Welling Holding Ltd EBITDA dropped on 30.9% in 2015 and EBITDA Margin decreased on 2.2 pp from 10.8% to 8.6%
14/03/2016 • About Welling Holding Ltd (
$382) • By InTwits
Welling Holding Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Welling Holding Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's in pair with industry average of 3.3%.
- CAPEX is quite volatile: 1,028 in 2015, 1,222 in 2014, 215 in 2013, 284 in 2012, 430 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.
Welling Holding Ltd ($382) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,490 | 7,788 | 8,882 | 9,273 | 8,040 | -13.3% |
| Gross Profit | 1,202 | 1,224 | 1,422 | 1,424 | 1,110 | -22.1% |
| SG&A | 429 | 498 | 501 | 555 | 631 | 13.8% |
| EBITDA | 906 | 928 | 1,134 | 999 | 690 | -30.9% |
| Net Income | 608 | 640 | 785 | 678 | 525 | -22.6% |
Balance Sheet
|
|---|
| Cash | 858 | 826 | 1,825 | 1,940 | 1,236 | -36.3% |
| Short Term Debt | 239 | 307 | 341 | 88 | 21 | -76.5% |
| Long Term Debt | 94 | 129 | 43 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 411 | 331 | 203 | 275 | 215 | -21.6% |
Ratios
|
|---|
| Revenue growth | 45.0% | -25.8% | 14.1% | 4.4% | -13.3% | |
| EBITDA growth | 19.0% | 2.4% | 22.2% | -12.0% | -30.9% | |
| Gross Margin | 11.5% | 15.7% | 16.0% | 15.4% | 13.8% | -1.6% |
| EBITDA Margin | 8.6% | 11.9% | 12.8% | 10.8% | 8.6% | -2.2% |
| Net Income Margin | 5.8% | 8.2% | 8.8% | 7.3% | 6.5% | -0.8% |
| SG&A, % of revenue | 4.1% | 6.4% | 5.6% | 6.0% | 7.8% | 1.9% |
| CAPEX, % of revenue | 3.9% | 4.3% | 2.3% | 3.0% | 2.7% | -0.3% |
| ROIC | 29.4% | 23.5% | 24.3% | 18.7% | 10.7% | -7.9% |
| ROE | 27.5% | 23.1% | 22.9% | 16.8% | 12.2% | -4.6% |
| Net Debt/EBITDA | -0.6x | -0.4x | -1.3x | -1.9x | -1.8x | 0.1x |
Revenue and profitability
Welling Holding Ltd's Revenue dropped on 13.3% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 10.8% to 8.6% in 2015.
Gross Margin decreased slightly on 1.6 pp from 15.4% to 13.8% in 2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 6.0% to 7.8% in 2015.
Net Income marign decreased slightly on 0.79 pp from 7.3% to 6.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.7%. Welling Holding Ltd showed small CAPEX/Revenue decline of 1.6 pp from 4.3% in 2012 to 2.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at good ROE (12.20%) while ROIC is low (10.72%). ROIC decreased on 7.9 pp from 18.7% to 10.7% in 2015. ROE decreased on 4.6 pp from 16.8% to 12.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is 0.0x. Net Debt / EBITDA increased on 0.1x from -1.9x to -1.8x in 2015. Debt dropped on 76.5% in 2015 while cash dropped on 36.3% in 2015.
