RCG Holdings Ltd/Hong Kong reports 235% Net Income growth and 6.9% Revenue growth
29/02/2016 • About RCG Holdings Ltd/Hong Kong (
$802) • By InTwits
RCG Holdings Ltd/Hong Kong reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- RCG Holdings Ltd/Hong Kong doesn't have a profitable business model yet: 2015 ROIC is -3.4%
- The company operates at negative EBITDA Margin: -67.3%
- RCG Holdings Ltd/Hong Kong spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -57.0%0
- RCG Holdings Ltd/Hong Kong has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has unprofitable business model: ROIC is at -3.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
RCG Holdings Ltd/Hong Kong ($802) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,385 | 1,023 | 466 | 32 | 34 | 6.9% |
| Gross Profit | 254 | -642 | -228 | 0 | 2 | 455.4% |
| SG&A | | | 81 | 41 | 32 | -21.4% |
| EBITDA | 103 | -853 | -855 | -48 | -23 | -52.7% |
| Net Income | -1,355 | -1,874 | -936 | -116 | 156 | -235.4% |
Balance Sheet
|
|---|
| Cash | 53 | 28 | 74 | 139 | 306 | 120.1% |
| Short Term Debt | 43 | 15 | 9 | 59 | 0 | -100.0% |
| Long Term Debt | 45 | 43 | 30 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 2 | 2 | 0 | 0 | 0 | |
Ratios
|
|---|
| Revenue growth | -54.2% | -26.2% | -54.4% | -93.2% | 6.9% | |
| EBITDA growth | -87.4% | -926.6% | 0.1% | -94.3% | -52.7% | |
| Gross Margin | 18.3% | -62.8% | -48.8% | 1.3% | 6.6% | 5.3% |
| EBITDA Margin | 7.5% | -83.4% | -183.3% | -152.2% | -67.3% | 84.9% |
| Net Income Margin | -97.8% | -183.3% | -200.7% | -362.8% | 459.7% | 822.5% |
| SG&A, % of revenue | | | 17.4% | 129.8% | 95.4% | -34.4% |
| CAPEX, % of revenue | 0.1% | 0.2% | 0.0% | 0.0% | 0.4% | 0.4% |
| ROIC | -3.2% | -46.0% | -62.1% | -4.9% | -3.4% | 1.4% |
| ROE | -39.0% | -93.2% | -137.0% | -51.1% | 35.9% | 87.0% |
| Net Debt/EBITDA | 0.3x | | | | | 0.0x |
Revenue and profitability
The company's Revenue increased on 6.9% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 84.9 pp from -152% to -67.3% in 2015.
Gross Margin increased on 5.3 pp from 1.3% to 6.6% in 2015. SG&A as a % of Revenue dropped on 34.4 pp from 130% to 95.4% in 2015.
Net Income marign surged on 823 pp from -363% to 460% in 2015.
Capital expenditures (CAPEX) and working capital investments
RCG Holdings Ltd/Hong Kong's CAPEX/Revenue was 0.44% in 2015. The company's CAPEX/Revenue showed almost no change from 2012 to 2015.
Return on investment
The company operates at negative ROIC (-3.43%) and low but positive ROE (35.93%). ROIC increased slightly on 1.4 pp from -4.9% to -3.4% in 2015. ROE surged on 87.0 pp from -51.1% to 35.9% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash jumped on 120% in 2015.
Appendix 1: Peers in Electronics
Below you can find RCG Holdings Ltd/Hong Kong benchmarking vs. other companies in Electronics 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 Netcom Technology Holdings Ltd ($8071) | -22.0% | 11.6% | -23.0% | 104.1% | |
| Technovator International Ltd ($1206) | 31.6% | 27.4% | 34.1% | 35.9% | |
| Tongda Group Holdings Ltd ($698) | 34.0% | 8.3% | 6.4% | 32.1% | |
| Advanced Card Systems Holdings Ltd ($8210) | 25.3% | 36.9% | 20.8% | 26.7% | |
| Alltronics Holdings Ltd ($833) | 33.9% | -1.6% | -1.6% | 23.4% | |
| |
|---|
| Median (48 companies) | 13.8% | -1.0% | 3.6% | 5.0% | -0.2% |
|---|
| RCG Holdings Ltd/Hong Kong ($802) | | -26.2% | -54.4% | -93.2% | 6.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | |
| TeleEye Holdings Ltd ($8051) | 51.6% | 44.0% | 42.1% | 38.5% | 37.0% |
| Wasion Group Holdings Ltd ($3393) | 30.3% | 32.8% | 35.1% | 34.2% | |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | |
| |
|---|
| Median (46 companies) | 13.6% | 14.6% | 13.8% | 14.1% | 13.4% |
|---|
| RCG Holdings Ltd/Hong Kong ($802) | 18.3% | -62.8% | -48.8% | 1.3% | 6.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | |
| Nanjing Sample Technology Co Ltd ($1708) | 31.5% | 26.8% | 21.1% | 22.3% | |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | |
| Technovator International Ltd ($1206) | 19.2% | 19.0% | 19.0% | 20.8% | |
| Trigiant Group Ltd ($1300) | 17.0% | 17.6% | 18.2% | 18.5% | |
| |
|---|
| Median (48 companies) | 9.3% | 7.4% | 6.0% | 4.6% | 3.3% |
|---|
| RCG Holdings Ltd/Hong Kong ($802) | 7.5% | -83.4% | -183.3% | -152.2% | -67.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AKM Industrial Co Ltd ($1639) | 7.4% | 5.0% | 17.4% | 25.2% | |
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | |
| Tech Pro Technology Development Ltd ($3823) | 32.8% | 7.6% | 13.1% | 15.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 3.7% | 23.9% | 15.5% | 12.0% | |
| |
|---|
| Median (48 companies) | 3.5% | 3.7% | 3.2% | 4.2% | 1.7% |
|---|
| RCG Holdings Ltd/Hong Kong ($802) | 0.1% | 0.2% | 0.0% | 0.0% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | |
| Advanced Card Systems Holdings Ltd ($8210) | 15.5% | 26.7% | 24.7% | 20.2% | |
| Alltronics Holdings Ltd ($833) | 19.3% | 13.1% | 15.2% | 19.8% | |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | |
| Trigiant Group Ltd ($1300) | 17.9% | 17.8% | 18.3% | 15.2% | |
| |
|---|
| Median (48 companies) | 5.9% | 4.3% | 3.5% | 3.0% | 1.2% |
|---|
| RCG Holdings Ltd/Hong Kong ($802) | -3.2% | -46.0% | -62.1% | -4.9% | -3.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
| Sino-Tech International Holdings Ltd ($724) | | | 15.7x | 24.7x | |
| Eyang Holdings Group Co Ltd ($117) | 4.2x | 3.3x | 3.7x | 17.9x | |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.8x | 2.2x | 2.6x | 5.7x | 5.4x |
| |
|---|
| Median (35 companies) | 0.7x | 1.0x | 1.1x | 1.2x | 0.1x |
|---|
