Lee Hing Development Ltd reports 115% EBITDA decline and 92.9 pp EBITDA Margin decline from 66.1% to -26.8%
09/03/2016 • About Lee Hing Development Ltd (
$68) • By InTwits
Lee Hing Development Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lee Hing Development Ltd is a company in decline: 2015 revenue growth was -63.0%, 5 years revenue CAGR was -22.9%
- The company operates at negative EBITDA Margin: -26.8%
- EBITDA Margin is quite volatile: -26.8% in 2015, 66.1% in 2014, -79.6% in 2013, 79.4% in 2012, 35.0% in 2011
- Lee Hing Development Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.0%. At the same time it's a lot of higher than industry average of 19.7%.
- CAPEX is quite volatile: 0.11 in 2015, 0.11 in 2014, 2.1 in 2013, 1.7 in 2012, 66.0 in 2011
- The company has unprofitable business model: ROIC is at -0.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lee Hing Development Ltd ($68) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 56.2 | 110.2 | 37.2 | 101.1 | 37.4 | -63.0% |
| EBITDA | 19.7 | 87.5 | -29.6 | 66.8 | -10.0 | -115.0% |
| Net Income | 12.1 | 95.6 | -24.5 | 63.0 | -5.5 | -108.7% |
Balance Sheet
|
|---|
| Cash | 421.9 | 585.1 | 65.7 | 46.9 | 5.6 | -88.1% |
| Short Term Debt | 50.8 | 520.7 | 104.5 | 226.7 | 190.3 | -16.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 182.7 | |
Cash flow
|
|---|
| Capex | 66.0 | 1.7 | 2.1 | 0.1 | 0.1 | -4.5% |
Ratios
|
|---|
| Revenue growth | -59.2% | 96.1% | -66.2% | 171.5% | -63.0% | |
| EBITDA growth | -86.3% | 345.1% | -133.9% | -325.6% | -115.0% | |
| EBITDA Margin | 35.0% | 79.4% | -79.6% | 66.1% | -26.8% | -92.9% |
| Net Income Margin | 21.5% | 86.8% | -65.9% | 62.3% | -14.7% | -77.0% |
| CAPEX, % of revenue | 117.4% | 1.5% | 5.7% | 0.1% | 0.3% | 0.2% |
| ROIC | 1.0% | 3.8% | -1.0% | 1.9% | -0.4% | -2.2% |
| ROE | 0.7% | 4.8% | -0.9% | 1.9% | -0.2% | -2.1% |
| Net Debt/EBITDA | -18.9x | -0.7x | | 2.7x | | -2.7x |
Revenue and profitability
The company's Revenue dropped on 63.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 92.9 pp from 66.1% to -26.8% in 2015.
Net Income marign dropped on 77.0 pp from 62.3% to -14.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.28%. The company's CAPEX/Revenue decreased slightly on 1.2 pp from 1.5% in 2012 to 0.28% in 2015. It's average CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at negative ROIC (-0.37%) and ROE (-0.21%). ROIC decreased on 2.2 pp from 1.9% to -0.37% in 2015. ROE decreased on 2.1 pp from 1.9% to -0.21% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -6.5x and Debt / EBITDA is . Net Debt / EBITDA dropped on 2.7x from 2.7x to in 2015. Debt surged on 64.6% in 2015 while cash dropped on 88.1% in 2015.
