Lam Soon Hong Kong Ltd revenue growth decelerated from 13.8% in FY2014 to 8.1% in FY2015
31/08/2015 • About Lam Soon Hong Kong Ltd (
$411) • By InTwits
Lam Soon Hong Kong 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: 4.9% in FY2015, 5.6% in FY2014, 5.1% in FY2013, 0.5% in FY2012, 5.4% in FY2011
- Lam Soon Hong Kong Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 8.5%.
- CAPEX is quite volatile: 71.7 in FY2015, 37.8 in FY2014, 59.4 in FY2013, 109 in FY2012, 60.8 in FY2011
- The company has business model with low profitability: ROIC is at 7.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lam Soon Hong Kong Ltd ($411) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,510 | 2,889 | 3,618 | 4,117 | 4,449 | 8.1% |
| Gross Profit | 443 | 390 | 576 | 682 | 774 | 13.5% |
| SG&A | | 430 | 453 | 521 | 623 | 19.5% |
| EBITDA | 136 | 15 | 186 | 229 | 220 | -3.8% |
| Net Income | 91 | -36 | 131 | 141 | 114 | -18.7% |
Balance Sheet
|
|---|
| Cash | 171 | 451 | 490 | 643 | 800 | 24.5% |
| Short Term Debt | 228 | 347 | 269 | 269 | 269 | -0.1% |
| Long Term Debt | 0 | 0 | 0 | 85 | 68 | -19.6% |
Cash flow
|
|---|
| Capex | 61 | 109 | 59 | 38 | 72 | 89.7% |
Ratios
|
|---|
| Revenue growth | 14.4% | 15.1% | 25.2% | 13.8% | 8.1% | |
| EBITDA growth | -20.5% | -88.9% | 1,138.9% | 23.0% | -3.8% | |
| Gross Margin | 17.7% | 13.5% | 15.9% | 16.6% | 17.4% | 0.8% |
| EBITDA Margin | 5.4% | 0.5% | 5.1% | 5.6% | 4.9% | -0.6% |
| Net Income Margin | 3.6% | -1.2% | 3.6% | 3.4% | 2.6% | -0.8% |
| SG&A, % of revenue | | 14.9% | 12.5% | 12.6% | 14.0% | 1.3% |
| CAPEX, % of revenue | 2.4% | 3.8% | 1.6% | 0.9% | 1.6% | 0.7% |
| ROIC | 5.1% | -2.4% | 6.9% | 8.7% | 7.7% | -1.0% |
| ROE | 6.4% | -2.5% | 8.9% | 8.9% | 7.0% | -2.0% |
| Net Debt/EBITDA | 0.4x | -6.9x | -1.2x | -1.3x | -2.1x | -0.8x |
Revenue and profitability
Lam Soon Hong Kong Ltd's Revenue increased on 8.1% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 25.8 pp from 37.3% to 11.5% in 2015.
Gross Margin increased slightly on 0.84 pp from 16.6% to 17.4% in FY2015. SG&A as a % of Revenue increased slightly on 1.3 pp from 12.6% to 14.0% in FY2015.
Net Income marign decreased slightly on 0.85 pp from 3.4% to 2.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Lam Soon Hong Kong Ltd's CAPEX/Revenue was 1.6% in FY2015. The company's CAPEX/Revenue decreased on 2.1 pp from 3.8% in FY2012 to 1.6% in FY2015. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (7.66%) and ROE (6.95%). ROIC decreased slightly on 1.0 pp from 8.7% to 7.7% in FY2015. ROE decreased slightly on 2.0 pp from 8.9% to 7.0% in FY2015.
Leverage (Debt)
Debt level is -2.1x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from -1.3x to -2.1x in FY2015. Debt decreased on 4.8% in FY2015 while cash jumped on 24.5% in FY2015.
