Heng Fai Enterprises Ltd CAPEX surged on 176% in 2015 and Revenue surged on 86.7%
26/06/2015 • About Heng Fai Enterprises Ltd (
$185) • By InTwits
Heng Fai Enterprises Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Heng Fai Enterprises Ltd doesn't have a profitable business model yet: FY2015 ROIC is -5.0%
- The company operates at negative EBITDA Margin: -85.5%
- Heng Fai Enterprises 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 -105.5%0
- Heng Fai Enterprises Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 213.5%. At the same time it's a lot of higher than industry average of 51.0%.
- CAPEX is quite volatile: 278 in FY2015, 101 in FY2014, 43.7 in FY2013, 3.9 in FY2012, 164 in FY2011
- The company has unprofitable business model: ROIC is at -5.0%
- It operates with high leverage: Net Debt/EBITDA is 32.6x while industry average is 5.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Heng Fai Enterprises Ltd ($185) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 75.321 | 81.529 | 56.634 | 32.483 | 60.661 | 86.7% |
| Gross Profit | 67.269 | 72.583 | 50.677 | 18.951 | 45.318 | 139.1% |
| SG&A | | | | 69.513 | 99.417 | 43.0% |
| EBITDA | -61.225 | -94.789 | -66.922 | -48.678 | -51.876 | 6.6% |
| Net Income | 45.417 | -188.271 | 33.375 | -43.503 | -54.920 | 26.2% |
Balance Sheet
|
|---|
| Cash | 185.071 | 116.333 | 353.385 | 102.732 | 47.087 | -54.2% |
| Short Term Debt | 303.249 | 156.166 | 195.503 | 165.784 | 210.769 | 27.1% |
| Long Term Debt | 433.205 | 970.557 | 61.986 | 35.970 | 189.498 | 426.8% |
Cash flow
|
|---|
| Capex | 163.799 | 3.874 | 43.683 | 100.702 | 277.873 | 175.9% |
Ratios
|
|---|
| Revenue growth | -2.2% | 8.2% | -30.5% | -42.6% | 86.7% | |
| EBITDA growth | -310.7% | 54.8% | -29.4% | -27.3% | 6.6% | |
| Gross Margin | 89.3% | 89.0% | 89.5% | 58.3% | 74.7% | 16.4% |
| EBITDA Margin | -81.3% | -116.3% | -118.2% | -149.9% | -85.5% | 64.3% |
| Net Income Margin | 60.3% | -230.9% | 58.9% | -133.9% | -90.5% | 43.4% |
| SG&A, % of revenue | | | | 214.0% | 163.9% | -50.1% |
| CAPEX, % of revenue | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% | 148.1% |
| ROIC | -4.7% | -5.2% | -4.3% | -4.6% | -5.0% | -0.4% |
| ROE | 5.5% | -22.3% | 3.9% | -5.0% | -7.0% | -2.0% |
Revenue and profitability
Heng Fai Enterprises Ltd's Revenue surged on 86.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 38.0 pp from -70.9% to -33.0% in 2015.
Gross Margin surged on 16.4 pp from 58.3% to 74.7% in FY2015. SG&A as a % of Revenue dropped on 50.1 pp from 214% to 164% in FY2015.
Net Income marign jumped on 43.4 pp from -134% to -90.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 458%. CAPEX/Revenue surged on 453 pp from 4.8% in FY2012 to 458% in FY2015. It's average CAPEX/Revenue for the last three years was 282%.
Return on investment
The company operates at negative ROIC (-4.98%) and ROE (-6.98%). ROIC showed almost no change in FY2015. ROE decreased slightly on 2.0 pp from -5.0% to -7.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 32.6x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt surged on 98.4% in FY2015 while cash dropped on 54.2% in FY2015.
