Quali-Smart Holdings Ltd reports 46.7% EBITDA decline and 2.4 pp EBITDA Margin decline from 4.9% to 2.4%
30/06/2015 • About Quali-Smart Holdings Ltd (
$1348) • By InTwits
Quali-Smart Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Quali-Smart Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is -0.3%
- EBITDA Margin is declining: 2.4% in FY2015 vs. 4.9% in FY2014 vs. 5.1% in FY2011
- Quali-Smart Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 3.8%.
- CAPEX is quite volatile: 24.8 in FY2015, 98.2 in FY2014, 17.3 in FY2013, 13.2 in FY2012, 12.4 in FY2011
- The company has unprofitable business model: ROIC is at -0.3%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Quali-Smart Holdings Ltd ($1348) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 729.8 | 876.7 | 794.1 | 773.2 | 829.0 | 7.2% |
| Gross Profit | 79.1 | 99.4 | 97.6 | 87.3 | 87.3 | -0.0% |
| SG&A | | | 72.5 | 69.5 | 91.1 | 31.1% |
| EBITDA | 37.3 | 57.8 | 44.1 | 37.5 | 20.0 | -46.7% |
| Net Income | 9.5 | 47.7 | 22.7 | 20.2 | -3.7 | -118.4% |
Balance Sheet
|
|---|
| Cash | 12.2 | 40.5 | 80.4 | 75.2 | 67.2 | -10.7% |
| Short Term Debt | 55.3 | 76.2 | 50.9 | 68.1 | 52.8 | -22.5% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 40.4 | 104.9 | 159.6% |
Cash flow
|
|---|
| Capex | 12.4 | 13.2 | 17.3 | 98.2 | 24.8 | -74.8% |
Ratios
|
|---|
| Revenue growth | -9.2% | 20.1% | -9.4% | -2.6% | 7.2% | |
| EBITDA growth | -1.0% | 54.7% | -23.7% | -14.9% | -46.7% | |
| Gross Margin | 10.8% | 11.3% | 12.3% | 11.3% | 10.5% | -0.8% |
| EBITDA Margin | 5.1% | 6.6% | 5.6% | 4.9% | 2.4% | -2.4% |
| Net Income Margin | 1.3% | 5.4% | 2.9% | 2.6% | -0.4% | -3.1% |
| SG&A, % of revenue | | | 9.1% | 9.0% | 11.0% | 2.0% |
| CAPEX, % of revenue | 1.7% | 1.5% | 2.2% | 12.7% | 3.0% | -9.7% |
| ROIC | 24.2% | 31.3% | 16.2% | 9.1% | -0.3% | -9.4% |
| ROE | 12.7% | 53.0% | 15.0% | 9.8% | -1.5% | -11.3% |
| Net Debt/EBITDA | 1.2x | 0.6x | -0.7x | 0.9x | 4.5x | 3.6x |
Revenue and profitability
Quali-Smart Holdings Ltd's Revenue increased on 7.2% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 4.9% to 2.4% in FY2015.
Gross Margin decreased slightly on 0.76 pp from 11.3% to 10.5% in FY2015. SG&A as a % of Revenue increased slightly on 2.0 pp from 9.0% to 11.0% in FY2015.
Net Income marign decreased on 3.1 pp from 2.6% to -0.45% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Quali-Smart Holdings Ltd's CAPEX/Revenue was 3.0% in FY2015. Quali-Smart Holdings Ltd's CAPEX/Revenue increased slightly on 1.5 pp from 1.5% in FY2012 to 3.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 6.0%.The company maintained rich investment policy and has spent a lot to CAPEX (124% of EBITDA).
Return on investment
The company operates at negative ROIC (-0.35%) and ROE (-1.46%). ROIC decreased on 9.4 pp from 9.1% to -0.35% in FY2015. ROE dropped on 11.3 pp from 9.8% to -1.5% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.5x and Debt / EBITDA is 7.9x. Net Debt / EBITDA surged on 3.6x from 0.9x to 4.5x in FY2015. Debt jumped on 45.3% in FY2015 while cash dropped on 10.7% in FY2015.
