Hengxin Technology Ltd reports 19.5% EBITDA growth and 6.1% Revenue growth
23/02/2016 • About Hengxin Technology Ltd (
$1085) • By InTwits
Hengxin Technology Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hengxin Technology Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: 30.2 in 2015, 53.3 in 2014, 11.1 in 2013, 12.6 in 2012, 34.7 in 2011
- The company has business model with average profitability: ROIC is at 10.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hengxin Technology Ltd ($1085) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,419 | 1,134 | 1,238 | 1,475 | 1,566 | 6.1% |
| Gross Profit | 262 | 208 | 242 | 262 | 306 | 17.0% |
| SG&A | | 101 | 108 | 113 | 132 | 17.4% |
| EBITDA | 164 | 111 | 128 | 140 | 167 | 19.5% |
| Net Income | 102 | 67 | 79 | 97 | 115 | 18.6% |
Balance Sheet
|
|---|
| Cash | 324 | 266 | 372 | 469 | 606 | 29.2% |
| Short Term Debt | 230 | 42 | 177 | 205 | 117 | -42.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 35 | 13 | 11 | 53 | 30 | -43.3% |
Ratios
|
|---|
| Revenue growth | 20.0% | -20.1% | 9.2% | 19.2% | 6.1% | |
| EBITDA growth | 12.9% | -32.3% | 15.5% | 8.7% | 19.5% | |
| Gross Margin | 18.5% | 18.4% | 19.6% | 17.7% | 19.5% | 1.8% |
| EBITDA Margin | 11.6% | 9.8% | 10.4% | 9.5% | 10.7% | 1.2% |
| Net Income Margin | 7.2% | 5.9% | 6.4% | 6.6% | 7.4% | 0.8% |
| SG&A, % of revenue | | 8.9% | 8.7% | 7.6% | 8.4% | 0.8% |
| CAPEX, % of revenue | 2.4% | 1.1% | 0.9% | 3.6% | 1.9% | -1.7% |
| ROIC | 13.9% | 8.1% | 9.3% | 9.0% | 10.2% | 1.2% |
| ROE | 11.4% | 6.9% | 7.5% | 8.6% | 9.4% | 0.8% |
| Net Debt/EBITDA | -0.6x | -2.0x | -1.5x | -1.9x | -2.9x | -1.0x |
Revenue and profitability
Hengxin Technology Ltd's Revenue increased on 6.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 2.1% to 2.7% in FY2015.
Gross Margin increased slightly on 1.8 pp from 17.7% to 19.5% in 2015. SG&A as a % of Revenue increased slightly on 0.81 pp from 7.6% to 8.4% in 2015.
Net Income marign increased slightly on 0.77 pp from 6.6% to 7.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Hengxin Technology Ltd had CAPEX/Revenue of 1.9%. Hengxin Technology Ltd showed small growth in CAPEX/Revenue of 0.82 pp from 1.1% in 2012 to 1.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at low ROIC (10.21%) and ROE (9.36%). ROIC increased slightly on 1.2 pp from 9.0% to 10.2% in 2015. ROE increased slightly on 0.76 pp from 8.6% to 9.4% in 2015.
Leverage (Debt)
Debt level is -2.9x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from -1.9x to -2.9x in 2015. Debt dropped on 42.7% in 2015 while cash jumped on 29.2% in 2015.
