Synertone Communication Corp reports 97.0% EBITDA growth and 2.1 pp EBITDA Margin growth from 49.4% to 51.5%
01/07/2015 • About Synertone Communication Corp (
$1613) • By InTwits
Synertone Communication Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Synertone Communication Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.7%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 6.9 in FY2015, 27.6 in FY2014, 44.4 in FY2013, 2.1 in FY2012, 2.8 in FY2011
- The company has business model with low profitability: ROIC is at 8.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Synertone Communication Corp ($1613) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 218.8 | 218.3 | 115.7 | 174.4 | 329.7 | 89.0% |
| Gross Profit | 143.1 | 148.7 | 74.1 | 123.0 | 165.9 | 34.9% |
| SG&A | | | 43.5 | 84.6 | 75.9 | -10.3% |
| EBITDA | 108.4 | 97.9 | 56.1 | 86.2 | 169.9 | 97.0% |
| Net Income | 72.9 | 63.6 | 36.0 | 30.0 | 33.7 | 12.4% |
Balance Sheet
|
|---|
| Cash | 57.7 | 37.2 | 124.5 | 87.8 | 54.1 | -38.4% |
| Short Term Debt | 24.7 | 0.0 | 0.0 | 75.5 | 94.2 | 24.8% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 423.7 | 388.4 | -8.3% |
Cash flow
|
|---|
| Capex | 2.8 | 2.1 | 44.4 | 27.6 | 6.9 | -75.2% |
Ratios
|
|---|
| Revenue growth | 2.0% | -0.3% | -47.0% | 50.8% | 89.0% | |
| EBITDA growth | 12.5% | -9.6% | -42.7% | 53.8% | 97.0% | |
| Gross Margin | 65.4% | 68.1% | 64.1% | 70.5% | 50.3% | -20.2% |
| EBITDA Margin | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% | 2.1% |
| Net Income Margin | 33.3% | 29.1% | 31.1% | 17.2% | 10.2% | -7.0% |
| SG&A, % of revenue | | | 37.6% | 48.5% | 23.0% | -25.5% |
| CAPEX, % of revenue | 1.3% | 0.9% | 38.4% | 15.8% | 2.1% | -13.8% |
| ROIC | 56.9% | 38.8% | 17.6% | 7.4% | 8.7% | 1.3% |
| ROE | 59.1% | 34.7% | 14.9% | 8.4% | 7.1% | -1.4% |
| Net Debt/EBITDA | -0.3x | -0.4x | -2.2x | 4.8x | 2.5x | -2.2x |
Revenue and profitability
The company's Revenue jumped on 89.0% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 13.9 pp from 31.9% to 45.8% in 2015.
Gross Margin dropped on 20.2 pp from 70.5% to 50.3% in FY2015. SG&A as a % of Revenue dropped on 25.5 pp from 48.5% to 23.0% in FY2015.
Net Income marign decreased on 7.0 pp from 17.2% to 10.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.1% in FY2015. CAPEX/Revenue increased slightly on 1.1 pp from 0.94% in FY2012 to 2.1% in FY2015. For the last three years the average CAPEX/Revenue was 18.8%.
Return on investment
The company operates at low ROIC (8.69%) and ROE (7.07%). ROIC increased slightly on 1.3 pp from 7.4% to 8.7% in FY2015. ROE decreased slightly on 1.4 pp from 8.4% to 7.1% in FY2015.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 2.2x from 4.8x to 2.5x in FY2015. Debt decreased on 3.3% in FY2015 while cash dropped on 38.4% in FY2015.
Appendix 1: Peers in Telecommunications
Below we provide Synertone Communication Corp benchmarking against other companies in Telecommunications 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 Energine International Holdings Ltd ($1185) | -41.8% | 143.6% | 34.3% | 103.1% | |
| MOBI Development Co Ltd ($947) | -23.4% | -13.8% | 29.1% | 85.6% | |
| Vodatel Networks Holdings Ltd ($8033) | 34.4% | -5.9% | -4.6% | 81.7% | |
| Gold Tat Group International Ltd ($8266) | | 29.4% | 1,582.2% | 77.0% | 26.5% |
| Great World Co Holdings Ltd ($8003) | | 1,651.8% | -81.7% | 61.9% | -3.7% |
| |
|---|
| Median (49 companies) | 8.2% | 9.7% | 8.3% | 6.9% | 23.5% |
|---|
| Synertone Communication Corp ($1613) | | -0.3% | -47.0% | 50.8% | 89.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zhi Cheng Holdings Ltd ($8130) | 61.6% | 45.9% | 41.0% | 64.0% | 19.6% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | |
| Hong Kong Television Network Ltd ($1137) | | -59.6% | -101.3% | 59.7% | |
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | |
| HKT Trust & HKT Ltd ($6823) | 58.9% | 57.2% | 55.7% | 58.2% | |
| |
|---|
| Median (43 companies) | 29.9% | 26.1% | 28.1% | 27.1% | 26.0% |
|---|
| Synertone Communication Corp ($1613) | 65.4% | 68.1% | 64.1% | 70.5% | 50.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | |
| PCCW Ltd ($8) | 31.4% | 32.0% | 31.9% | 39.2% | |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | |
| HKT Trust & HKT Ltd ($6823) | 37.3% | 36.3% | 35.0% | 35.9% | |
| |
|---|
| Median (49 companies) | 14.2% | 9.9% | 6.7% | 7.9% | -39.2% |
|---|
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | |
| Hanny Holdings Ltd ($275) | 80.8% | 19.8% | 11.6% | 28.3% | 0.2% |
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| |
|---|
| Median (49 companies) | 3.4% | 2.9% | 3.7% | 3.6% | 0.9% |
|---|
| Synertone Communication Corp ($1613) | 1.3% | 0.9% | 38.4% | 15.8% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | |
| China Fiber Optic Network System Group Ltd ($3777) | 23.1% | 18.8% | 17.6% | 16.6% | |
| China U-Ton Holdings Ltd ($6168) | 69.5% | 35.7% | 25.0% | 16.2% | |
| |
|---|
| Median (49 companies) | 6.9% | 5.6% | 5.6% | 5.8% | -1.9% |
|---|
| Synertone Communication Corp ($1613) | 56.9% | 38.8% | 17.6% | 7.4% | 8.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | |
| CITIC Telecom International Holdings Ltd ($1883) | -0.3x | -0.2x | 3.5x | 3.4x | |
| |
|---|
| Median (35 companies) | -0.1x | -0.1x | 0.6x | 0.4x | -0.4x |
|---|
| Synertone Communication Corp ($1613) | -0.3x | -0.4x | -2.2x | 4.8x | 2.5x |