Appendix 1: Peers in Home Furnishings
Below you can find Welling Holding Ltd benchmarking vs. other companies in Home Furnishings 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 |
|---|
| Jiu Rong Holdings Ltd ($2358) | | | 136.9% | 438.7% | |
| See Corp Ltd ($491) | | 13.7% | -31.9% | 134.1% | 126.9% |
| BEP International Holdings Ltd ($2326) | | 44.7% | -41.5% | 46.2% | 187.9% |
| Aupu Group Holding Co Ltd ($477) | 2.6% | 5.7% | 9.0% | 26.4% | |
| Alco Holdings Ltd ($328) | | -10.2% | -32.6% | 22.8% | 11.8% |
| |
|---|
| Median (26 companies) | 21.6% | 2.3% | 5.4% | 1.1% | 0.9% |
|---|
| Welling Holding Ltd ($382) | | -25.8% | 14.1% | 4.4% | -13.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aupu Group Holding Co Ltd ($477) | 47.1% | 48.6% | 45.0% | 47.8% | |
| South East Group Ltd ($726) | 36.2% | 25.5% | 51.6% | 38.8% | 82.4% |
| Grande Holdings Ltd/The ($186) | 19.9% | 23.7% | 25.4% | 29.0% | |
| Samson Holding Ltd ($531) | 24.9% | 25.6% | 25.4% | 27.3% | |
| Gold Peak Industries Holding Ltd ($40) | 26.8% | 25.8% | 23.6% | 24.9% | 25.6% |
| |
|---|
| Median (26 companies) | 16.5% | 18.9% | 18.2% | 16.7% | 14.9% |
|---|
| Welling Holding Ltd ($382) | 11.5% | 15.7% | 16.0% | 15.4% | 13.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| See Corp Ltd ($491) | -58.7% | -38.4% | -59.5% | 32.0% | -35.6% |
| Aupu Group Holding Co Ltd ($477) | 18.1% | 15.3% | 17.6% | 30.1% | |
| Hing Lee HK Holdings Ltd ($396) | 9.3% | -3.0% | 4.3% | 9.4% | |
| Samson Holding Ltd ($531) | 6.2% | 7.5% | 6.6% | 9.4% | |
| Mastercraft International Holdings Ltd ($8146) | 7.6% | 7.4% | 8.2% | 8.5% | |
| |
|---|
| Median (26 companies) | 5.9% | 4.9% | 4.5% | 4.5% | 4.3% |
|---|
| Welling Holding Ltd ($382) | 8.6% | 11.9% | 12.8% | 10.8% | 8.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royale Furniture Holdings Ltd ($1198) | 35.8% | | 14.1% | 16.5% | |
| Sunrise China Technology Group Ltd ($8226) | 7.9% | 126.4% | 69.3% | 7.4% | |
| Aupu Group Holding Co Ltd ($477) | 1.9% | 1.5% | 6.3% | 5.3% | |
| Alco Holdings Ltd ($328) | 5.1% | 0.8% | 1.4% | 5.2% | 1.3% |
| Skyworth Digital Holdings Ltd ($751) | 2.2% | 3.0% | 2.9% | 4.9% | 2.9% |
| |
|---|
| Median (26 companies) | 1.8% | 1.5% | 1.9% | 2.7% | 2.8% |
|---|
| Welling Holding Ltd ($382) | 3.9% | 4.3% | 2.3% | 3.0% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mastercraft International Holdings Ltd ($8146) | 76.2% | 54.4% | 38.6% | 36.4% | |
| Aupu Group Holding Co Ltd ($477) | 18.0% | 14.8% | 17.0% | 32.2% | |
| Haier Electronics Group Co Ltd ($1169) | 45.3% | 37.5% | 32.8% | 20.8% | |
| Tonly Electronics Holdings Ltd ($1249) | 7.0% | 4.2% | 7.1% | 15.9% | 11.7% |
| Skyworth Digital Holdings Ltd ($751) | 11.7% | 11.6% | 13.4% | 10.9% | 23.0% |
| |
|---|
| Median (26 companies) | 5.0% | 3.7% | 4.4% | 3.9% | 4.1% |
|---|
| Welling Holding Ltd ($382) | 29.4% | 23.5% | 24.3% | 18.7% | 10.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kasen International Holdings Ltd ($496) | 9.6x | 2.2x | 3.7x | 44.9x | |
| Chigo Holding Ltd ($449) | 27.0x | 12.3x | 11.8x | 14.5x | |
| Gold Peak Industries Holding Ltd ($40) | 5.6x | 10.2x | 3.4x | 3.6x | 2.8x |
| Skyworth Digital Holdings Ltd ($751) | 1.1x | 1.2x | 1.5x | 1.2x | -0.2x |
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 3.3x | 1.2x | 0.9x | 1.0x | |
| |
|---|
| Median (19 companies) | 0.2x | -0.2x | -0.9x | -0.8x | -2.9x |
|---|
| Welling Holding Ltd ($382) | -0.6x | -0.4x | -1.3x | -1.9x | -1.8x |
