Eco-Tek Holdings Ltd EBITDA jumped on 437% in 2015 while Revenue dropped on 12.2%
21/01/2016 • About Eco-Tek Holdings Ltd (
$8169) • By InTwits
Eco-Tek Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eco-Tek Holdings Ltd is a company in decline: FY2015 revenue growth was -12.2%, 5 years revenue CAGR was -14.3%
- EBITDA Margin is quite volatile: 13.8% in FY2015, 2.3% in FY2014, 11.7% in FY2013, 3.7% in FY2012, 10.3% in FY2011
- Eco-Tek Holdings 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 3.6%.
- CAPEX is quite volatile: 1.5 in FY2015, 2.8 in FY2014, 2.8 in FY2013, 0.78 in FY2012, 5.1 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Eco-Tek Holdings Ltd ($8169) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 182.0 | 120.9 | 110.8 | 96.1 | 84.3 | -12.2% |
| Gross Profit | 34.2 | 24.6 | 31.0 | 26.0 | 30.6 | 17.7% |
| SG&A | | | 22.6 | 24.1 | 25.7 | 6.9% |
| EBITDA | 18.7 | 4.5 | 13.0 | 2.2 | 11.6 | 437.0% |
| Net Income | 5.8 | -9.1 | -26.9 | -16.3 | 4.0 | -124.4% |
Balance Sheet
|
|---|
| Cash | 11.6 | 8.0 | 15.4 | 15.6 | 12.8 | -17.7% |
| Short Term Debt | 0.0 | 1.3 | 1.8 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 9.5 | 9.5 | 0.0% |
Cash flow
|
|---|
| Capex | 5.1 | 0.8 | 2.8 | 2.8 | 1.5 | -48.8% |
Ratios
|
|---|
| Revenue growth | -0.2% | -33.5% | -8.3% | -13.3% | -12.2% | |
| EBITDA growth | -36.8% | -75.8% | 187.8% | -83.3% | 437.0% | |
| Gross Margin | 18.8% | 20.4% | 28.0% | 27.1% | 36.3% | 9.2% |
| EBITDA Margin | 10.3% | 3.7% | 11.7% | 2.3% | 13.8% | 11.6% |
| Net Income Margin | 3.2% | -7.5% | -24.3% | -17.0% | 4.7% | 21.7% |
| SG&A, % of revenue | | | 20.4% | 25.0% | 30.5% | 5.4% |
| CAPEX, % of revenue | 2.8% | 0.6% | 2.5% | 2.9% | 1.7% | -1.2% |
| ROIC | 5.3% | -2.7% | 1.0% | -4.0% | 2.9% | 6.9% |
| ROE | 3.7% | -5.8% | -19.5% | -14.0% | 3.6% | 17.6% |
| Net Debt/EBITDA | -0.6x | -1.5x | -1.0x | -2.8x | -0.3x | 2.5x |
Revenue and profitability
Eco-Tek Holdings Ltd's Revenue dropped on 12.2% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 11.6 pp from 2.3% to 13.8% in FY2015.
Gross Margin increased on 9.2 pp from 27.1% to 36.3% in FY2015. SG&A as a % of Revenue increased on 5.4 pp from 25.0% to 30.5% in FY2015.
Net Income marign surged on 21.7 pp from -17.0% to 4.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Eco-Tek Holdings Ltd's CAPEX/Revenue was 1.7% in FY2015. Eco-Tek Holdings Ltd's CAPEX/Revenue increased slightly on 1.1 pp from 0.65% in FY2012 to 1.7% in FY2015. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at low ROIC (2.87%) and ROE (3.65%). ROIC increased on 6.9 pp from -4.0% to 2.9% in FY2015. ROE jumped on 17.6 pp from -14.0% to 3.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.3x and Debt / EBITDA is 0.8x. Net Debt / EBITDA jumped on 2.5x from -2.8x to -0.3x in FY2015. Debt didn't change in FY2015 while cash dropped on 17.7% in FY2015.
