ReOrient Group Ltd reports 318% CAPEX growth while 90.8% Revenue decline
18/02/2016 • About ReOrient Group Ltd (
$376) • By InTwits
ReOrient Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- ReOrient Group Ltd doesn't have a profitable business model yet: 2015 ROIC is -2.8%
- The company operates at negative EBITDA Margin: -79.9%
- ReOrient Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.8%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 11.0 in 2015, 2.6 in 2014, 2.7 in 2013, 0.40 in 2012, 10.2 in 2011
- The company has unprofitable business model: ROIC is at -2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
ReOrient Group Ltd ($376) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 23 | 50 | 88 | 1,056 | 98 | -90.8% |
| EBITDA | -36 | -94 | -83 | 763 | -78 | -110.2% |
| Net Income | -9 | -96 | -87 | 759 | -152 | -120.1% |
Balance Sheet
|
|---|
| Cash | 246 | 149 | 111 | 99 | 4,332 | 4,292.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 10 | 0 | 3 | 3 | 11 | 318.3% |
Ratios
|
|---|
| Revenue growth | 63.3% | 112.8% | 75.1% | 1,106.9% | -90.8% | |
| EBITDA growth | -1,383.6% | 157.1% | -10.9% | -1,015.4% | -110.2% | |
| EBITDA Margin | -154.9% | -187.1% | -95.3% | 72.3% | -79.9% | -152.1% |
| Net Income Margin | -37.5% | -192.1% | -99.8% | 71.8% | -156.3% | -228.1% |
| CAPEX, % of revenue | 43.4% | 0.8% | 3.1% | 0.2% | 11.3% | 11.0% |
| ROIC | -24.9% | -45.6% | -53.5% | 128.6% | -2.8% | -131.3% |
| ROE | | -46.1% | -55.4% | 129.7% | -5.3% | -135.0% |
| Net Debt/EBITDA | | | | -0.1x | | 0.1x |
Revenue and profitability
ReOrient Group Ltd's Revenue dropped on 90.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 30.8 pp from -55.5% to -24.7% in 2015.
Net Income marign dropped on 228 pp from 71.8% to -156% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 ReOrient Group Ltd had CAPEX/Revenue of 11.3%. ReOrient Group Ltd showed fast CAPEX/Revenue growth of 10.5 pp from 0.80% in 2012 to 11.3% in 2015. For the last three years the average CAPEX/Revenue was 4.9%.
Return on investment
The company operates at negative ROIC (-2.78%) and ROE (-5.28%). ROIC dropped on 131 pp from 129% to -2.8% in 2015. ROE dropped on 135 pp from 130% to -5.3% in 2015.
Leverage (Debt)
The company has no debt. Cash surged on 4,293% in 2015.
Appendix 1: Peers in Diversified Finan Serv
Below you can find ReOrient 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China New Energy Power Group Ltd ($1041) | | 100.0% | 0.0% | 64,246.0% | |
| 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% | |
| Freeman Financial Corp Ltd ($279) | | -89.3% | 764.3% | 200.8% | |
| |
|---|
| Median (62 companies) | 3.8% | 0.9% | 12.9% | 24.9% | 24.9% |
|---|
| ReOrient Group Ltd ($376) | | 112.8% | 75.1% | 1,106.9% | -90.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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) | 30.3% | 16.4% | 36.2% | 43.6% | 32.6% |
|---|
| ReOrient Group Ltd ($376) | -154.9% | -187.1% | -95.3% | 72.3% | -79.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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) | 2.2% | 1.9% | 1.7% | 1.1% | 1.4% |
|---|
| ReOrient Group Ltd ($376) | 43.4% | 0.8% | 3.1% | 0.2% | 11.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| China New Energy Power Group Ltd ($1041) | -8.5% | -5.6% | -4.2% | 24.9% | |
| |
|---|
| Median (65 companies) | 4.9% | 3.9% | 4.0% | 4.7% | 3.1% |
|---|
| ReOrient Group Ltd ($376) | -24.9% | -45.6% | -53.5% | 128.6% | -2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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) | -1.1x | -1.0x | 0.1x | 0.1x | -1.5x |
|---|
| ReOrient Group Ltd ($376) | | | | -0.1x | |
