Van Shung Chong Holdings Ltd reports 108% Net Income growth and 1.1 pp EBITDA Margin growth from 2.5% to 3.7%
26/06/2015 • About Van Shung Chong Holdings Ltd (
$1001) • By InTwits
Van Shung Chong 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: 3.7% in FY2015, 2.5% in FY2014, 3.5% in FY2013, -0.4% in FY2012, 0.8% in FY2011
- Van Shung Chong Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 5.1%
- It operates with high leverage: Net Debt/EBITDA is 7.7x 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.
Van Shung Chong Holdings Ltd ($1001) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,208 | 4,432 | 3,761 | 3,849 | 3,868 | 0.5% |
| Gross Profit | 189 | 171 | 355 | 370 | 390 | 5.3% |
| SG&A | | | 207 | 288 | 193 | -33.0% |
| EBITDA | 34 | -19 | 133 | 97 | 142 | 45.6% |
| Net Income | 31 | 6 | 72 | 104 | 216 | 107.8% |
Balance Sheet
|
|---|
| Cash | 486 | 267 | 460 | 371 | 355 | -4.2% |
| Short Term Debt | 600 | 654 | 581 | 1,010 | 883 | -12.6% |
| Long Term Debt | 0 | 0 | 0 | 562 | 566 | 0.7% |
Cash flow
|
|---|
| Capex | 22 | 6 | 24 | 5 | 48 | 895.3% |
Ratios
|
|---|
| Revenue growth | 29.4% | 5.3% | -15.2% | 2.4% | 0.5% | |
| EBITDA growth | -80.0% | -154.9% | -817.1% | -27.0% | 45.6% | |
| Gross Margin | 4.5% | 3.9% | 9.4% | 9.6% | 10.1% | 0.5% |
| EBITDA Margin | 0.8% | -0.4% | 3.5% | 2.5% | 3.7% | 1.1% |
| Net Income Margin | 0.7% | 0.1% | 1.9% | 2.7% | 5.6% | 2.9% |
| SG&A, % of revenue | | | 5.5% | 7.5% | 5.0% | -2.5% |
| CAPEX, % of revenue | 0.5% | 0.1% | 0.6% | 0.1% | 1.2% | 1.1% |
| ROIC | 2.3% | -2.0% | 9.6% | 4.8% | 5.1% | 0.3% |
| ROE | 4.9% | 1.0% | 10.4% | 13.9% | 23.3% | 9.4% |
| Net Debt/EBITDA | 3.4x | | 0.9x | 12.3x | 7.7x | -4.6x |
Revenue and profitability
Van Shung Chong Holdings Ltd's Revenue showed almost no change in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 24.5 pp from 33.5% to 58.0% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue decreased on 2.5 pp from 7.5% to 5.0% in FY2015.
Net Income marign increased on 2.9 pp from 2.7% to 5.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 1.2%. CAPEX/Revenue increased slightly on 1.1 pp from 0.14% in FY2012 to 1.2% in FY2015. Average CAPEX/Revenue for the last three years was 0.67%.
Return on investment
The company operates at good ROE (23.27%) while ROIC is low (5.09%). ROIC showed almost no change in FY2015. ROE increased on 9.4 pp from 13.9% to 23.3% in FY2015.
Leverage (Debt)
Debt level is 7.7x Net Debt / EBITDA and 10.2x Debt / EBITDA. Net Debt / EBITDA dropped on 4.6x from 12.3x to 7.7x in FY2015. Debt decreased on 7.8% in FY2015 while cash decreased on 4.2% in FY2015.
Appendix 1: Peers in Holding Companies-Divers
Below you can find Van Shung Chong Holdings Ltd benchmarking vs. other companies in Holding Companies-Divers 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 |
|---|
| 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% | 19.4% |
|---|
| Van Shung Chong Holdings Ltd ($1001) | | 5.3% | -15.2% | 2.4% | 0.5% |
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) | 29.5% | 33.4% | 36.0% | 34.4% | 57.0% |
|---|
| Van Shung Chong Holdings Ltd ($1001) | 4.5% | 3.9% | 9.4% | 9.6% | 10.1% |
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% | 1.9% | 7.4% | 13.3% |
|---|
| Van Shung Chong Holdings Ltd ($1001) | 0.8% | -0.4% | 3.5% | 2.5% | 3.7% |
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% | |
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% |
| 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% |
| |
|---|
| Median (44 companies) | 4.9% | 2.7% | 3.8% | 7.0% | 69.2% |
|---|
| Van Shung Chong Holdings Ltd ($1001) | 0.5% | 0.1% | 0.6% | 0.1% | 1.2% |
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) | 0.3% | 0.1% | -0.2% | 0.5% | 2.0% |
|---|
| Van Shung Chong Holdings Ltd ($1001) | 2.3% | -2.0% | 9.6% | 4.8% | 5.1% |
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 | |
| 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 | |
| China Renji Medical Group Ltd/Hong Kong ($648) | 0.7x | -0.3x | -0.1x | 6.2x | |
| |
|---|
| Median (26 companies) | 2.7x | 2.5x | 3.1x | 2.9x | 5.8x |
|---|
| Van Shung Chong Holdings Ltd ($1001) | 3.4x | | 0.9x | 12.3x | 7.7x |
