Easyknit International Holdings Ltd reports 9,506% CAPEX growth and 65.7% Revenue growth
26/06/2015 • About Easyknit International Holdings Ltd (
$1218) • By InTwits
Easyknit International 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: 28.8% in FY2015, 24.3% in FY2014, 26.5% in FY2013, 12.5% in FY2012, 115.9% in FY2011
- Easyknit International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 39.8%. At the same time it's a lot of higher than industry average of 50.1%.
- CAPEX is quite volatile: 297 in FY2015, 3.1 in FY2014, 271 in FY2013, 165 in FY2012, 0.016 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Easyknit International Holdings Ltd ($1218) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 40.0 | 203.6 | 524.4 | 275.8 | 457.0 | 65.7% |
| Gross Profit | 37.9 | 87.4 | 207.0 | 139.5 | 202.0 | 44.8% |
| SG&A | | 40.4 | 80.0 | 81.0 | 72.8 | -10.1% |
| EBITDA | 46.3 | 25.4 | 139.1 | 66.9 | 131.5 | 96.5% |
| Net Income | 389.3 | 101.2 | 647.0 | 13.0 | 202.9 | 1,456.2% |
Balance Sheet
|
|---|
| Cash | 73.9 | 403.4 | 340.9 | 601.1 | 378.5 | -37.0% |
| Short Term Debt | 0.0 | 21.0 | 30.9 | 34.6 | 902.8 | 2,509.0% |
| Long Term Debt | 0.0 | 361.5 | 724.7 | 1,706.6 | 635.1 | -62.8% |
Cash flow
|
|---|
| Capex | 0.0 | 164.9 | 271.2 | 3.1 | 296.6 | 9,505.8% |
Ratios
|
|---|
| Revenue growth | 13.3% | 409.1% | 157.6% | -47.4% | 65.7% | |
| EBITDA growth | -15.0% | -45.2% | 447.5% | -51.9% | 96.5% | |
| Gross Margin | 94.8% | 42.9% | 39.5% | 50.6% | 44.2% | -6.4% |
| EBITDA Margin | 115.9% | 12.5% | 26.5% | 24.3% | 28.8% | 4.5% |
| Net Income Margin | 973.6% | 49.7% | 123.4% | 4.7% | 44.4% | 39.7% |
| SG&A, % of revenue | | 19.8% | 15.3% | 29.4% | 15.9% | -13.4% |
| CAPEX, % of revenue | 0.0% | 81.0% | 51.7% | 1.1% | 64.9% | 63.8% |
| ROIC | 2.4% | 1.0% | 4.0% | 1.4% | 2.4% | 1.0% |
| ROE | 21.8% | 4.8% | 25.8% | 0.5% | 7.1% | 6.6% |
| Net Debt/EBITDA | -1.6x | -0.8x | 3.0x | 17.0x | 8.8x | -8.2x |
Revenue and profitability
Easyknit International Holdings Ltd's Revenue jumped on 65.7% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.5 pp from 24.3% to 28.8% in FY2015.
Gross Margin decreased on 6.4 pp from 50.6% to 44.2% in FY2015. SG&A as a % of Revenue dropped on 13.4 pp from 29.4% to 15.9% in FY2015.
Net Income marign jumped on 39.7 pp from 4.7% to 44.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Easyknit International Holdings Ltd's CAPEX/Revenue was 64.9% in FY2015. Easyknit International Holdings Ltd's CAPEX/Revenue dropped on 16.1 pp from 81.0% in FY2012 to 64.9% in FY2015. It's average CAPEX/Revenue for the last three years was 39.2%.To fuel this fast growth the company made large investments to CAPEX (226% of EBITDA).
Return on investment
The company operates at low ROIC (2.42%) and ROE (7.12%). ROIC increased slightly on 1.0 pp from 1.4% to 2.4% in FY2015. ROE increased on 6.6 pp from 0.48% to 7.1% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.8x and Debt / EBITDA is 11.7x. Net Debt / EBITDA dropped on 8.2x from 17.0x to 8.8x in FY2015. Debt dropped on 11.7% in FY2015 while cash dropped on 37.0% in FY2015.