Appendix 1: Peers in Toys/Games/Hobbies
Below we provide Quali-Smart Holdings Ltd benchmarking against other companies in Toys/Games/Hobbies 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 |
|---|
| Kiu Hung International Holdings Ltd ($381) | -0.8% | 4.5% | -11.9% | 34.8% | |
| Playmates Toys Ltd ($869) | -69.7% | 726.8% | 346.3% | 30.2% | |
| Playmates Holdings Ltd ($635) | -38.2% | 200.7% | 283.5% | 27.5% | |
| Dream International Ltd ($1126) | -29.9% | 24.9% | -0.1% | 21.0% | |
| Leyou Technologies Holdings Ltd ($1089) | 4.7% | 18.8% | 32.3% | 17.7% | |
| |
|---|
| Median (9 companies) | -9.8% | 4.5% | 17.5% | 17.7% | 17.1% |
|---|
| Quali-Smart Holdings Ltd ($1348) | | 20.1% | -9.4% | -2.6% | 7.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Holdings Ltd ($635) | 68.1% | 65.7% | 66.1% | 64.7% | |
| Playmates Toys Ltd ($869) | 28.6% | 60.3% | 62.8% | 61.9% | |
| Matrix Holdings Ltd ($1005) | 35.2% | 34.3% | 37.1% | 38.4% | |
| Kiu Hung International Holdings Ltd ($381) | 20.8% | 30.9% | 29.0% | 32.1% | |
| Dream International Ltd ($1126) | 24.3% | 25.6% | 29.1% | 22.4% | |
| |
|---|
| Median (8 companies) | 22.5% | 28.2% | 29.1% | 27.3% | 12.4% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 10.8% | 11.3% | 12.3% | 11.3% | 10.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Holdings Ltd ($635) | -14.7% | 22.0% | 36.7% | 33.5% | |
| Playmates Toys Ltd ($869) | -186.4% | 15.1% | 33.0% | 30.2% | |
| Matrix Holdings Ltd ($1005) | 11.0% | 10.2% | 13.2% | 15.0% | |
| Dream International Ltd ($1126) | 10.3% | 13.2% | 14.8% | 9.8% | |
| Kin Yat Holdings Ltd ($638) | 12.3% | 4.8% | 8.4% | 8.8% | 8.6% |
| |
|---|
| Median (9 companies) | 8.9% | 9.8% | 8.4% | 8.8% | 8.6% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 5.1% | 6.6% | 5.6% | 4.9% | 2.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dream International Ltd ($1126) | 2.6% | 2.9% | 3.8% | 11.2% | |
| Kin Yat Holdings Ltd ($638) | 7.9% | 9.8% | 4.6% | 7.5% | 4.8% |
| Green International Holdings Ltd ($2700) | 0.1% | 0.2% | 3.2% | 6.5% | |
| Kader Holdings Co Ltd ($180) | 4.0% | 3.5% | 3.7% | 2.8% | |
| Matrix Holdings Ltd ($1005) | 5.8% | 4.7% | 3.2% | 2.8% | |
| |
|---|
| Median (9 companies) | 5.8% | 4.7% | 3.7% | 2.8% | 4.8% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 1.7% | 1.5% | 2.2% | 12.7% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Toys Ltd ($869) | -48.9% | 30.7% | 121.1% | 73.0% | |
| Matrix Holdings Ltd ($1005) | 5.8% | 5.9% | 13.1% | 18.6% | |
| Dream International Ltd ($1126) | 12.4% | 19.3% | 19.4% | 13.3% | |
| Playmates Holdings Ltd ($635) | -1.0% | 2.4% | 12.6% | 12.0% | |
| Kin Yat Holdings Ltd ($638) | 11.4% | -0.7% | 4.5% | 4.9% | 6.2% |
| |
|---|
| Median (9 companies) | 2.4% | 2.4% | 4.5% | 4.9% | 6.2% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 24.2% | 31.3% | 16.2% | 9.1% | -0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kader Holdings Co Ltd ($180) | | | | 9.6x | |
| Leyou Technologies Holdings Ltd ($1089) | -1.4x | 1.1x | 4.4x | 3.8x | |
| Kin Yat Holdings Ltd ($638) | 0.0x | 1.6x | 0.3x | 0.4x | -0.0x |
| Matrix Holdings Ltd ($1005) | 0.5x | 0.6x | 0.0x | -0.2x | |
| Playmates Holdings Ltd ($635) | | 0.6x | -0.4x | -1.0x | |
| |
|---|
| Median (7 companies) | 0.0x | 0.6x | -0.2x | -0.2x | -0.0x |
|---|
| Quali-Smart Holdings Ltd ($1348) | 1.2x | 0.6x | -0.7x | 0.9x | 4.5x |
