Emperor Capital Group Ltd demonstrated fast growth over the last few years. Will the growth continue?
16/12/2015 • About Emperor Capital Group Ltd (
$717) • By InTwits
Pay attention to Emperor Capital Group Ltd as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Emperor Capital Group Ltd showed growth in the last financial year. The company's revenue surged on 52.8% in FY2015. Together with revenue growth Emperor Capital Group Ltd also managed to keep EBITDA growth. EBITDA grew 85.2% for the same period.
In the last 3 years Emperor Capital Group Ltd showed fast revenue growth of 55.1% from FY2012 to FY2015 annualy. EBITDA surged on 105% from FY2012 to FY2015 annualy.
Emperor Capital Group Ltd ($717) financials for the last 5 years
| mln. HKD | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 204 | 224 | 435 | 546 | 835 |
|---|
| Revenue growth, % | | 9.5% | 94.3% | 25.7% | 52.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 77 | 66 | 193 | 309 | 572 |
|---|
| EBITDA growth, % | | -14.5% | 191.4% | 60.2% | 85.2% |
|---|
| EBITDA margin, % | 37.8% | 29.6% | 44.3% | 56.5% | 68.4% |
|---|
| Net Income | 62 | 63 | 156 | 221 | 430 |
|---|
| Net Income margin, % | 30.4% | 28.3% | 35.8% | 40.4% | 51.5% |
|---|
| |
| CAPEX | 1 | 4 | 2 | 2 | 2 |
|---|
| CAPEX/Revenue, % | 0.411% | 1.68% | 0.423% | 0.389% | 0.195% |
|---|
| Debt | 0 | 0 | 310 | 1,326 | 1,086 |
|---|
| Cash | 637 | 222 | 339 | 528 | 462 |
|---|
| Net Debt/EBITDA | -8.2x | -3.4x | -0.1x | 2.6x | 1.1x |
|---|
| |
| ROIC, % | 5.1% | 5.1% | 12.8% | 13.1% | 14.6% |
|---|
| ROE, % | 6.9% | 5.1% | 11.8% | 14.9% | 16.5% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. The company's EBITDA margin surged on 11.9 pp from 56.5% to 68.4% in FY2015. If we look for the longer period Emperor Capital Group Ltd showed fast EBITDA margin growth of 38.8 pp from 29.6% in FY2012 to 68.4% in FY2015.
We call Emperor Capital Group Ltd an attractive growth stock as together with the growth it delivers high ROIC at 14.6%. Three years ago it was lower at 5.12%. Average ROIC for the last three years was 13.5%.
Emperor Capital Group Ltd showed fast Net Income margin growth of 11.1 pp from 40.4% to 51.5% in FY2015. If we look for the longer period Net Income margin surged on 23.2 pp from 28.3% in FY2012 to 51.5% in FY2015.
Emperor Capital Group Ltd operates at ROE of 16.5%. Average ROE for the last three years was 14.4%.
Capital expenditures (CAPEX)
In FY2015 Emperor Capital Group Ltd had CAPEX/Revenue of 0.195%. Emperor Capital Group Ltd's CAPEX/Revenue dropped on 1.49 pp from 1.68% in FY2012 to 0.195% in FY2015. It's average level of CAPEX/Revenue for the last three years was 0.336%.
Leverage (Debt)
Having such a fast growth profile Emperor Capital Group Ltd keeps medium debt level at 1.1x Net Debt/EBITDA. In the longer period the company's leverage surged on 4.45x from -3.36x in FY2012 to 1.09x in FY2015.
Valuation vs. comparable companies
The company trades at 7.7x EV/EBITDA which is 78% lower than 35.2x Diversified Finan Serv industry avearge calculated based on 72 companies. The company trades at 8.8x P/E which is 87.5% lower than 70.7x Diversified Finan Serv industry avearge calculated based on 31 companies.
Peers in Diversified Finan Serv
Below you can find Emperor Capital 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 6.3% | 0.9% | 12.9% | 25.7% | 23.1% |
|---|
| Emperor Capital Group Ltd ($717) | | 9.5% | 94.3% | 25.7% | 52.8% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | 14.0% | 35.5% | 43.6% | 31.6% |
|---|
| Emperor Capital Group Ltd ($717) | 37.8% | 29.6% | 44.3% | 56.5% | 68.4% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 2.3% | 1.9% | 1.8% | 1.1% | 1.6% |
|---|
| Emperor Capital Group Ltd ($717) | 0.4% | 1.7% | 0.4% | 0.4% | 0.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 4.6% | 3.4% | 4.0% | 4.7% | 1.8% |
|---|
| Emperor Capital Group Ltd ($717) | 5.1% | 5.1% | 12.8% | 13.1% | 14.6% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | -1.0x | -0.7x | 0.3x | -0.1x | -1.3x |
|---|
| Emperor Capital Group Ltd ($717) | -8.2x | -3.4x | -0.1x | 2.6x | 1.1x |
