Guoco Group Ltd reports 55.3% CAPEX growth while 4.6% Revenue decline
28/08/2015 • About Guoco Group Ltd (
$53) • By InTwits
Guoco Group 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: 30.5% in FY2015, 30.2% in FY2014, 38.1% in FY2013, -2.9% in FY2012, 36.0% in FY2011
- Guoco Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.4%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 2,207 in FY2015, 1,421 in FY2014, 776 in FY2013, 1,213 in FY2012, 8,349 in FY2011
- The company has potentially unprofitable business model: ROIC is at 4.7%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guoco Group Ltd ($53) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 9,057 | 10,514 | 21,932 | 24,926 | 23,783 | -4.6% |
| EBITDA | 3,263 | -306 | 8,360 | 7,535 | 7,252 | -3.8% |
| Net Income | 4,155 | -1,297 | 6,296 | 5,756 | 4,626 | -19.6% |
Balance Sheet
|
|---|
| Cash | 15,589 | 8,802 | 16,078 | 14,006 | 20,477 | 46.2% |
| Short Term Debt | 30,365 | 14,972 | 13,890 | 18,916 | 12,078 | -36.2% |
| Long Term Debt | 17,042 | 28,888 | 36,173 | 29,644 | 32,033 | 8.1% |
Cash flow
|
|---|
| Capex | 8,349 | 1,213 | 776 | 1,421 | 2,207 | 55.3% |
Ratios
|
|---|
| Revenue growth | 13.0% | 16.1% | 108.6% | 13.6% | -4.6% | |
| EBITDA growth | -1.7% | -109.4% | -2,833.9% | -9.9% | -3.8% | |
| EBITDA Margin | 36.0% | -2.9% | 38.1% | 30.2% | 30.5% | 0.3% |
| Net Income Margin | 45.9% | -12.3% | 28.7% | 23.1% | 19.4% | -3.6% |
| CAPEX, % of revenue | 92.2% | 11.5% | 3.5% | 5.7% | 9.3% | 3.6% |
| ROIC | 3.1% | -1.5% | 6.2% | 4.8% | 4.7% | -0.1% |
| ROE | 9.0% | -2.8% | 13.3% | 10.8% | 8.1% | -2.7% |
| Net Debt/EBITDA | 9.8x | | 4.1x | 4.6x | 3.3x | -1.3x |
Revenue and profitability
The company's Revenue decreased on 4.6% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 17.9 pp from 14.4% to -3.5% in 2015.
Net Income marign decreased on 3.6 pp from 23.1% to 19.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Guoco Group Ltd's CAPEX/Revenue was 9.3% in FY2015. The company's CAPEX/Revenue decreased on 2.3 pp from 11.5% in FY2012 to 9.3% in FY2015. It's average CAPEX/Revenue for the last three years was 6.2%.
Return on investment
The company operates at low ROIC (4.67%) and ROE (8.06%). ROIC showed almost no change in FY2015. ROE decreased on 2.7 pp from 10.8% to 8.1% in FY2015.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 6.1x Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 4.6x to 3.3x in FY2015. Debt decreased on 9.2% in FY2015 while cash jumped on 46.2% in FY2015.