Appendix 1: Peers in Real Estate
Below we provide Easyknit International Holdings Ltd benchmarking against other companies in Real Estate 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 |
|---|
| Common Splendor International Health Industry Group Ltd ($286) | -0.9% | -0.5% | 1.9% | 4,120.2% | |
| Landsea Green Properties Co Ltd ($106) | -91.1% | -35.1% | -51.2% | 3,097.3% | |
| LVGEM China Real Estate Invest ($95) | -0.1% | -27.5% | -21.9% | 3,008.3% | |
| Rivera Holdings Ltd ($281) | 222.2% | 197.1% | -89.9% | 2,067.2% | |
| Ceneric Holdings Ltd ($542) | -94.0% | -73.9% | -49.8% | 1,922.5% | |
| |
|---|
| Median (172 companies) | 15.0% | 15.2% | 12.4% | 5.1% | 1.7% |
|---|
| Easyknit International Holdings Ltd ($1218) | | 409.1% | 157.6% | -47.4% | 65.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tern Properties Co Ltd ($277) | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% |
| GR Properties Ltd ($108) | 37.4% | 39.3% | | 98.2% | |
| Renhe Commercial Holdings Co Ltd ($1387) | 71.1% | 79.0% | 95.2% | 97.9% | |
| YT Realty Group Ltd ($75) | 91.5% | 94.4% | 96.6% | 96.7% | |
| ITC Properties Group Ltd ($199) | 29.8% | 22.8% | 92.9% | 95.2% | |
| |
|---|
| Median (154 companies) | 43.4% | 41.9% | 41.1% | 38.9% | 53.1% |
|---|
| Easyknit International Holdings Ltd ($1218) | 94.8% | 42.9% | 39.5% | 50.6% | 44.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ITC Properties Group Ltd ($199) | 24.0% | -125.5% | -2,995.7% | 1,685.3% | |
| Beijing Properties Holdings Ltd ($925) | 33.2% | -606.3% | 2,162.6% | 224.3% | |
| Chinese Estates Holdings Ltd ($127) | 340.9% | 356.2% | 91.6% | 195.5% | |
| Zall Development Group Ltd ($2098) | 73.6% | 105.3% | 133.1% | 143.2% | |
| Ceneric Holdings Ltd ($542) | -5.9% | -382.7% | -1,024.0% | 126.8% | |
| |
|---|
| Median (172 companies) | 35.2% | 28.9% | 28.1% | 26.9% | 26.9% |
|---|
| Easyknit International Holdings Ltd ($1218) | 115.9% | 12.5% | 26.5% | 24.3% | 28.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 0.0% | 18.0% | 27,965.5% | |
| ITC Properties Group Ltd ($199) | 25.6% | 56.2% | 4,202.4% | 1,304.7% | |
| Wanda Hotel Development Co Ltd ($169) | | 5.9% | 24.1% | 1,091.1% | |
| Pacific Century Premium Developments Ltd ($432) | 6.5% | 2.9% | 323.1% | 351.2% | |
| Liu Chong Hing Investment Ltd ($194) | 9.4% | 18.5% | 6.1% | 269.7% | |
| |
|---|
| Median (173 companies) | 6.0% | 5.3% | 6.1% | 4.7% | 3.0% |
|---|
| Easyknit International Holdings Ltd ($1218) | 0.0% | 81.0% | 51.7% | 1.1% | 64.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rykadan Capital Ltd ($2288) | 17.2% | -1.8% | -2.6% | 48.4% | -3.7% |
| LVGEM China Real Estate Invest ($95) | 0.2% | -0.2% | -1.1% | 22.1% | |
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | |
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | |
| Hong Kong Ferry Holdings Co Ltd ($50) | 4.7% | 3.8% | 0.6% | 18.0% | |
| |
|---|
| Median (176 companies) | 4.6% | 4.0% | 3.8% | 3.8% | 2.2% |
|---|
| Easyknit International Holdings Ltd ($1218) | 2.4% | 1.0% | 4.0% | 1.4% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Properties Group Ltd ($1838) | 16.9x | 43.0x | 21.4x | 1,523.0x | |
| SRE Group Ltd ($1207) | 10.6x | 14.1x | 24.7x | 1,184.6x | |
| Cheuk Nang Holdings Ltd ($131) | 53.2x | | 177.3x | 901.7x | |
| Tian An China Investment Co Ltd ($28) | 2.4x | 13.2x | 15.1x | 486.6x | |
| Greenland Hong Kong Holdings Ltd ($337) | 3.7x | | 6.2x | 49.3x | |
| |
|---|
| Median (139 companies) | 2.1x | 2.4x | 2.7x | 3.0x | 1.1x |
|---|
| Easyknit International Holdings Ltd ($1218) | -1.6x | -0.8x | 3.0x | 17.0x | 8.8x |