Appendix 1: Peers in Investment Companies
Below you can find Lee Hing Development Ltd benchmarking vs. other companies in Investment Companies 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 |
|---|
| DT Capital Ltd ($356) | | | -49.8% | 1,065.5% | |
| Capital VC Ltd ($2324) | | | | 489.2% | 861.9% |
| Oriental Explorer Holdings Ltd ($430) | | | -62.7% | 414.5% | |
| China Merchants China Direct Investments Ltd ($133) | | | 59.1% | 255.9% | |
| Eternity Investment Ltd ($764) | 1.2% | -14.8% | -61.8% | 243.8% | |
| |
|---|
| Median (24 companies) | -3.2% | -10.9% | 4.8% | 3.4% | 60.5% |
|---|
| Lee Hing Development Ltd ($68) | | 96.1% | -66.2% | 171.5% | -63.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Eternity Investment Ltd ($764) | 100.0% | | | 86.6% | |
| City e-Solutions Ltd ($557) | 69.0% | 81.1% | 81.5% | 81.6% | 79.1% |
| China Properties Investment Holdings Ltd ($736) | 10.6% | 47.5% | 40.8% | 46.2% | 87.2% |
| Infinity Financial Group Holdings Ltd ($1152) | 24.3% | 19.0% | 17.5% | 22.4% | |
| AVIC Joy Holdings HK Ltd ($260) | 20.4% | 19.5% | 20.9% | 14.0% | |
| |
|---|
| Median (7 companies) | 22.4% | 30.2% | 19.2% | 22.4% | 83.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Capital VC Ltd ($2324) | -2,944.6% | | 36.7% | 93.1% | 99.3% |
| Unity Investments Holdings Ltd ($913) | | | 89.0% | 90.8% | |
| Oriental Explorer Holdings Ltd ($430) | | 93.6% | 100.5% | 90.4% | |
| China Merchants China Direct Investments Ltd ($133) | | 68.6% | 82.2% | 89.3% | |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 39.4% | | 101.3% | 85.9% | 85.8% |
| |
|---|
| Median (27 companies) | 4.6% | 5.9% | -6.7% | 0.2% | 26.4% |
|---|
| Lee Hing Development Ltd ($68) | 35.0% | 79.4% | -79.6% | 66.1% | -26.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CK Hutchison Holdings Ltd ($1) | 3.9% | 0.7% | 1.0% | 503.6% | |
| Opes Asia Development Ltd ($810) | | | 11.3% | 76.1% | |
| Cosmopolitan International Holdings Ltd ($120) | 0.0% | 0.4% | 1.8% | 55.2% | |
| Great China Properties Holdings Ltd ($21) | 1.7% | 6.8% | 0.9% | 30.9% | |
| China Properties Investment Holdings Ltd ($736) | 215.9% | 55.3% | 3.0% | 20.8% | 58.1% |
| |
|---|
| Median (29 companies) | 2.3% | 0.9% | 0.6% | 1.0% | 2.6% |
|---|
| Lee Hing Development Ltd ($68) | 117.4% | 1.5% | 5.7% | 0.1% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Unity Investments Holdings Ltd ($913) | -69.6% | -36.2% | 26.4% | 47.4% | |
| China Merchants China Direct Investments Ltd ($133) | -3.2% | 4.8% | 8.8% | 28.6% | |
| Capital VC Ltd ($2324) | -5.0% | | | 21.8% | 100.7% |
| Shanghai International Shanghai Growth Investment Ltd ($770) | 9.7% | -15.9% | -51.2% | 18.4% | |
| Oriental Explorer Holdings Ltd ($430) | -8.5% | 9.3% | 3.2% | 14.4% | |
| |
|---|
| Median (37 companies) | -5.0% | -3.1% | -2.4% | -5.3% | -0.2% |
|---|
| Lee Hing Development Ltd ($68) | 1.0% | 3.8% | -1.0% | 1.9% | -0.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Harmonic Strait Financial Holdings Ltd ($33) | 1.8x | -1.2x | | 162.5x | |
| AVIC Joy Holdings HK Ltd ($260) | -0.5x | 0.2x | 15.0x | 19.6x | |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 9.3x | | 12.5x | 9.5x | 11.2x |
| CK Hutchison Holdings Ltd ($1) | 1.8x | 1.9x | 0.6x | 7.2x | |
| Unity Investments Holdings Ltd ($913) | | | 0.0x | -0.0x | |
| |
|---|
| Median (14 companies) | -0.6x | -1.2x | 0.3x | -1.0x | -0.5x |
|---|
| Lee Hing Development Ltd ($68) | -18.9x | -0.7x | | 2.7x | |
