Lee & Man Chemical Co Ltd CAPEX dropped on 26.0% in 2015 while Revenue increased on 9.3%
01/03/2016 • About Lee & Man Chemical Co Ltd (
$746) • By InTwits
Lee & Man Chemical Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lee & Man Chemical Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.0%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: 389 in 2015, 526 in 2014, 679 in 2013, 88.1 in 2012, 26.2 in 2011
- The company has business model with average profitability: ROIC is at 10.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lee & Man Chemical Co Ltd ($746) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,808 | 1,521 | 1,329 | 1,560 | 1,706 | 9.3% |
| Gross Profit | 845 | 522 | 474 | 654 | 675 | 3.2% |
| SG&A | 200 | 165 | 165 | 209 | 214 | 2.5% |
| EBITDA | 775 | 462 | 417 | 599 | 641 | 6.9% |
| Net Income | 676 | 362 | 309 | 330 | 270 | -18.3% |
Balance Sheet
|
|---|
| Cash | 1,233 | 1,520 | 1,062 | 597 | 253 | -57.7% |
| Short Term Debt | 220 | 219 | 581 | 710 | 611 | -13.8% |
| Long Term Debt | 747 | 1,198 | 1,090 | 1,229 | 1,250 | 1.7% |
Cash flow
|
|---|
| Capex | 26 | 88 | 679 | 526 | 389 | -26.0% |
Ratios
|
|---|
| Revenue growth | 40.7% | -15.9% | -12.6% | 17.4% | 9.3% | |
| EBITDA growth | 48.1% | -40.3% | -9.9% | 43.9% | 6.9% | |
| Gross Margin | 46.7% | 34.3% | 35.7% | 41.9% | 39.6% | -2.3% |
| EBITDA Margin | 42.8% | 30.4% | 31.3% | 38.4% | 37.6% | -0.9% |
| Net Income Margin | 37.4% | 23.8% | 23.2% | 21.2% | 15.8% | -5.4% |
| SG&A, % of revenue | 11.1% | 10.9% | 12.4% | 13.4% | 12.5% | -0.8% |
| CAPEX, % of revenue | 1.4% | 5.8% | 51.1% | 33.7% | 22.8% | -10.9% |
| ROIC | 29.8% | 11.7% | 8.2% | 10.9% | 10.7% | -0.2% |
| ROE | 45.7% | 20.4% | 15.3% | 14.9% | 11.6% | -3.3% |
| Net Debt/EBITDA | -0.3x | -0.2x | 1.5x | 2.2x | 2.5x | 0.3x |
Revenue and profitability
Lee & Man Chemical Co Ltd's Revenue increased on 9.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 5.2% to 2.1% in FY2015.
Gross Margin decreased on 2.3 pp from 41.9% to 39.6% in 2015. SG&A as a % of Revenue decreased slightly on 0.83 pp from 13.4% to 12.5% in 2015.
Net Income marign decreased on 5.4 pp from 21.2% to 15.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Lee & Man Chemical Co Ltd had CAPEX/Revenue of 22.8%. The company showed fast CAPEX/Revenue growth of 17.0 pp from 5.8% in 2012 to 22.8% in 2015. Average CAPEX/Revenue for the last three years was 35.9%.The company maintained rich investment policy and has spent a big chunk of EBITDA (60.8%) to CAPEX.
