HKC International Holdings Ltd revenue decline accelerated from 1.9% in FY2014 to 16.5% in FY2015
26/06/2015 • About HKC International Holdings Ltd (
$248) • By InTwits
HKC International Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HKC International Holdings Ltd is a company in decline: FY2015 revenue growth was -16.5%, 5 years revenue CAGR was -24.1%
- The company operates at negative EBITDA Margin: -1.9%
- HKC International Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -2.4% for the sames years0
- HKC International Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 3.7%.
- CAPEX is quite volatile: 1.1 in FY2015, 29.9 in FY2014, 2.1 in FY2013, 19.8 in FY2012, 8.8 in FY2011
- The company has unprofitable business model: ROIC is at -2.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HKC International Holdings Ltd ($248) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 940.0 | 361.7 | 268.2 | 263.1 | 219.7 | -16.5% |
| Gross Profit | 101.2 | 66.4 | 67.3 | 50.9 | 48.9 | -3.8% |
| SG&A | | | 90.1 | 72.0 | 57.4 | -20.3% |
| EBITDA | 8.3 | -23.9 | -13.9 | -15.2 | -4.1 | -73.1% |
| Net Income | 33.3 | -6.6 | -5.7 | -12.2 | -3.7 | -69.9% |
Balance Sheet
|
|---|
| Cash | 33.4 | 45.7 | 42.8 | 12.2 | 5.5 | -55.0% |
| Short Term Debt | 34.5 | 38.2 | 40.6 | 50.2 | 65.8 | 31.0% |
| Long Term Debt | 0.1 | 0.0 | 0.1 | 0.0 | 0.0 | -44.2% |
Cash flow
|
|---|
| Capex | 8.8 | 19.8 | 2.1 | 29.9 | 1.1 | -96.4% |
Ratios
|
|---|
| Revenue growth | 8.0% | -61.5% | -25.8% | -1.9% | -16.5% | |
| EBITDA growth | -468.7% | -389.7% | -42.1% | 9.6% | -73.1% | |
| Gross Margin | 10.8% | 18.3% | 25.1% | 19.3% | 22.3% | 2.9% |
| EBITDA Margin | 0.9% | -6.6% | -5.2% | -5.8% | -1.9% | 3.9% |
| Net Income Margin | 3.5% | -1.8% | -2.1% | -4.6% | -1.7% | 3.0% |
| SG&A, % of revenue | | | 33.6% | 27.4% | 26.1% | -1.3% |
| CAPEX, % of revenue | 0.9% | 5.5% | 0.8% | 11.4% | 0.5% | -10.9% |
| ROIC | 0.6% | -8.7% | -5.9% | -5.7% | -2.1% | 3.5% |
| ROE | 12.5% | -2.2% | -1.9% | -4.1% | -1.2% | 2.8% |
| Net Debt/EBITDA | 0.1x | | | | | 0.0x |
Revenue and profitability
HKC International Holdings Ltd's Revenue dropped on 16.5% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from -5.8% to -1.9% in FY2015.
Gross Margin increased on 2.9 pp from 19.3% to 22.3% in FY2015. SG&A as a % of Revenue decreased slightly on 1.3 pp from 27.4% to 26.1% in FY2015.
Net Income marign increased on 3.0 pp from -4.6% to -1.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
HKC International Holdings Ltd's CAPEX/Revenue was 0.49% in FY2015. HKC International Holdings Ltd's CAPEX/Revenue decreased on 5.0 pp from 5.5% in FY2012 to 0.49% in FY2015. For the last three years the average CAPEX/Revenue was 4.2%.
Return on investment
The company operates at negative ROIC (-2.10%) and ROE (-1.23%). ROIC increased on 3.5 pp from -5.7% to -2.1% in FY2015. ROE increased on 2.8 pp from -4.1% to -1.2% in FY2015.
Leverage (Debt)
Debt level is 0.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt surged on 31.0% in FY2015 while cash dropped on 55.0% in FY2015.
