Hong Kong Resources Holdings Co Ltd revenue dropped on 12.2% in 2015 and EBITDA Margin decreased slightly on 0.75 pp from -8.7% to -9.5%
25/09/2015 • About Hong Kong Resources Holdings Co Ltd (
$2882) • By InTwits
Hong Kong Resources Holdings Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hong Kong Resources Holdings Co Ltd doesn't have a profitable business model yet: FY2015 ROIC is -9.1%
- The company operates at negative EBITDA Margin: -9.5%
- Hong Kong Resources Holdings Co Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -0.6% for the sames years0
- Hong Kong Resources Holdings Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 6.2%.
- CAPEX is quite volatile: 28.3 in FY2015, 20.8 in FY2014, 18.8 in FY2013, 21.1 in FY2012, 44.6 in FY2011
- The company has unprofitable business model: ROIC is at -9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hong Kong Resources Holdings Co Ltd ($2882) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,451 | 3,841 | 2,887 | 1,562 | 1,371 | -12.2% |
| Gross Profit | 571 | 718 | 608 | 378 | 402 | 6.2% |
| SG&A | | | 136 | 147 | 139 | -5.2% |
| EBITDA | 97 | 66 | 35 | -136 | -130 | -4.7% |
| Net Income | 30 | -29 | -116 | -184 | -94 | -49.0% |
Balance Sheet
|
|---|
| Cash | 144 | 162 | 123 | 358 | 262 | -26.8% |
| Short Term Debt | 361 | 600 | 939 | 1,005 | 933 | -7.1% |
| Long Term Debt | 368 | 236 | 19 | 77 | 85 | 10.2% |
Cash flow
|
|---|
| Capex | 45 | 21 | 19 | 21 | 28 | 36.4% |
Ratios
|
|---|
| Revenue growth | 90.0% | 56.7% | -24.8% | -45.9% | -12.2% | |
| EBITDA growth | 51.7% | -32.0% | -47.0% | -489.0% | -4.7% | |
| Gross Margin | 23.3% | 18.7% | 21.1% | 24.2% | 29.3% | 5.1% |
| EBITDA Margin | 4.0% | 1.7% | 1.2% | -8.7% | -9.5% | -0.7% |
| Net Income Margin | 1.2% | -0.8% | -4.0% | -11.8% | -6.8% | 4.9% |
| SG&A, % of revenue | | | 4.7% | 9.4% | 10.1% | 0.8% |
| CAPEX, % of revenue | 1.8% | 0.6% | 0.7% | 1.3% | 2.1% | 0.7% |
| ROIC | 7.0% | 3.2% | 0.7% | -9.2% | -9.1% | 0.1% |
| ROE | 5.7% | -4.9% | -18.9% | -33.6% | -22.7% | 10.8% |
| Net Debt/EBITDA | 6.0x | 10.2x | 23.8x | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 12.2% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 0.75 pp from -8.7% to -9.5% in FY2015.
Gross Margin increased on 5.1 pp from 24.2% to 29.3% in FY2015. SG&A as a % of Revenue increased slightly on 0.76 pp from 9.4% to 10.1% in FY2015.
Net Income marign increased on 4.9 pp from -11.8% to -6.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Hong Kong Resources Holdings Co Ltd's CAPEX/Revenue was 2.1% in FY2015. CAPEX/Revenue increased slightly on 1.5 pp from 0.55% in FY2012 to 2.1% in FY2015. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at negative ROIC (-9.07%) and ROE (-22.74%). ROIC showed almost no change in FY2015. ROE jumped on 10.8 pp from -33.6% to -22.7% in FY2015.
Leverage (Debt)
Debt level is -3.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt decreased on 5.9% in FY2015 while cash dropped on 26.8% in FY2015.
Appendix 1: Peers in Retail
Below you can find Hong Kong Resources Holdings Co Ltd benchmarking vs. other companies in Retail 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 Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (109 companies) | 21.8% | 10.0% | 6.0% | 3.1% | -4.6% |
|---|
| Hong Kong Resources Holdings Co Ltd ($2882) | | 56.7% | -24.8% | -45.9% | -12.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (98 companies) | 40.4% | 37.8% | 39.5% | 37.6% | 45.6% |
|---|
| Hong Kong Resources Holdings Co Ltd ($2882) | 23.3% | 18.7% | 21.1% | 24.2% | 29.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (109 companies) | 13.3% | 9.9% | 7.2% | 8.8% | 6.0% |
|---|
| Hong Kong Resources Holdings Co Ltd ($2882) | 4.0% | 1.7% | 1.2% | -8.7% | -9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (109 companies) | 3.9% | 4.0% | 3.6% | 3.5% | 2.4% |
|---|
| Hong Kong Resources Holdings Co Ltd ($2882) | 1.8% | 0.6% | 0.7% | 1.3% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | 71.8% |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | 39.8% |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (109 companies) | 17.2% | 12.0% | 8.2% | 8.4% | 3.5% |
|---|
| Hong Kong Resources Holdings Co Ltd ($2882) | 7.0% | 3.2% | 0.7% | -9.2% | -9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (86 companies) | -0.8x | -0.6x | -0.9x | -0.2x | -0.6x |
|---|
