National Electronic Hldgs EBITDA surged on 775% in 2015 and Revenue surged on 22.3%
28/06/2015 • About National Electronic Hldgs (
$213) • By InTwits
National Electronic Hldgs reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.8% in FY2015, 1.4% in FY2014, 3.0% in FY2013, 3.8% in FY2012, 2.0% in FY2011
- National Electronic Hldgs has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.7%. At the same time it's a lot of higher than industry average of 5.8%.
- CAPEX is quite volatile: 712 in FY2015, 83.5 in FY2014, 211 in FY2013, 44.6 in FY2012, 189 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.4%
- It operates with high leverage: Net Debt/EBITDA is 19.9x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
National Electronic Hldgs ($213) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,265 | 1,295 | 1,168 | 1,171 | 1,432 | 22.3% |
| Gross Profit | 151 | 189 | 178 | 162 | 237 | 46.6% |
| SG&A | | 192 | 191 | 222 | 162 | -27.0% |
| EBITDA | 25 | 50 | 35 | 16 | 141 | 774.9% |
| Net Income | 284 | 171 | 296 | 228 | 133 | -41.8% |
Balance Sheet
|
|---|
| Cash | 175 | 283 | 616 | 646 | 440 | -31.9% |
| Short Term Debt | 634 | 714 | 602 | 552 | 715 | 29.4% |
| Long Term Debt | 609 | 381 | 1,080 | 1,462 | 2,526 | 72.8% |
Cash flow
|
|---|
| Capex | 189 | 45 | 211 | 83 | 712 | 753.4% |
Ratios
|
|---|
| Revenue growth | 13.6% | 2.3% | -9.8% | 0.3% | 22.3% | |
| EBITDA growth | -42.0% | 100.3% | -29.0% | -54.4% | 774.9% | |
| Gross Margin | 11.9% | 14.6% | 15.2% | 13.8% | 16.6% | 2.7% |
| EBITDA Margin | 2.0% | 3.8% | 3.0% | 1.4% | 9.8% | 8.5% |
| Net Income Margin | 22.4% | 13.2% | 25.4% | 19.5% | 9.3% | -10.2% |
| SG&A, % of revenue | | 14.8% | 16.4% | 18.9% | 11.3% | -7.6% |
| CAPEX, % of revenue | 14.9% | 3.4% | 18.1% | 7.1% | 49.7% | 42.6% |
| ROIC | -0.4% | 0.9% | 0.2% | -0.6% | 2.4% | 3.0% |
| ROE | 27.6% | 13.1% | 19.9% | 13.8% | 7.7% | -6.1% |
| Net Debt/EBITDA | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x | -65.0x |
Revenue and profitability
The company's Revenue jumped on 22.3% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.5 pp from 1.4% to 9.8% in FY2015.
Gross Margin increased on 2.7 pp from 13.8% to 16.6% in FY2015. SG&A as a % of Revenue decreased on 7.6 pp from 18.9% to 11.3% in FY2015.
Net Income marign dropped on 10.2 pp from 19.5% to 9.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
National Electronic Hldgs's CAPEX/Revenue was 49.7% in FY2015. National Electronic Hldgs showed fast CAPEX/Revenue growth of 46.3 pp from 3.4% in FY2012 to 49.7% in FY2015. For the last three years the average CAPEX/Revenue was 25.0%.National Electronic Hldgs has spent a lot to CAPEX (505% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (2.40%) and ROE (7.67%). ROIC increased on 3.0 pp from -0.65% to 2.4% in FY2015. ROE decreased on 6.1 pp from 13.8% to 7.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 19.9x and Debt / EBITDA is 23.0x. Net Debt / EBITDA dropped on 65.0x from 84.8x to 19.9x in FY2015. Debt jumped on 60.9% in FY2015 while cash dropped on 31.9% in FY2015.
Appendix 1: Peers in Electronics
Below we provide National Electronic Hldgs benchmarking against other companies in Electronics 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 |
|---|
| China Netcom Technology Holdings Ltd ($8071) | -22.0% | 11.6% | -23.0% | 104.1% | |
| Technovator International Ltd ($1206) | 31.6% | 27.4% | 34.1% | 35.9% | |
| Tongda Group Holdings Ltd ($698) | 34.0% | 8.3% | 6.4% | 32.1% | |
| Advanced Card Systems Holdings Ltd ($8210) | 25.3% | 36.9% | 20.8% | 26.7% | |
| Alltronics Holdings Ltd ($833) | 33.9% | -1.6% | -1.6% | 23.4% | |
| |
|---|
| Median (48 companies) | 7.6% | -1.7% | 3.6% | 5.0% | 6.1% |
|---|
| National Electronic Hldgs ($213) | | 2.3% | -9.8% | 0.3% | 22.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | |
| TeleEye Holdings Ltd ($8051) | 51.6% | 44.0% | 42.1% | 38.5% | |
| Wasion Group Holdings Ltd ($3393) | 30.3% | 32.8% | 35.1% | 34.2% | |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | |
| |
|---|
| Median (46 companies) | 15.0% | 14.1% | 13.8% | 14.1% | 13.0% |
|---|
| National Electronic Hldgs ($213) | 11.9% | 14.6% | 15.2% | 13.8% | 16.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | |
| Nanjing Sample Technology Co Ltd ($1708) | 31.5% | 26.8% | 21.1% | 22.3% | |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | |
| Technovator International Ltd ($1206) | 19.2% | 19.0% | 19.0% | 20.8% | |
| Trigiant Group Ltd ($1300) | 17.0% | 17.6% | 18.2% | 18.5% | |
| |
|---|
| Median (48 companies) | 9.3% | 7.4% | 6.0% | 4.6% | 3.3% |
|---|
| National Electronic Hldgs ($213) | 2.0% | 3.8% | 3.0% | 1.4% | 9.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AKM Industrial Co Ltd ($1639) | 7.4% | 5.0% | 17.4% | 25.2% | |
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | |
| Tech Pro Technology Development Ltd ($3823) | 32.8% | 7.6% | 13.1% | 15.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 3.7% | 23.9% | 15.5% | 12.0% | |
| |
|---|
| Median (48 companies) | 3.3% | 3.7% | 3.0% | 3.7% | 1.4% |
|---|
| National Electronic Hldgs ($213) | 14.9% | 3.4% | 18.1% | 7.1% | 49.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | |
| Advanced Card Systems Holdings Ltd ($8210) | 15.5% | 26.7% | 24.7% | 20.2% | |
| Alltronics Holdings Ltd ($833) | 19.3% | 13.1% | 15.2% | 19.8% | |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | |
| Trigiant Group Ltd ($1300) | 17.9% | 17.8% | 18.3% | 15.2% | |
| |
|---|
| Median (48 companies) | 5.9% | 4.3% | 3.5% | 3.0% | 4.7% |
|---|
| National Electronic Hldgs ($213) | -0.4% | 0.9% | 0.2% | -0.6% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino-Tech International Holdings Ltd ($724) | | | 15.7x | 24.7x | |
| Eyang Holdings Group Co Ltd ($117) | 4.2x | 3.3x | 3.7x | 17.9x | |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.8x | 2.2x | 2.6x | 5.7x | 5.4x |
| Pine Technology Holdings Ltd ($1079) | | 8.0x | 3.3x | 4.9x | |
| |
|---|
| Median (34 companies) | 0.6x | 1.0x | 1.1x | 1.0x | -0.2x |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
