped on 14.8 pp from 72.1% to 87.0% in FY2015.
Net Income marign dropped on 318 pp from -29.8% to -348% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 4.6%. The company showed big decline in CAPEX/Revenue of 18.2 pp from 22.8% in FY2012 to 4.6% in FY2015. It's average CAPEX/Revenue for the last three years was 4.6%.
Return on investment
The company operates at negative ROIC (-11.32%) and ROE (-67.52%). ROIC decreased on 3.8 pp from -7.5% to -11.3% in FY2015. ROE dropped on 62.5 pp from -5.0% to -67.5% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -88.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt surged on 53.4% in FY2015 while cash decreased on 9.4% in FY2015.
Appendix 1: Peers in Diversified Finan Serv
Below we provide China Fortune Financial Group Ltd benchmarking against other companies in Diversified Finan Serv 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 New Energy Power Group Ltd ($1041) | | 100.0% | 0.0% | 64,246.0% | |
| ReOrient Group Ltd ($376) | 63.3% | 112.8% | 75.1% | 1,106.9% | |
| Global Strategic Group Ltd ($8007) | 2.2% | -3.9% | 2.1% | 806.3% | |
| AID Partners Capital Holdings Ltd ($8088) | -38.7% | 0.9% | -79.5% | 655.2% | |
| Willie International Holdings Ltd ($273) | | | | 543.9% | |
| |
|---|
| Median (62 companies) | 5.7% | 1.2% | 14.7% | 26.5% | 24.9% |
|---|
| China Fortune Financial Group Ltd ($290) | | -37.1% | -1.1% | 9.3% | -11.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Roma Group Ltd ($8072) | | | | 99.4% | 98.7% |
| Freeman Financial Corp Ltd ($279) | 97.1% | 52.3% | 99.3% | 98.5% | |
| Chinese Strategic Holdings Ltd ($8089) | 97.9% | 99.1% | 97.9% | 97.0% | |
| First China Financial Network Holdings Ltd ($8123) | 98.6% | 93.4% | | 94.5% | |
| Allied Group Ltd ($373) | 94.5% | 95.1% | 94.4% | 93.6% | |
| |
|---|
| Median (12 companies) | 75.0% | 57.7% | 72.7% | 81.8% | 94.3% |
|---|
| China Fortune Financial Group Ltd ($290) | 86.7% | 91.4% | 93.7% | 91.6% | 89.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Styland Holdings Ltd ($211) | 68.6% | 198.6% | 91.5% | 161.0% | 17.9% |
| Roma Group Ltd ($8072) | 81.4% | 18.1% | 36.8% | 143.0% | 44.7% |
| First China Financial Network Holdings Ltd ($8123) | -231.6% | -329.2% | -211.2% | 124.3% | |
| Willie International Holdings Ltd ($273) | | | 75.3% | 95.2% | |
| Get Nice Holdings Ltd ($64) | 28.4% | 2.6% | 153.4% | 92.7% | 83.9% |
| |
|---|
| Median (63 companies) | 30.3% | 16.4% | 36.2% | 47.2% | 44.7% |
|---|
| China Fortune Financial Group Ltd ($290) | 5.1% | -50.8% | -71.5% | -63.4% | -109.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gemini Investments Holdings Ltd ($174) | 14.9% | 479.1% | 37.3% | 216.0% | |
| China Assurance Finance Group Ltd ($8090) | | 94.7% | 68.9% | 53.3% | |
| Chinese Strategic Holdings Ltd ($8089) | 93.2% | 376.0% | 5.7% | 32.6% | |
| AID Partners Capital Holdings Ltd ($8088) | 196.3% | 4.1% | 2.9% | 28.4% | |
| Asian Capital Holdings Ltd ($8295) | 2.3% | 0.1% | 0.2% | 15.6% | |
| |
|---|
| Median (63 companies) | 2.2% | 1.8% | 1.7% | 1.1% | 1.2% |
|---|
| China Fortune Financial Group Ltd ($290) | 8.6% | 22.8% | 8.9% | 0.4% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ReOrient Group Ltd ($376) | -24.9% | -45.6% | -53.5% | 128.6% | |
| Roma Group Ltd ($8072) | | 19.6% | 43.7% | 107.8% | 13.3% |
| Convoy Financial Holdings Ltd ($1019) | 31.1% | 3.4% | 39.3% | 47.3% | |
| Willie International Holdings Ltd ($273) | -28.1% | -9.5% | 4.7% | 30.9% | |
| Value Partners Group Ltd ($806) | 8.7% | 16.8% | 16.5% | 26.8% | |
| |
|---|
| Median (65 companies) | 4.9% | 3.9% | 4.0% | 4.8% | 3.6% |
|---|
| China Fortune Financial Group Ltd ($290) | -0.7% | -5.5% | -7.3% | -7.5% | -11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cash Financial Services Group Ltd ($510) | -1.1x | 7.8x | | 67.5x | |
| Far East Horizon Ltd ($3360) | 17.8x | 16.9x | 21.7x | 20.0x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 7.3x | 2.1x | 10.3x | 9.3x | 39.3x |
| China Cinda Asset Management Co Ltd ($1359) | 2.1x | 5.0x | 7.7x | 8.4x | |
| Aeon Credit Service Asia Co Ltd ($900) | 6.3x | 5.2x | 6.0x | 6.9x | 5.5x |
| |
|---|
| Median (46 companies) | -1.1x | -1.0x | 0.1x | -0.0x | 0.6x |
|---|
