Hang Seng Bank Ltd Net Income jumped on 81.7% in 2015 and Revenue increased slightly on 1.4%
22/02/2016 • About Hang Seng Bank Ltd (
$11) • By InTwits
Hang Seng Bank Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hang Seng Bank Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's in pair with industry average of 3.3%.
- CAPEX is quite volatile: 1,492 in 2015, 682 in 2014, 3,589 in 2013, 359 in 2012, 422 in 2011
- The company has business model with low profitability: ROIC is at 8.3%
- It operates with high leverage: Net Debt/EBITDA is 29.1x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hang Seng Bank Ltd ($11) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 39,403 | 42,743 | 46,499 | 50,811 | 51,499 | 1.4% |
| Net Income | 16,885 | 19,327 | 26,678 | 15,131 | 27,494 | 81.7% |
Balance Sheet
|
|---|
| Cash | 39,533 | 20,506 | 33,294 | 11,311 | 10,118 | -10.5% |
| Short Term Debt | 73,716 | 79,698 | 73,943 | 81,682 | 81,697 | 0.0% |
| Long Term Debt | 11,846 | 11,821 | 11,824 | 5,817 | 2,325 | -60.0% |
Cash flow
|
|---|
| Capex | 422 | 359 | 3,589 | 682 | 1,492 | 118.8% |
Ratios
|
|---|
| Revenue growth | 4.7% | 8.5% | 8.8% | 9.3% | 1.4% | |
| Net Income Margin | 42.9% | 45.2% | 57.4% | 29.8% | 53.4% | 23.6% |
| CAPEX, % of revenue | 1.1% | 0.8% | 7.7% | 1.3% | 2.9% | 1.6% |
| ROIC | 9.0% | 8.6% | 9.5% | 9.0% | 8.3% | -0.7% |
| ROE | 22.6% | 22.5% | 26.7% | 12.6% | 20.3% | 7.7% |
Revenue and profitability
Hang Seng Bank Ltd's Revenue increased slightly on 1.4% in 2015.
Net Income marign jumped on 23.6 pp from 29.8% to 53.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.9%. Hang Seng Bank Ltd's CAPEX/Revenue increased on 2.1 pp from 0.84% in 2012 to 2.9% in 2015. It's average CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at good ROE (20.35%) while ROIC is low (8.31%). ROIC decreased slightly on 0.70 pp from 9.0% to 8.3% in 2015. ROE increased on 7.7 pp from 12.6% to 20.3% in 2015.
Leverage (Debt)
Debt decreased on 4.0% in 2015 while cash dropped on 10.5% in 2015.
Management team
The company's CEO is Lee Wai Mun "Rose". Lee Wai Mun "Rose" has 6 years tenure at the company. The company's CFO is Leung Wing Lok "Andrew". Leung Wing Lok "Andrew" has 9 years tenure at the company.
Appendix 1: Peers in Banks
Below you can find Hang Seng Bank Ltd benchmarking vs. other companies in Banks 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 |
|---|
| Chong Hing Bank Ltd ($1111) | 14.2% | 10.0% | -1.2% | 121.1% | |
| China Merchants Bank Co Ltd ($3968) | 42.3% | 24.0% | 18.6% | 33.9% | |
| Harbin Bank Co Ltd ($6138) | 104.6% | 58.3% | 12.1% | 29.2% | |
| Dah Sing Financial Holdings Ltd ($440) | 15.3% | 9.9% | -0.1% | 29.0% | |
| China CITIC Bank Corp Ltd ($998) | 46.7% | 30.5% | 19.5% | 29.0% | |
| |
|---|
| Median (20 companies) | 33.4% | 21.6% | 10.4% | 14.8% | -5.3% |
|---|
| Hang Seng Bank Ltd ($11) | | 8.5% | 8.8% | 9.3% | 1.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Minsheng Banking Corp Ltd ($1988) | 5.0% | 5.2% | 6.8% | 7.6% | |
| Harbin Bank Co Ltd ($6138) | 20.0% | 19.8% | 9.9% | 6.5% | |
| Industrial & Commercial Bank of China Ltd ($1398) | 3.2% | 3.8% | 4.9% | 5.4% | |
| Bank of Communications Co Ltd ($3328) | 3.1% | 3.6% | 5.1% | 5.3% | |
| China CITIC Bank Corp Ltd ($998) | 1.7% | 2.3% | 2.9% | 4.8% | |
| |
|---|
| Median (20 companies) | 3.6% | 3.6% | 3.9% | 3.1% | 1.6% |
|---|
| Hang Seng Bank Ltd ($11) | 1.1% | 0.8% | 7.7% | 1.3% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chong Hing Bank Ltd ($1111) | 6.3% | 5.5% | 5.2% | 16.4% | |
| China Construction Bank Corp ($939) | 11.6% | 11.1% | 11.7% | 10.8% | |
| Industrial & Commercial Bank of China Ltd ($1398) | 10.6% | 9.9% | 10.2% | 9.9% | |
| Agricultural Bank of China Ltd ($1288) | 10.3% | 9.9% | 10.0% | 9.3% | |
| Bank of China Ltd ($3988) | 6.3% | 6.2% | 6.3% | 6.2% | |
| |
|---|
| Median (20 companies) | 6.3% | 6.0% | 5.9% | 5.3% | 3.1% |
|---|
| Hang Seng Bank Ltd ($11) | 9.0% | 8.6% | 9.5% | 9.0% | 8.3% |
