Chun Wo Development Holdings Ltd Net Debt / EBITDA surged on 3.3x from 12.6x to 15.9x in 2015 and Debt increased on 7.1%
26/06/2015 • About Chun Wo Development Holdings Ltd (
$711) • By InTwits
Chun Wo Development 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: 1.5% in FY2015, 2.0% in FY2014, 3.8% in FY2013, 2.3% in FY2012, -1.1% in FY2011
- Chun Wo Development Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has potentially unprofitable business model: ROIC is at 2.7%
- It operates with high leverage: Net Debt/EBITDA is 15.9x while industry average is 5.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chun Wo Development Holdings Ltd ($711) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,002 | 3,193 | 4,892 | 6,551 | 8,317 | 27.0% |
| Gross Profit | 187 | 229 | 440 | 415 | 471 | 13.6% |
| SG&A | | 238 | 305 | 314 | 359 | 14.5% |
| EBITDA | -33 | 74 | 184 | 130 | 122 | -6.4% |
| Net Income | -55 | 52 | 78 | 93 | 103 | 10.2% |
Balance Sheet
|
|---|
| Cash | 605 | 415 | 608 | 821 | 703 | -14.4% |
| Short Term Debt | 1,335 | 1,258 | 1,747 | 2,199 | 2,320 | 5.5% |
| Long Term Debt | 45 | 213 | 359 | 260 | 313 | 20.5% |
Cash flow
|
|---|
| Capex | 48 | 10 | 43 | 60 | 39 | -35.2% |
Ratios
|
|---|
| Revenue growth | 15.2% | 6.4% | 53.2% | 33.9% | 27.0% | |
| EBITDA growth | 124.8% | -323.1% | 149.6% | -29.5% | -6.4% | |
| Gross Margin | 6.2% | 7.2% | 9.0% | 6.3% | 5.7% | -0.7% |
| EBITDA Margin | -1.1% | 2.3% | 3.8% | 2.0% | 1.5% | -0.5% |
| Net Income Margin | -1.8% | 1.6% | 1.6% | 1.4% | 1.2% | -0.2% |
| SG&A, % of revenue | | 7.5% | 6.2% | 4.8% | 4.3% | -0.5% |
| CAPEX, % of revenue | 1.6% | 0.3% | 0.9% | 0.9% | 0.5% | -0.5% |
| ROIC | -1.4% | 2.3% | 5.0% | 3.1% | 2.7% | -0.4% |
| ROE | -4.1% | 3.7% | 5.2% | 5.9% | 6.4% | 0.5% |
| Net Debt/EBITDA | | 14.3x | 8.1x | 12.6x | 15.9x | 3.3x |
Revenue and profitability
The company's Revenue surged on 27.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 30.7% to 34.2% in 2015.
Gross Margin decreased slightly on 0.66 pp from 6.3% to 5.7% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.47% in FY2015. Chun Wo Development Holdings Ltd's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 0.76%.
Return on investment
The company operates at low ROIC (2.73%) and ROE (6.35%). ROIC showed almost no change in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 15.9x and Debt / EBITDA is 21.6x. Net Debt / EBITDA surged on 3.3x from 12.6x to 15.9x in FY2015. Debt increased on 7.1% in FY2015 while cash dropped on 14.4% in FY2015.
Appendix 1: Peers in Engineering&Construction
Below you can find Chun Wo Development 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 (40 companies) | 14.0% | 11.5% | 21.0% | 11.3% | 14.3% |
|---|
| Chun Wo Development Holdings Ltd ($711) | | 6.4% | 53.2% | 33.9% | 27.0% |
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 (35 companies) | 11.0% | 12.4% | 12.1% | 12.9% | 15.6% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 6.2% | 7.2% | 9.0% | 6.3% | 5.7% |
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 (41 companies) | 8.5% | 9.2% | 7.8% | 6.8% | 6.2% |
|---|
| Chun Wo Development Holdings Ltd ($711) | -1.1% | 2.3% | 3.8% | 2.0% | 1.5% |
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% | 9.6% |
| |
|---|
| Median (41 companies) | 4.7% | 2.5% | 3.5% | 2.6% | 2.4% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 1.6% | 0.3% | 0.9% | 0.9% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| Ngai Shun Holdings Ltd ($1246) | | 68.8% | 77.2% | 45.2% | 31.0% |
| 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% |
| |
|---|
| Median (42 companies) | 7.0% | 5.8% | 5.3% | 4.1% | 2.9% |
|---|
| Chun Wo Development Holdings Ltd ($711) | -1.4% | 2.3% | 5.0% | 3.1% | 2.7% |
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 |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | |
| Huayu Expressway Group Ltd ($1823) | | 20.6x | 10.8x | 9.4x | |
| |
|---|
| Median (34 companies) | 0.7x | 1.5x | 1.7x | 2.4x | 3.4x |
|---|
| Chun Wo Development Holdings Ltd ($711) | | 14.3x | 8.1x | 12.6x | 15.9x |
