Daiwa Associate Holdings reports 89.9% EBITDA growth and 22.8 pp EBITDA Margin growth from 2.8% to 25.6%
01/07/2015 • About Daiwa Associate Holdings (
$1037) • By InTwits
Daiwa Associate Holdings reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Daiwa Associate Holdings is a company in decline: FY2015 revenue growth was -78.9%, 5 years revenue CAGR was -39.7%
- EBITDA Margin is quite volatile: 25.6% in FY2015, 2.8% in FY2014, 3.8% in FY2013, 2.4% in FY2012, 1.6% in FY2011
- Daiwa Associate Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 5.0 in FY2015, 4.2 in FY2014, 3.3 in FY2013, 21.2 in FY2012, 14.2 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Daiwa Associate Holdings ($1037) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,781 | 643 | 548 | 618 | 130 | -78.9% |
| Gross Profit | 154 | 70 | 69 | 88 | 24 | -72.8% |
| SG&A | | 59 | 54 | 81 | 20 | -75.6% |
| EBITDA | 28 | 15 | 21 | 18 | 33 | 89.9% |
| Net Income | 8 | 9 | -171 | 8 | -40 | -585.9% |
Balance Sheet
|
|---|
| Cash | 104 | 105 | 60 | 56 | 72 | 29.1% |
| Short Term Debt | 279 | 259 | 114 | 106 | 75 | -29.1% |
| Long Term Debt | 1 | 7 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 14 | 21 | 3 | 4 | 5 | 18.5% |
Ratios
|
|---|
| Revenue growth | 9.4% | -63.9% | -14.8% | 12.8% | -78.9% | |
| EBITDA growth | 210.3% | -45.3% | 33.8% | -15.0% | 89.9% | |
| Gross Margin | 8.7% | 11.0% | 12.5% | 14.2% | 18.3% | 4.1% |
| EBITDA Margin | 1.6% | 2.4% | 3.8% | 2.8% | 25.6% | 22.8% |
| Net Income Margin | 0.5% | 1.4% | -31.2% | 1.3% | -30.5% | -31.8% |
| SG&A, % of revenue | | 9.2% | 9.9% | 13.1% | 15.2% | 2.1% |
| CAPEX, % of revenue | 0.8% | 3.3% | 0.6% | 0.7% | 3.8% | 3.2% |
| ROIC | 2.2% | 0.2% | 1.0% | 2.7% | 1.2% | -1.5% |
| ROE | 2.2% | 2.3% | -57.9% | 3.6% | -18.7% | -22.3% |
| Net Debt/EBITDA | 6.2x | 10.4x | 2.6x | 2.8x | 0.1x | -2.7x |
Revenue and profitability
Daiwa Associate Holdings's Revenue dropped on 78.9% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 22.8 pp from 2.8% to 25.6% in FY2015.
Gross Margin increased on 4.1 pp from 14.2% to 18.3% in FY2015. SG&A as a % of Revenue increased on 2.1 pp from 13.1% to 15.2% in FY2015.
Net Income marign dropped on 31.8 pp from 1.3% to -30.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.8%. Daiwa Associate Holdings's CAPEX/Revenue increased slightly on 0.54 pp from 3.3% in FY2012 to 3.8% in FY2015. For the last three years the average CAPEX/Revenue was 1.7%.
Return on investment
The company operates at low but positive ROIC (1.24%) and negative ROE (-18.65%). ROIC decreased slightly on 1.5 pp from 2.7% to 1.2% in FY2015. ROE dropped on 22.3 pp from 3.6% to -18.7% in FY2015.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA dropped on 2.7x from 2.8x to 0.1x in FY2015. Debt dropped on 29.1% in FY2015 while cash jumped on 29.1% in FY2015.
Appendix 1: Peers in Electronics
Below we provide Daiwa Associate Holdings 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) | 7.3% | -1.0% | 3.6% | 3.7% | 7.0% |
|---|
| Daiwa Associate Holdings ($1037) | | -63.9% | -14.8% | 12.8% | -78.9% |
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% | 14.6% | 13.8% | 13.9% | 13.2% |
|---|
| Daiwa Associate Holdings ($1037) | 8.7% | 11.0% | 12.5% | 14.2% | 18.3% |
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% | 3.8% |
|---|
| Daiwa Associate Holdings ($1037) | 1.6% | 2.4% | 3.8% | 2.8% | 25.6% |
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) | 3.5% | 3.7% | 3.2% | 4.2% | 1.6% |
|---|
| Daiwa Associate Holdings ($1037) | 0.8% | 3.3% | 0.6% | 0.7% | 3.8% |
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% | 4.3% |
|---|
| Daiwa Associate Holdings ($1037) | 2.2% | 0.2% | 1.0% | 2.7% | 1.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
| 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 |
| |
|---|
| Median (34 companies) | 0.6x | 1.0x | 1.1x | 1.0x | 0.9x |
|---|
| Daiwa Associate Holdings ($1037) | 6.2x | 10.4x | 2.6x | 2.8x | 0.1x |
