Guocang Group Ltd reports 610% CAPEX growth while 47.3% Revenue decline
18/09/2015 • About Guocang Group Ltd (
$559) • By InTwits
Guocang Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Guocang Group Ltd is a company in decline: FY2015 revenue growth was -47.3%, 5 years revenue CAGR was -31.3%
- The company operates at negative EBITDA Margin: -166.0%
- Guocang Group Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -12.3%0
- Guocang Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.6%. At the same time it's a lot of higher than industry average of 4.3%.
- CAPEX is quite volatile: 14.3 in FY2015, 2.0 in FY2014, 4.0 in FY2013, 0.44 in FY2012, 3.9 in FY2011
- The company has unprofitable business model: ROIC is at -7.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guocang Group Ltd ($559) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 379.1 | 311.9 | 411.0 | 94.4 | 49.7 | -47.3% |
| Gross Profit | 15.8 | 14.2 | 52.7 | 21.9 | 28.2 | 28.9% |
| SG&A | | 19.2 | 73.5 | 110.6 | 122.4 | 10.7% |
| EBITDA | -6.0 | 8.8 | -2.4 | -71.3 | -82.5 | 15.7% |
| Net Income | -46.7 | -53.1 | -72.6 | -41.3 | 12.1 | -129.2% |
Balance Sheet
|
|---|
| Cash | 307.7 | 288.2 | 328.2 | 406.6 | 179.6 | -55.8% |
| Short Term Debt | 83.9 | 62.2 | 44.1 | 166.7 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 69.5 | 179.7 | 158.5% |
Cash flow
|
|---|
| Capex | 3.9 | 0.4 | 4.0 | 2.0 | 14.3 | 609.5% |
Ratios
|
|---|
| Revenue growth | 16.7% | -17.7% | 31.8% | -77.0% | -47.3% | |
| EBITDA growth | -177.5% | -246.2% | -126.9% | 2,912.9% | 15.7% | |
| Gross Margin | 4.2% | 4.6% | 12.8% | 23.2% | 56.8% | 33.6% |
| EBITDA Margin | -1.6% | 2.8% | -0.6% | -75.6% | -166.0% | -90.4% |
| Net Income Margin | -12.3% | -17.0% | -17.7% | -43.7% | 24.3% | 68.0% |
| SG&A, % of revenue | | 6.1% | 17.9% | 117.2% | 246.3% | 129.2% |
| CAPEX, % of revenue | 1.0% | 0.1% | 1.0% | 2.1% | 28.8% | 26.7% |
| ROIC | -2.8% | -1.0% | -2.5% | -9.7% | -7.1% | 2.6% |
| ROE | -7.4% | -8.6% | -10.9% | -5.5% | 1.2% | 6.7% |
| Net Debt/EBITDA | | -25.7x | | | | 0.0x |
Revenue and profitability
Guocang Group Ltd's Revenue dropped on 47.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 90.4 pp from -75.6% to -166% in FY2015.
Gross Margin surged on 33.6 pp from 23.2% to 56.8% in FY2015. SG&A as a % of Revenue jumped on 129 pp from 117% to 246% in FY2015.
Net Income marign jumped on 68.0 pp from -43.7% to 24.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Guocang Group Ltd's CAPEX/Revenue was 28.8% in FY2015. CAPEX/Revenue jumped on 28.7 pp from 0.14% in FY2012 to 28.8% in FY2015. For the last three years the average CAPEX/Revenue was 10.6%.
Return on investment
The company operates at negative ROIC (-7.10%) and low but positive ROE (1.20%). ROIC increased on 2.6 pp from -9.7% to -7.1% in FY2015. ROE increased on 6.7 pp from -5.5% to 1.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -88.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt dropped on 23.9% in FY2015 while cash dropped on 55.8% in FY2015.
