Continental Holdings Ltd Net Debt / EBITDA surged on 4,110.6x from 92.9x to 4,203.6x in 2015 and Debt surged on 23.0%
29/09/2015 • About Continental Holdings Ltd (
$513) • By InTwits
Continental Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Continental Holdings Ltd is a company in decline: FY2015 revenue growth was -15.8%, 5 years revenue CAGR was -6.7%
- EBITDA Margin is quite volatile: 0.0% in FY2015, 0.5% in FY2014, 2.1% in FY2013, -0.9% in FY2012, 2.9% in FY2011
- Continental Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 12.0%.
- CAPEX is quite volatile: 40.6 in FY2015, 25.7 in FY2014, 6.3 in FY2013, 11.5 in FY2012, 23.8 in FY2011
- The company has unprofitable business model: ROIC is at -0.4%
- It operates with high leverage: Net Debt/EBITDA is 4,203.6x while industry average is 319.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Continental Holdings Ltd ($513) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 973.5 | 955.7 | 949.2 | 868.1 | 730.9 | -15.8% |
| Gross Profit | 124.9 | 134.6 | 120.3 | 114.3 | 105.3 | -7.8% |
| SG&A | | | 112.4 | 114.3 | 128.3 | 12.3% |
| EBITDA | 28.3 | -8.4 | 20.1 | 4.6 | 0.1 | -97.1% |
| Net Income | 33.5 | 214.9 | 85.8 | 50.6 | 141.6 | 179.9% |
Balance Sheet
|
|---|
| Cash | 49.9 | 85.2 | 37.9 | 78.1 | 55.6 | -28.8% |
| Short Term Debt | 235.1 | 379.1 | 336.3 | 416.3 | 469.0 | 12.7% |
| Long Term Debt | 50.8 | 118.7 | 105.0 | 90.3 | 154.1 | 70.6% |
Cash flow
|
|---|
| Capex | 23.8 | 11.5 | 6.3 | 25.7 | 40.6 | 57.9% |
Ratios
|
|---|
| Revenue growth | -5.6% | -1.8% | -0.7% | -8.5% | -15.8% | |
| EBITDA growth | -177.6% | -129.5% | -340.1% | -77.1% | -97.1% | |
| Gross Margin | 12.8% | 14.1% | 12.7% | 13.2% | 14.4% | 1.2% |
| EBITDA Margin | 2.9% | -0.9% | 2.1% | 0.5% | 0.0% | -0.5% |
| Net Income Margin | 3.4% | 22.5% | 9.0% | 5.8% | 19.4% | 13.5% |
| SG&A, % of revenue | | | 11.8% | 13.2% | 17.6% | 4.4% |
| CAPEX, % of revenue | 2.4% | 1.2% | 0.7% | 3.0% | 5.6% | 2.6% |
| ROIC | 1.7% | -0.9% | 0.4% | -0.2% | -0.4% | -0.2% |
| ROE | 3.3% | 16.0% | 5.0% | 2.8% | 7.3% | 4.6% |
| Net Debt/EBITDA | 8.3x | | 20.1x | 92.9x | 4,203.6x | 4,110.6x |
Revenue and profitability
The company's Revenue dropped on 15.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.8 pp from 36.8% to 40.6% in FY2015.
Gross Margin increased slightly on 1.2 pp from 13.2% to 14.4% in FY2015. SG&A as a % of Revenue increased on 4.4 pp from 13.2% to 17.6% in FY2015.
Net Income marign surged on 13.5 pp from 5.8% to 19.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 5.6%. CAPEX/Revenue increased on 4.4 pp from 1.2% in FY2012 to 5.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 3.1%.Battling declining revenue the company made large investments to CAPEX (30,084% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.41%) and low but positive ROE (7.34%). ROIC showed almost no change in FY2015. ROE increased on 4.6 pp from 2.8% to 7.3% in FY2015.