Appendix 1: Peers in Electrical Compo&Equip
Below we provide Hengxin Technology Ltd benchmarking against other companies in Electrical Compo&Equip 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 |
|---|
| Enterprise Development Holdings Ltd ($1808) | 225.9% | 2.5% | 37.3% | 83.9% | |
| FDG Electric Vehicles Ltd ($729) | | -23.1% | -7.0% | 54.0% | 270.8% |
| Boer Power Holdings Ltd ($1685) | 11.4% | 20.4% | 10.9% | 51.3% | |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | -27.0% | -12.0% | 8.7% | 44.1% | |
| CEC International Holdings Ltd ($759) | | 23.9% | 60.8% | 43.0% | 32.3% |
| |
|---|
| Median (31 companies) | 13.4% | -2.9% | 8.3% | 15.0% | 3.7% |
|---|
| Hengxin Technology Ltd ($1085) | | -20.1% | 9.2% | 19.2% | 6.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boer Power Holdings Ltd ($1685) | 37.1% | 36.8% | 36.0% | 35.3% | |
| China Titans Energy Technology Group Co Ltd ($2188) | 45.4% | 41.4% | 27.3% | 33.7% | |
| Sun King Power Electronics Group ($580) | 16.2% | 25.4% | 30.0% | 30.8% | |
| CEC International Holdings Ltd ($759) | 18.5% | 23.6% | 27.9% | 29.9% | 31.8% |
| Johnson Electric Holdings Ltd ($179) | 27.5% | 27.3% | 28.0% | 29.5% | 29.6% |
| |
|---|
| Median (30 companies) | 20.6% | 19.2% | 16.7% | 15.9% | 23.2% |
|---|
| Hengxin Technology Ltd ($1085) | 18.5% | 18.4% | 19.6% | 17.7% | 19.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shougang Concord Technology Holdings ($521) | 22.7% | 12.3% | 28.1% | 31.9% | |
| Boer Power Holdings Ltd ($1685) | 28.1% | 26.3% | 27.8% | 28.5% | |
| China High Speed Transmission Equipment Group Co Ltd ($658) | 21.0% | 20.2% | 19.2% | 20.8% | |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | 9.2% | 5.7% | 7.4% | 16.9% | |
| Johnson Electric Holdings Ltd ($179) | 14.9% | 14.2% | 14.5% | 15.5% | 15.4% |
| |
|---|
| Median (32 companies) | 10.5% | 7.3% | 6.8% | 3.3% | -14.2% |
|---|
| Hengxin Technology Ltd ($1085) | 11.6% | 9.8% | 10.4% | 9.5% | 10.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Applied Development Holdings Ltd ($519) | 46.4% | 79.7% | | 1,285.3% | 89.8% |
| FDG Electric Vehicles Ltd ($729) | 177.5% | 374.3% | 82.3% | 71.1% | 417.0% |
| Sun King Power Electronics Group ($580) | 9.2% | 16.5% | 7.7% | 15.5% | |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | 23.7% | 23.1% | 50.7% | 13.5% | |
| Coslight Technology International Group Co Ltd ($1043) | 11.0% | 9.3% | 11.4% | 11.5% | |
| |
|---|
| Median (32 companies) | 10.0% | 6.5% | 5.0% | 3.8% | 4.8% |
|---|
| Hengxin Technology Ltd ($1085) | 2.4% | 1.1% | 0.9% | 3.6% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boer Power Holdings Ltd ($1685) | 18.2% | 18.0% | 17.0% | 21.2% | |
| Jiangnan Group Ltd ($1366) | 17.0% | 14.9% | 14.1% | 13.5% | |
| Johnson Electric Holdings Ltd ($179) | 13.1% | 11.7% | 11.6% | 12.7% | 11.2% |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | 5.1% | 1.8% | 3.0% | 10.4% | |
| Enterprise Development Holdings Ltd ($1808) | 1.0% | -3.5% | 12.3% | 8.3% | |
| |
|---|
| Median (32 companies) | 5.4% | 2.7% | 2.9% | 0.6% | -4.7% |
|---|
| Hengxin Technology Ltd ($1085) | 13.9% | 8.1% | 9.3% | 9.0% | 10.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tianneng Power International Ltd ($819) | 0.7x | 1.8x | 4.0x | 162.7x | |
| Coslight Technology International Group Co Ltd ($1043) | 11.2x | 51.9x | 8.7x | 54.7x | |
| China Titans Energy Technology Group Co Ltd ($2188) | 0.2x | 1.5x | | 16.9x | |
| Shougang Concord Technology Holdings ($521) | 12.7x | 16.3x | 4.9x | 13.8x | |
| Sun King Power Electronics Group ($580) | | 1.7x | 1.4x | 10.0x | |
| |
|---|
| Median (24 companies) | 0.4x | 1.5x | 1.4x | 2.5x | -1.5x |
|---|
| Hengxin Technology Ltd ($1085) | -0.6x | -2.0x | -1.5x | -1.9x | -2.9x |