Return on investment
The company operates at low ROIC (10.72%) and ROE (11.61%). ROIC showed almost no change in 2015. ROE decreased on 3.3 pp from 14.9% to 11.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 2.9x. Net Debt / EBITDA surged on 0.3x from 2.2x to 2.5x in 2015. Debt decreased on 4.0% in 2015 while cash dropped on 57.7% in 2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below we provide Lee & Man Chemical Co Ltd benchmarking against other companies in Miscellaneous Manufactur 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 |
|---|
| CSR Corp Ltd ($1766) | 24.0% | 12.0% | 9.7% | 123.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 37.4% | 59.5% | 45.9% | 45.0% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 1.5% | 22.2% | 43.2% | |
| Time Watch Investments Ltd ($2033) | | 28.2% | 25.4% | 25.6% | 10.4% |
| China International Marine Containers Group Co Ltd ($2039) | 23.4% | -15.6% | 6.6% | 21.4% | |
| |
|---|
| Median (25 companies) | 23.7% | -1.8% | 0.1% | 6.7% | -11.5% |
|---|
| Lee & Man Chemical Co Ltd ($746) | | -15.9% | -12.6% | 17.4% | 9.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Time Watch Investments Ltd ($2033) | 58.5% | 60.2% | 60.6% | 65.0% | 68.1% |
| Man Sang International Ltd ($938) | 34.7% | 42.4% | 32.8% | 60.3% | 78.6% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 35.0% | 33.2% | 35.1% | 37.4% | |
| Launch Tech Co Ltd ($2488) | 39.2% | 27.4% | 33.6% | 33.6% | |
| DeTeam Co Ltd ($65) | 13.9% | 17.7% | 15.7% | 31.0% | |
| |
|---|
| Median (24 companies) | 20.6% | 19.7% | 19.7% | 23.4% | 20.8% |
|---|
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | 39.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Man Sang International Ltd ($938) | 18.7% | 24.9% | 15.4% | 37.0% | 33.8% |
| IPE Group Ltd ($929) | 24.9% | 25.6% | 22.5% | 29.5% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 19.5% | 18.4% | 19.8% | 20.6% | |
| Time Watch Investments Ltd ($2033) | 16.8% | 17.6% | 16.8% | 19.4% | 20.5% |
| TK Group Holdings Ltd ($2283) | 22.1% | 21.4% | 18.9% | 17.9% | |
| |
|---|
| Median (25 companies) | 10.2% | 8.0% | 8.2% | 9.5% | 3.5% |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | 37.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| KEE Holdings Co Ltd ($2011) | 20.9% | 21.8% | 43.7% | 24.9% | |
| China International Marine Containers Group Co Ltd ($2039) | 4.7% | 3.9% | 12.1% | 18.5% | |
| China Environmental Energy Investment Ltd ($986) | 77.7% | 6.1% | 0.4% | 17.9% | 47.6% |
| TK Group Holdings Ltd ($2283) | 8.9% | 13.3% | 8.1% | 13.7% | |
| IPE Group Ltd ($929) | 7.1% | 6.3% | 13.3% | 12.3% | |
| |
|---|
| Median (25 companies) | 5.2% | 4.7% | 4.2% | 4.2% | 4.3% |
|---|
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | 22.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | |
| Time Watch Investments Ltd ($2033) | 30.5% | 34.5% | 27.1% | 27.8% | 27.9% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 16.9% | 17.7% | 20.0% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 12.2% | 19.7% | 17.8% | 16.5% | |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | |
| |
|---|
| Median (25 companies) | 6.4% | 4.2% | 3.6% | 3.9% | 1.3% |
|---|
| Lee & Man Chemical Co Ltd ($746) | 29.8% | 11.7% | 8.2% | 10.9% | 10.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | |
| Continental Holdings Ltd ($513) | 8.3x | | 20.1x | 92.9x | 4,203.6x |
| China International Marine Containers Group Co Ltd ($2039) | 2.8x | 4.0x | 4.7x | 5.8x | |
| VS International Group Ltd ($1002) | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x |
| Launch Tech Co Ltd ($2488) | -0.4x | 7.6x | 2.4x | 3.9x | |
| |
|---|
| Median (21 companies) | 0.1x | -0.3x | -0.3x | -0.2x | -0.1x |
|---|
| Lee & Man Chemical Co Ltd ($746) | -0.3x | -0.2x | 1.5x | 2.2x | 2.5x |