Appendix 1: Peers in Diversified Finan Serv
Below you can find Guoco Group Ltd benchmarking vs. other companies in Diversified Finan Serv 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 |
|---|
| China New Energy Power Group Ltd ($1041) | | 100.0% | 0.0% | 64,246.0% | |
| ReOrient Group Ltd ($376) | 63.3% | 112.8% | 75.1% | 1,106.9% | |
| Global Strategic Group Ltd ($8007) | 2.2% | -3.9% | 2.1% | 806.3% | |
| AID Partners Capital Holdings Ltd ($8088) | -38.7% | 0.9% | -79.5% | 655.2% | |
| Willie International Holdings Ltd ($273) | | | | 543.9% | |
| |
|---|
| Median (62 companies) | 6.9% | 0.9% | 12.9% | 26.5% | 23.1% |
|---|
| Guoco Group Ltd ($53) | | 16.1% | 108.6% | 13.6% | -4.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Roma Group Ltd ($8072) | | | | 99.4% | 98.7% |
| Freeman Financial Corp Ltd ($279) | 97.1% | 52.3% | 99.3% | 98.5% | |
| Chinese Strategic Holdings Ltd ($8089) | 97.9% | 99.1% | 97.9% | 97.0% | |
| First China Financial Network Holdings Ltd ($8123) | 98.6% | 93.4% | | 94.5% | |
| Allied Group Ltd ($373) | 94.5% | 95.1% | 94.4% | 93.6% | |
| |
|---|
| Median (13 companies) | 80.8% | 64.2% | 75.1% | 88.2% | 90.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Styland Holdings Ltd ($211) | 68.6% | 198.6% | 91.5% | 161.0% | 17.9% |
| Roma Group Ltd ($8072) | 81.4% | 18.1% | 36.8% | 143.0% | 44.7% |
| First China Financial Network Holdings Ltd ($8123) | -231.6% | -329.2% | -211.2% | 124.3% | |
| Willie International Holdings Ltd ($273) | | | 75.3% | 95.2% | |
| Get Nice Holdings Ltd ($64) | 28.4% | 2.6% | 153.4% | 92.7% | 83.9% |
| |
|---|
| Median (63 companies) | 29.5% | 16.4% | 35.5% | 47.2% | 35.3% |
|---|
| Guoco Group Ltd ($53) | 36.0% | -2.9% | 38.1% | 30.2% | 30.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gemini Investments Holdings Ltd ($174) | 14.9% | 479.1% | 37.3% | 216.0% | |
| China Assurance Finance Group Ltd ($8090) | | 94.7% | 68.9% | 53.3% | |
| Chinese Strategic Holdings Ltd ($8089) | 93.2% | 376.0% | 5.7% | 32.6% | |
| AID Partners Capital Holdings Ltd ($8088) | 196.3% | 4.1% | 2.9% | 28.4% | |
| Asian Capital Holdings Ltd ($8295) | 2.3% | 0.1% | 0.2% | 15.6% | |
| |
|---|
| Median (63 companies) | 2.2% | 1.8% | 1.7% | 1.1% | 2.2% |
|---|
| Guoco Group Ltd ($53) | 92.2% | 11.5% | 3.5% | 5.7% | 9.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ReOrient Group Ltd ($376) | -24.9% | -45.6% | -53.5% | 128.6% | |
| Roma Group Ltd ($8072) | | 19.6% | 43.7% | 107.8% | 13.3% |
| Convoy Financial Holdings Ltd ($1019) | 31.1% | 3.4% | 39.3% | 47.3% | |
| Willie International Holdings Ltd ($273) | -28.1% | -9.5% | 4.7% | 30.9% | |
| Value Partners Group Ltd ($806) | 8.7% | 16.8% | 16.5% | 26.8% | |
| |
|---|
| Median (65 companies) | 4.9% | 3.9% | 4.0% | 4.7% | 2.6% |
|---|
| Guoco Group Ltd ($53) | 3.1% | -1.5% | 6.2% | 4.8% | 4.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cash Financial Services Group Ltd ($510) | -1.1x | 7.8x | | 67.5x | |
| Far East Horizon Ltd ($3360) | 17.8x | 16.9x | 21.7x | 20.0x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 7.3x | 2.1x | 10.3x | 9.3x | 39.3x |
| China Cinda Asset Management Co Ltd ($1359) | 2.1x | 5.0x | 7.7x | 8.4x | |
| Aeon Credit Service Asia Co Ltd ($900) | 6.3x | 5.2x | 6.0x | 6.9x | 5.5x |
| |
|---|
| Median (45 companies) | -1.1x | -1.0x | -0.0x | -0.1x | 0.6x |
|---|
| Guoco Group Ltd ($53) | 9.8x | | 4.1x | 4.6x | 3.3x |