Appendix 1: Peers in Holding Companies-Divers
Below you can find Guocang Group Ltd benchmarking vs. other companies in Holding Companies-Divers 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 |
|---|
| Kong Sun Holdings Ltd ($295) | -18.7% | -88.3% | 5.1% | 7,067.0% | |
| Goldin Properties Holdings Ltd ($283) | | | 126.0% | 2,065.8% | -79.6% |
| China Primary Energy Holdings Ltd ($8117) | -43.1% | -56.3% | -23.6% | 195.4% | |
| Carnival Group International Holdings Ltd ($996) | | | | 159.1% | |
| 21 Holdings Ltd ($1003) | 20.3% | -57.4% | -12.4% | 106.4% | |
| |
|---|
| Median (42 companies) | 17.2% | 12.2% | 3.3% | 15.7% | 5.0% |
|---|
| Guocang Group Ltd ($559) | | -17.7% | 31.8% | -77.0% | -47.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Multifield International Holdings Ltd ($898) | 66.4% | 87.5% | 84.7% | 89.1% | |
| New Century Group Hong Kong Ltd ($234) | 76.7% | 27.3% | 85.2% | 82.8% | 91.5% |
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
| China Renji Medical Group Ltd/Hong Kong ($648) | 54.9% | 70.0% | 67.3% | 78.6% | |
| Century Legend Holdings Ltd ($79) | 68.5% | 70.1% | 72.3% | 71.0% | |
| |
|---|
| Median (39 companies) | 29.5% | 33.4% | 36.0% | 34.4% | 41.9% |
|---|
| Guocang Group Ltd ($559) | 4.2% | 4.6% | 12.8% | 23.2% | 56.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
| Multifield International Holdings Ltd ($898) | 49.8% | 80.1% | 68.3% | 97.5% | |
| New Century Group Hong Kong Ltd ($234) | 82.5% | -5.5% | 78.8% | 58.3% | 85.0% |
| Magnificent Estates ($201) | 42.1% | 45.5% | 47.8% | 53.0% | |
| China Merchants Holdings International Co Ltd ($144) | 63.7% | 56.4% | 50.8% | 45.2% | |
| |
|---|
| Median (44 companies) | 6.3% | 1.7% | 2.8% | 7.4% | 5.7% |
|---|
| Guocang Group Ltd ($559) | -1.6% | 2.8% | -0.6% | -75.6% | -166.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Far East Holdings International Ltd ($36) | 2.7% | 0.1% | 13.2% | 422.1% | |
| China Investments Holdings Ltd ($132) | 20.7% | 4.8% | 81.9% | 382.2% | |
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% |
| New Century Group Hong Kong Ltd ($234) | 1.0% | 97.2% | 1.0% | 142.7% | 32.2% |
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% |
| |
|---|
| Median (44 companies) | 4.9% | 2.7% | 3.8% | 7.0% | 21.0% |
|---|
| Guocang Group Ltd ($559) | 1.0% | 0.1% | 1.0% | 2.1% | 28.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wisdom Holdings Group ($1661) | 62.7% | 68.6% | 42.1% | 28.8% | |
| Chinney Alliance Group Ltd ($385) | 3.4% | 6.4% | 8.1% | 13.6% | |
| Hutchison Whampoa Ltd ($13) | 3.3% | 3.7% | 4.2% | 8.1% | |
| Code Agriculture Holdings Ltd ($8153) | -0.1% | 2.4% | -3.3% | 7.9% | -6.2% |
| C C Land Holdings Ltd ($1224) | 4.5% | 7.4% | 5.3% | 7.9% | |
| |
|---|
| Median (44 companies) | 0.6% | 0.1% | 0.2% | 0.8% | 0.3% |
|---|
| Guocang Group Ltd ($559) | -2.8% | -1.0% | -2.5% | -9.7% | -7.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x |
| Carnival Group International Holdings Ltd ($996) | | | | 23.7x | |
| Van Shung Chong Holdings Ltd ($1001) | 3.4x | | 0.9x | 12.3x | 7.7x |
| Southeast Asia Properties & Finance Ltd ($252) | 6.8x | 6.7x | 5.7x | 9.2x | 4.3x |
| Code Agriculture Holdings Ltd ($8153) | 24.3x | 11.9x | 42.8x | 8.7x | |
| |
|---|
| Median (27 companies) | 3.0x | 2.6x | 3.1x | 3.0x | 7.2x |
|---|