Appendix 1: Peers in Distribution/Wholesale
Below you can find HKC International Holdings Ltd benchmarking vs. other companies in Distribution/Wholesale 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 |
|---|
| Forefront Group Ltd ($885) | | | 504.6% | 3,871.0% | |
| China LNG Group Ltd ($931) | -84.5% | 694.8% | 13.6% | 1,341.3% | |
| Sheng Yuan Holdings Ltd ($851) | 571.1% | -86.1% | 756.9% | 567.2% | |
| China Infrastructure Investment Ltd ($600) | 346.9% | 412.1% | -50.9% | 557.9% | |
| China-Hongkong Photo Products Holdings Ltd ($1123) | | 24.9% | 9.0% | 81.2% | 12.2% |
| |
|---|
| Median (37 companies) | 19.3% | 3.1% | 2.1% | 1.4% | 6.1% |
|---|
| HKC International Holdings Ltd ($248) | | -61.5% | -25.8% | -1.9% | -16.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | 67.0% | 75.3% | 71.7% | 74.8% | |
| Forefront Group Ltd ($885) | | | | 69.8% | |
| YGM Trading Ltd ($375) | 67.1% | 66.5% | 67.4% | 64.0% | 62.5% |
| Goldlion Holdings Ltd ($533) | 57.3% | 56.4% | 54.1% | 55.7% | |
| Sincere Watch Hong Kong Ltd ($444) | 34.2% | 35.6% | 39.7% | 38.8% | 38.3% |
| |
|---|
| Median (33 companies) | 16.4% | 17.3% | 17.1% | 18.0% | 32.6% |
|---|
| HKC International Holdings Ltd ($248) | 10.8% | 18.3% | 25.1% | 19.3% | 22.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | -134.6% | 163.7% | 613.4% | 285.7% | |
| China LNG Group Ltd ($931) | 195.2% | 95.1% | 76.4% | 97.9% | |
| Forefront Group Ltd ($885) | | -2,113.8% | -803.1% | 57.7% | |
| China Infrastructure Investment Ltd ($600) | -1,171.2% | -274.9% | 120.0% | 52.0% | |
| GA Holdings Ltd ($8126) | -4.5% | 8.0% | 19.7% | 22.9% | |
| |
|---|
| Median (37 companies) | 2.9% | 2.6% | 2.5% | 4.6% | 4.5% |
|---|
| HKC International Holdings Ltd ($248) | 0.9% | -6.6% | -5.2% | -5.8% | -1.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| C Y Foundation Group Ltd ($1182) | 9.8% | 2.5% | 5.2% | 82.2% | 9.3% |
| Inspur International Ltd ($596) | 0.9% | 8.4% | 12.2% | 33.6% | |
| SIS International Holdings ($529) | 0.2% | 13.4% | 31.8% | 14.8% | |
| Tan Chong International Ltd ($693) | 7.6% | 6.0% | 7.6% | 7.0% | |
| Victory Group Ltd ($1139) | | 0.7% | 0.1% | 6.1% | |
| |
|---|
| Median (36 companies) | 1.5% | 1.3% | 1.8% | 1.6% | 2.7% |
|---|
| HKC International Holdings Ltd ($248) | 0.9% | 5.5% | 0.8% | 11.4% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China LNG Group Ltd ($931) | 2.2% | 8.4% | 7.4% | 87.0% | |
| Yestar International Holdings Co Ltd ($2393) | 29.4% | 28.8% | 24.1% | 26.2% | |
| Powerwell Pacific Holdings Ltd ($8265) | 27.8% | 6.4% | 6.4% | 23.6% | |
| Forefront Group Ltd ($885) | -37.7% | -4.9% | -11.0% | 19.5% | |
| Sincere Watch Hong Kong Ltd ($444) | 46.4% | 51.7% | 27.7% | 14.6% | 5.5% |
| |
|---|
| Median (38 companies) | 2.9% | 2.7% | 1.7% | 3.2% | 2.6% |
|---|
| HKC International Holdings Ltd ($248) | 0.6% | -8.7% | -5.9% | -5.7% | -2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sheng Yuan Holdings Ltd ($851) | | | | 19.3x | |
| Takson Holdings Ltd ($918) | | | 11.5x | 11.7x | |
| Huiyin Household Appliances Holdings Co Ltd ($1280) | 10.1x | | | 10.9x | |
| Pacific Andes International Holdings Ltd ($1174) | 4.9x | 5.1x | 9.1x | 7.8x | |
| SIS International Holdings ($529) | -62.1x | -1.8x | 7.0x | 7.2x | |
| |
|---|
| Median (27 companies) | -0.4x | -0.2x | -0.6x | -0.0x | -2.2x |
|---|