Appendix 1: Peers in Environmental Control
Below we provide Eco-Tek Holdings Ltd benchmarking against other companies in Environmental Control 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 |
|---|
| China Environmental Technology Holdings Ltd ($646) | -58.7% | 138.4% | -89.9% | 509.7% | |
| Capital Environment Holdings Ltd ($3989) | -89.7% | -12.6% | 1,503.8% | 241.2% | |
| CT Environmental Group Ltd ($1363) | 21.9% | -18.7% | 23.1% | 112.9% | |
| Asia Energy Logistics Group Ltd ($351) | | | | 92.2% | |
| Green Energy Group Ltd ($979) | 57.8% | -75.7% | 92.3% | 43.5% | |
| |
|---|
| Median (19 companies) | 18.2% | -2.2% | 17.6% | 12.5% | -1.8% |
|---|
| Eco-Tek Holdings Ltd ($8169) | | -33.5% | -8.3% | -13.3% | -12.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EverChina International Holdings Co Ltd ($202) | 40.2% | 51.8% | 53.4% | 95.3% | 95.4% |
| China Environmental Resources Group Ltd ($1130) | 12.3% | 17.2% | 11.3% | 73.7% | 34.1% |
| CT Environmental Group Ltd ($1363) | 57.7% | 65.8% | 63.1% | 56.4% | |
| China Everbright International Ltd ($257) | 41.3% | 49.4% | 44.7% | 46.7% | |
| New Universe International Group Ltd ($8068) | 51.9% | 47.9% | 47.7% | 45.0% | |
| |
|---|
| Median (18 companies) | 34.8% | 33.2% | 30.6% | 31.4% | 24.1% |
|---|
| Eco-Tek Holdings Ltd ($8169) | 18.8% | 20.4% | 28.0% | 27.1% | 36.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 52.2% | 63.6% | 62.8% | 58.7% | |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 55.9% | 57.5% | 56.6% | 57.8% | |
| China Everbright International Ltd ($257) | 37.3% | 44.6% | 40.7% | 43.6% | |
| New Universe International Group Ltd ($8068) | 42.0% | 40.2% | 37.8% | 39.3% | |
| China Water Affairs Group Ltd ($855) | 38.8% | 38.2% | 38.1% | 37.1% | 40.3% |
| |
|---|
| Median (19 companies) | 5.6% | 4.6% | 0.1% | -5.7% | -16.2% |
|---|
| Eco-Tek Holdings Ltd ($8169) | 10.3% | 3.7% | 11.7% | 2.3% | 13.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 31.8% | 65.0% | 27.1% | 51.4% | |
| New Universe International Group Ltd ($8068) | 103.4% | 16.4% | 16.6% | 44.9% | |
| Green Energy Group Ltd ($979) | 7.5% | 169.0% | 270.8% | 41.9% | |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 25.4% | 13.2% | 10.6% | 41.7% | 88.1% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 42.2% | 43.1% | 46.5% | 38.6% | |
| |
|---|
| Median (19 companies) | 12.8% | 16.4% | 16.1% | 16.2% | 22.7% |
|---|
| Eco-Tek Holdings Ltd ($8169) | 2.8% | 0.6% | 2.5% | 2.9% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 34.4% | 25.9% | 20.5% | 20.8% | |
| Sound Global Ltd ($967) | 15.0% | 12.8% | 11.5% | 10.8% | |
| China Everbright International Ltd ($257) | 11.1% | 10.4% | 11.2% | 10.5% | |
| Dongjiang Environmental Co Ltd ($895) | 17.0% | 14.3% | 7.4% | 9.4% | |
| New Universe International Group Ltd ($8068) | 5.8% | 6.3% | 6.8% | 8.9% | |
| |
|---|
| Median (19 companies) | 2.3% | -1.0% | -1.2% | -1.4% | -3.1% |
|---|
| Eco-Tek Holdings Ltd ($8169) | 5.3% | -2.7% | 1.0% | -4.0% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Water Affairs Group Ltd ($855) | 2.8x | 2.6x | 2.7x | 3.2x | 3.4x |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 4.1x | 4.2x | 3.1x | 2.9x | |
| Sound Global Ltd ($967) | -0.7x | -0.1x | 0.3x | 1.9x | |
| CT Environmental Group Ltd ($1363) | 1.8x | 2.4x | 0.5x | 1.9x | |
| China Everbright International Ltd ($257) | 2.8x | 2.1x | 0.5x | 1.5x | |
| |
|---|
| Median (9 companies) | 1.4x | 2.3x | 0.4x | 1.5x | 3.4x |
|---|
| Eco-Tek Holdings Ltd ($8169) | -0.6x | -1.5x | -1.0x | -2.8x | -0.3x |