Appendix 1: Peers in Food
Below we provide Lam Soon Hong Kong Ltd benchmarking against other companies in Food 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 |
|---|
| Wealth Glory Holdings Ltd ($8269) | | -16.5% | -53.8% | 555.7% | -12.4% |
| Natural Dairy NZ Holdings Ltd ($462) | 12.0% | -47.2% | 19.1% | 76.6% | |
| China Modern Dairy Holdings Ltd ($1117) | 88.8% | 50.7% | 96.1% | 52.8% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| Asia Cassava Resources Holdings Ltd ($841) | | -3.0% | 99.6% | 32.6% | -28.4% |
| |
|---|
| Median (37 companies) | 22.5% | 9.4% | 5.6% | 0.4% | -3.2% |
|---|
| Lam Soon Hong Kong Ltd ($411) | | 15.1% | 25.2% | 13.8% | 8.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | |
| Shenguan Holdings Group Ltd ($829) | 61.9% | 58.2% | 58.5% | 54.9% | |
| Yashili International Holdings Ltd ($1230) | 52.0% | 53.7% | 53.5% | 51.2% | |
| Natural Dairy NZ Holdings Ltd ($462) | 16.3% | -13.7% | 27.5% | 48.8% | |
| Christine International Holdings Ltd ($1210) | 51.3% | 50.2% | 49.7% | 47.2% | |
| |
|---|
| Median (37 companies) | 18.1% | 16.8% | 19.7% | 20.0% | 18.4% |
|---|
| Lam Soon Hong Kong Ltd ($411) | 17.7% | 13.5% | 15.9% | 16.6% | 17.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenguan Holdings Group Ltd ($829) | 57.2% | 58.7% | 59.2% | 54.5% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 147.8% | 40.3% | 48.4% | 47.1% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 109.2% | 45.1% | 47.9% | 47.1% | 37.2% |
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | |
| China Modern Dairy Holdings Ltd ($1117) | 33.9% | 33.5% | 27.0% | 25.3% | |
| |
|---|
| Median (37 companies) | 8.8% | 7.9% | 6.7% | 7.6% | 6.5% |
|---|
| Lam Soon Hong Kong Ltd ($411) | 5.4% | 0.5% | 5.1% | 5.6% | 4.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 453.6% | 98.2% | 29.8% | 132.0% | 109.8% |
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 182.5% | 26.1% | 18.3% | 43.4% | |
| Yashili International Holdings Ltd ($1230) | 3.6% | 8.2% | 7.1% | 20.1% | |
| Vedan International Holdings Ltd ($2317) | 2.8% | 2.5% | 2.4% | 18.8% | |
| |
|---|
| Median (37 companies) | 3.9% | 6.0% | 6.2% | 5.1% | 1.7% |
|---|
| Lam Soon Hong Kong Ltd ($411) | 2.4% | 3.8% | 1.6% | 0.9% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | |
| Want Want China Holdings Ltd ($151) | 24.9% | 27.9% | 29.4% | 22.8% | |
| Shenguan Holdings Group Ltd ($829) | 40.6% | 40.0% | 33.2% | 21.4% | |
| Huisheng International Holdings Ltd ($1340) | 63.0% | 31.9% | 23.7% | 16.3% | |
| Asia Cassava Resources Holdings Ltd ($841) | 13.8% | 4.2% | 5.9% | 13.6% | 11.6% |
| |
|---|
| Median (37 companies) | 11.9% | 7.6% | 5.9% | 5.5% | 5.9% |
|---|
| Lam Soon Hong Kong Ltd ($411) | 5.1% | -2.4% | 6.9% | 8.7% | 7.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Yurun Food Group Ltd ($1068) | 0.4x | 40.7x | 6.9x | 9.4x | |
| Beijing Jingkelong Co Ltd ($814) | 3.4x | 5.0x | 4.8x | 5.3x | |
| CP Lotus Corp ($121) | 2.3x | | 6.5x | 5.1x | |
| DaChan Food Asia Ltd ($3999) | -0.3x | 0.1x | 1.3x | 4.8x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.3x | 1.8x | 3.8x | 4.5x | |
| |
|---|
| Median (29 companies) | -0.1x | -0.3x | 0.8x | 0.8x | 2.2x |
|---|
| Lam Soon Hong Kong Ltd ($411) | 0.4x | -6.9x | -1.2x | -1.3x | -2.1x |