Appendix 1: Peers in Holding Companies-Divers
Below we provide Heng Fai Enterprises Ltd benchmarking against other companies in Holding Companies-Divers 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 |
|---|
| Kong Sun Holdings Ltd ($295) | -18.7% | -88.3% | 5.1% | 7,067.0% | |
| Goldin Properties Holdings Ltd ($283) | | | 126.0% | 2,065.8% | -79.6% |
| China Primary Energy Holdings Ltd ($8117) | -43.1% | -56.3% | -23.6% | 195.4% | |
| Carnival Group International Holdings Ltd ($996) | | | | 159.1% | |
| 21 Holdings Ltd ($1003) | 20.3% | -57.4% | -12.4% | 106.4% | |
| |
|---|
| Median (42 companies) | 13.3% | 12.2% | 4.9% | 15.7% | 0.5% |
|---|
| Heng Fai Enterprises Ltd ($185) | | 8.2% | -30.5% | -42.6% | 86.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Multifield International Holdings Ltd ($898) | 66.4% | 87.5% | 84.7% | 89.1% | |
| New Century Group Hong Kong Ltd ($234) | 76.7% | 27.3% | 85.2% | 82.8% | 91.5% |
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
| China Renji Medical Group Ltd/Hong Kong ($648) | 54.9% | 70.0% | 67.3% | 78.6% | |
| Century Legend Holdings Ltd ($79) | 68.5% | 70.1% | 72.3% | 71.0% | |
| |
|---|
| Median (39 companies) | 27.9% | 32.9% | 34.6% | 30.8% | 42.2% |
|---|
| Heng Fai Enterprises Ltd ($185) | 89.3% | 89.0% | 89.5% | 58.3% | 74.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
| Multifield International Holdings Ltd ($898) | 49.8% | 80.1% | 68.3% | 97.5% | |
| New Century Group Hong Kong Ltd ($234) | 82.5% | -5.5% | 78.8% | 58.3% | 85.0% |
| Magnificent Estates ($201) | 42.1% | 45.5% | 47.8% | 53.0% | |
| China Merchants Holdings International Co Ltd ($144) | 63.7% | 56.4% | 50.8% | 45.2% | |
| |
|---|
| Median (44 companies) | 6.3% | 2.8% | 2.8% | 7.4% | 13.3% |
|---|
| Heng Fai Enterprises Ltd ($185) | -81.3% | -116.3% | -118.2% | -149.9% | -85.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Far East Holdings International Ltd ($36) | 2.7% | 0.1% | 13.2% | 422.1% | |
| China Investments Holdings Ltd ($132) | 20.7% | 4.8% | 81.9% | 382.2% | |
| New Century Group Hong Kong Ltd ($234) | 1.0% | 97.2% | 1.0% | 142.7% | 32.2% |
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% |
| Emperor International Holdings Ltd ($163) | 93.5% | 100.9% | 48.5% | 105.9% | 110.6% |
| |
|---|
| Median (44 companies) | 4.1% | 2.2% | 3.6% | 6.1% | 32.2% |
|---|
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wisdom Holdings Group ($1661) | 62.7% | 68.6% | 42.1% | 28.8% | |
| Chinney Alliance Group Ltd ($385) | 3.4% | 6.4% | 8.1% | 13.6% | |
| Hutchison Whampoa Ltd ($13) | 3.3% | 3.7% | 4.2% | 8.1% | |
| Code Agriculture Holdings Ltd ($8153) | -0.1% | 2.4% | -3.3% | 7.9% | |
| C C Land Holdings Ltd ($1224) | 4.5% | 7.4% | 5.3% | 7.9% | |
| |
|---|
| Median (44 companies) | 0.6% | 0.1% | 0.2% | 0.8% | 2.1% |
|---|
| Heng Fai Enterprises Ltd ($185) | -4.7% | -5.2% | -4.3% | -4.6% | -5.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x |
| Carnival Group International Holdings Ltd ($996) | | | | 23.7x | |
| Van Shung Chong Holdings Ltd ($1001) | 3.4x | | 0.9x | 12.3x | 7.7x |
| Southeast Asia Properties & Finance Ltd ($252) | 6.8x | 6.7x | 5.7x | 9.2x | 4.3x |
| Code Agriculture Holdings Ltd ($8153) | 24.3x | 11.9x | 42.8x | 8.7x | |
| |
|---|
| Median (27 companies) | 3.0x | 2.5x | 3.1x | 3.0x | 7.2x |
|---|
