Dah Chong Hong Holdings Ltd Debt dropped on 24.4% in 2015 and Net Debt / EBITDA dropped on 0.5x from 3.8x to 3.3x
01/03/2016 • About Dah Chong Hong Holdings Ltd (
$1828) • By InTwits
Dah Chong Hong Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 3.8% in 2015 vs. 4.2% in 2014 vs. 4.8% in 2011
- Dah Chong Hong Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 262 in 2015, 470 in 2014, 413 in 2013, 1,345 in 2012, 360 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.2%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dah Chong Hong Holdings Ltd ($1828) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 46,109 | 48,014 | 42,261 | 46,489 | 44,803 | -3.6% |
| Gross Profit | 5,166 | 5,603 | 4,872 | 5,257 | 5,238 | -0.4% |
| SG&A | 3,799 | 4,491 | 4,242 | 4,763 | 4,899 | 2.9% |
| EBITDA | 2,198 | 2,242 | 1,964 | 1,955 | 1,692 | -13.5% |
| Net Income | 1,323 | 1,045 | 901 | 750 | 570 | -24.0% |
Balance Sheet
|
|---|
| Cash | 2,386 | 2,966 | 1,920 | 1,243 | 985 | -20.8% |
| Short Term Debt | 3,764 | 3,471 | 5,608 | 5,402 | 2,455 | -54.6% |
| Long Term Debt | 2,020 | 2,938 | 1,816 | 3,259 | 4,095 | 25.7% |
Cash flow
|
|---|
| Capex | 1,214 | 1,096 | 1,054 | 933 | 657 | -29.6% |
Ratios
|
|---|
| Revenue growth | 43.1% | 4.1% | -12.0% | 10.0% | -3.6% | |
| EBITDA growth | 30.2% | 2.0% | -12.4% | -0.5% | -13.5% | |
| Gross Margin | 11.2% | 11.7% | 11.5% | 11.3% | 11.7% | 0.4% |
| EBITDA Margin | 4.8% | 4.7% | 4.6% | 4.2% | 3.8% | -0.4% |
| Net Income Margin | 2.9% | 2.2% | 2.1% | 1.6% | 1.3% | -0.3% |
| SG&A, % of revenue | 8.2% | 9.4% | 10.0% | 10.2% | 10.9% | 0.7% |
| CAPEX, % of revenue | 2.6% | 2.3% | 2.5% | 2.0% | 1.5% | -0.5% |
| ROIC | 14.2% | 11.4% | 8.5% | 7.7% | 6.2% | -1.5% |
| ROE | 17.9% | 12.7% | 10.3% | 8.2% | 6.2% | -2.0% |
| Net Debt/EBITDA | 1.5x | 1.5x | 2.8x | 3.8x | 3.3x | -0.5x |
Revenue and profitability
The company's Revenue decreased on 3.6% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 0.69 pp from 10.2% to 10.9% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Dah Chong Hong Holdings Ltd's CAPEX/Revenue was 1.5% in 2015. Dah Chong Hong Holdings Ltd showed small CAPEX/Revenue decline of 0.82 pp from 2.3% in 2012 to 1.5% in 2015. Average CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at low ROIC (6.22%) and ROE (6.21%). ROIC decreased slightly on 1.5 pp from 7.7% to 6.2% in 2015. ROE decreased slightly on 2.0 pp from 8.2% to 6.2% in 2015.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.8x to 3.3x in 2015. Debt dropped on 24.4% in 2015 while cash dropped on 20.8% in 2015.