Leverage (Debt)
Debt level is 4,203.6x Net Debt / EBITDA and 4,615.7x Debt / EBITDA. Net Debt / EBITDA jumped on 4,110.6x from 92.9x to 4,203.6x in FY2015. Debt surged on 23.0% in FY2015 while cash dropped on 28.8% in FY2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below we provide Continental Holdings Ltd benchmarking against other companies in Miscellaneous Manufactur 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 |
|---|
| CSR Corp Ltd ($1766) | 24.0% | 12.0% | 9.7% | 123.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 37.4% | 59.5% | 45.9% | 45.0% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 1.5% | 22.2% | 43.2% | |
| Time Watch Investments Ltd ($2033) | | 28.2% | 25.4% | 25.6% | 10.4% |
| China International Marine Containers Group Co Ltd ($2039) | 23.4% | -15.6% | 6.6% | 21.4% | |
| |
|---|
| Median (25 companies) | 23.7% | -7.1% | 0.1% | 8.2% | -11.5% |
|---|
| Continental Holdings Ltd ($513) | | -1.8% | -0.7% | -8.5% | -15.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Time Watch Investments Ltd ($2033) | 58.5% | 60.2% | 60.6% | 65.0% | 68.1% |
| Man Sang International Ltd ($938) | 34.7% | 42.4% | 32.8% | 60.3% | 78.6% |
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 35.0% | 33.2% | 35.1% | 37.4% | |
| Launch Tech Co Ltd ($2488) | 39.2% | 27.4% | 33.6% | 33.6% | |
| |
|---|
| Median (24 companies) | 21.0% | 19.8% | 20.8% | 24.9% | 23.1% |
|---|
| Continental Holdings Ltd ($513) | 12.8% | 14.1% | 12.7% | 13.2% | 14.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | |
| Man Sang International Ltd ($938) | 18.7% | 24.9% | 15.4% | 37.0% | 33.8% |
| IPE Group Ltd ($929) | 24.9% | 25.6% | 22.5% | 29.5% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 19.5% | 18.4% | 19.8% | 20.6% | |
| Time Watch Investments Ltd ($2033) | 16.8% | 17.6% | 16.8% | 19.4% | 20.5% |
| |
|---|
| Median (25 companies) | 10.7% | 8.1% | 9.8% | 9.8% | 5.9% |
|---|
| Continental Holdings Ltd ($513) | 2.9% | -0.9% | 2.1% | 0.5% | 0.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | |
| KEE Holdings Co Ltd ($2011) | 20.9% | 21.8% | 43.7% | 24.9% | |
| China International Marine Containers Group Co Ltd ($2039) | 4.7% | 3.9% | 12.1% | 18.5% | |
| China Environmental Energy Investment Ltd ($986) | 77.7% | 6.1% | 0.4% | 17.9% | 47.6% |
| TK Group Holdings Ltd ($2283) | 8.9% | 13.3% | 8.1% | 13.7% | |
| |
|---|
| Median (25 companies) | 5.2% | 4.9% | 4.3% | 4.4% | 4.3% |
|---|
| Continental Holdings Ltd ($513) | 2.4% | 1.2% | 0.7% | 3.0% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | |
| Time Watch Investments Ltd ($2033) | 30.5% | 34.5% | 27.1% | 27.8% | 27.9% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 16.9% | 17.7% | 20.0% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 12.2% | 19.7% | 17.8% | 16.5% | |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | |
| |
|---|
| Median (25 companies) | 8.0% | 4.4% | 4.4% | 4.4% | 1.5% |
|---|
| Continental Holdings Ltd ($513) | 1.7% | -0.9% | 0.4% | -0.2% | -0.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | |
| China International Marine Containers Group Co Ltd ($2039) | 2.8x | 4.0x | 4.7x | 5.8x | |
| VS International Group Ltd ($1002) | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x |
| Launch Tech Co Ltd ($2488) | -0.4x | 7.6x | 2.4x | 3.9x | |
| Lee & Man Chemical Co Ltd ($746) | -0.3x | -0.2x | 1.5x | 2.2x | |
| |
|---|
| Median (21 companies) | -0.3x | -0.3x | -0.3x | -0.2x | -1.2x |
|---|
| Continental Holdings Ltd ($513) | 8.3x | | 20.1x | 92.9x | 4,203.6x |