Appendix 1: Peers in Auto Manufacturers
Below you can find Dah Chong Hong Holdings Ltd benchmarking vs. other companies in Auto Manufacturers 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 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 7.4% | -95.4% | 511.9% | 123.0% | |
| Guangzhou Automobile Group Co Ltd ($2238) | 25.6% | 18.0% | 45.2% | 18.9% | |
| Great Wall Motor Co Ltd ($2333) | 30.9% | 43.1% | 31.7% | 10.2% | |
| Sinotruk Hong Kong Ltd ($3808) | -7.7% | -23.8% | 9.0% | 7.9% | |
| Byd Co Ltd ($1211) | -3.1% | -4.2% | 16.4% | 7.2% | |
| |
|---|
| Median (9 companies) | 4.3% | -4.2% | 16.4% | 7.2% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | | 4.1% | -12.0% | 10.0% | -3.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.2% | 24.1% | 25.9% | 25.0% | |
| Geely Automobile Holdings Ltd ($175) | 18.2% | 18.5% | 20.1% | 18.2% | |
| Sinotruk Hong Kong Ltd ($3808) | 15.6% | 14.9% | 16.7% | 16.9% | |
| Qingling Motors Co Ltd ($1122) | 12.4% | 12.3% | 15.2% | 15.1% | |
| Byd Co Ltd ($1211) | 14.8% | 11.6% | 13.4% | 13.8% | |
| |
|---|
| Median (9 companies) | 14.8% | 11.8% | 13.4% | 13.8% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 11.2% | 11.7% | 11.5% | 11.3% | 11.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 16.1% | 18.0% | 19.5% | 17.8% | |
| Geely Automobile Holdings Ltd ($175) | 14.4% | 14.6% | 15.8% | 15.9% | |
| Byd Co Ltd ($1211) | 11.3% | 10.2% | 9.6% | 12.0% | |
| Qingling Motors Co Ltd ($1122) | 8.8% | 10.3% | 12.8% | 11.4% | |
| Sinotruk Hong Kong Ltd ($3808) | 8.0% | 6.6% | 7.4% | 7.8% | |
| |
|---|
| Median (9 companies) | 8.8% | 6.6% | 7.4% | 7.8% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 4.8% | 4.7% | 4.6% | 4.2% | 3.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 20.4% | 22.7% | 10.1% | 15.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 4.8% | 8.9% | 10.1% | 13.4% | |
| Great Wall Motor Co Ltd ($2333) | 12.9% | 10.7% | 13.0% | 12.0% | |
| Geely Automobile Holdings Ltd ($175) | 6.8% | 4.5% | 3.9% | 5.0% | |
| Byd Co Ltd ($1211) | 16.2% | 13.0% | 11.2% | 4.2% | |
| |
|---|
| Median (9 companies) | 5.0% | 6.4% | 3.9% | 4.2% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 2.6% | 2.3% | 2.5% | 2.0% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.9% | 27.7% | 32.2% | 25.5% | |
| Geely Automobile Holdings Ltd ($175) | 15.7% | 16.2% | 19.6% | 13.4% | |
| Wuling Motors Holdings Ltd ($305) | 6.2% | 7.2% | 7.7% | 10.0% | |
| Qingling Motors Co Ltd ($1122) | 5.5% | 4.5% | 5.7% | 5.1% | |
| Sinotruk Hong Kong Ltd ($3808) | 5.7% | 2.5% | 3.5% | 3.9% | |
| |
|---|
| Median (9 companies) | 6.1% | 2.7% | 3.5% | 3.9% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 14.2% | 11.4% | 8.5% | 7.7% | 6.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | | | | 13.2x | |
| Byd Co Ltd ($1211) | 2.8x | 3.4x | 6.7x | 3.9x | |
| Dongfeng Motor Group Co Ltd ($489) | -1.5x | | | 2.3x | |
| Wuling Motors Holdings Ltd ($305) | 2.8x | 2.0x | 1.9x | 0.8x | |
| Sinotruk Hong Kong Ltd ($3808) | 2.7x | 3.8x | 2.6x | 0.3x | |
| |
|---|
| Median (8 companies) | 1.8x | 2.0x | 0.9x | 0.6x | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 1.5x | 2.8x | 3.8x | 3.3x |
