First China Financial Network Holdings Ltd reports 155% Net Income decline and 150 pp EBITDA Margin decline from 124% to -25.5%
15/03/2016 • About First China Financial Network Holdings Ltd (
$8123) • By InTwits
First China Financial Network Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- First China Financial Network Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -2.4%
- The company operates at negative EBITDA Margin: -25.5%
- First China Financial Network Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -41.7% for the sames years0
- First China Financial Network Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 140.0%. At the same time it's a lot of higher than industry average of 4.3%.
- CAPEX is quite volatile: 4.0 in 2015, 3.7 in 2014, 4.1 in 2013, 0.13 in 2012, 83.0 in 2011
- The company has unprofitable business model: ROIC is at -2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
First China Financial Network Holdings Ltd ($8123) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 12.686 | 9.186 | 14.810 | 40.617 | 50.007 | 23.1% |
| Gross Profit | 12.508 | 8.584 | | 38.373 | 48.689 | 26.9% |
| EBITDA | -29.378 | -30.239 | -31.278 | 50.498 | -12.734 | -125.2% |
| Net Income | -37.856 | -39.019 | -34.034 | 114.540 | -62.850 | -154.9% |
Balance Sheet
|
|---|
| Cash | 46.302 | 20.353 | 83.132 | 306.320 | 265.902 | -13.2% |
| Short Term Debt | 37.014 | 33.168 | 14.330 | 12.378 | 10.494 | -15.2% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 82.993 | 0.129 | 4.063 | 3.657 | 3.957 | 8.2% |
Ratios
|
|---|
| Revenue growth | -74.1% | -27.6% | 61.2% | 174.3% | 23.1% | |
| EBITDA growth | -47.5% | 2.9% | 3.4% | -261.4% | -125.2% | |
| Gross Margin | 98.6% | 93.4% | | 94.5% | 97.4% | 2.9% |
| EBITDA Margin | -231.6% | -329.2% | -211.2% | 124.3% | -25.5% | -149.8% |
| Net Income Margin | -298.4% | -424.8% | -229.8% | 282.0% | -125.7% | -407.7% |
| CAPEX, % of revenue | 654.2% | 1.4% | 27.4% | 9.0% | 7.9% | -1.1% |
| ROIC | -19.9% | -24.2% | -28.0% | 8.7% | -2.4% | -11.1% |
| ROE | -24.7% | -33.2% | -31.8% | 25.1% | -8.3% | -33.4% |
| Net Debt/EBITDA | | | | -5.8x | | 5.8x |
Revenue and profitability
The company's Revenue surged on 23.1% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 28.4 pp from -16.7% to 11.7% in FY2015.
Gross Margin increased on 2.9 pp from 94.5% to 97.4% in 2015.
Net Income marign dropped on 408 pp from 282% to -126% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 First China Financial Network Holdings Ltd had CAPEX/Revenue of 7.9%. First China Financial Network Holdings Ltd's CAPEX/Revenue increased on 6.5 pp from 1.4% in 2012 to 7.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 14.8%.
Return on investment
The company operates at negative ROIC (-2.44%) and ROE (-8.27%). ROIC dropped on 11.1 pp from 8.7% to -2.4% in 2015. ROE dropped on 33.4 pp from 25.1% to -8.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -88.5x and Debt / EBITDA is . Net Debt / EBITDA jumped on 5.8x from -5.8x to in 2015. Debt dropped on 15.2% in 2015 while cash dropped on 13.2% in 2015.
Appendix 1: Peers in Diversified Finan Serv
Below you can find First China Financial Network Holdings Ltd benchmarking vs. other companies in Diversified Finan Serv 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 New Energy Power Group Ltd ($1041) | | 100.0% | 0.0% | 64,246.0% | |
| ReOrient Group Ltd ($376) | | 112.8% | 75.1% | 1,106.9% | -90.8% |
| Global Strategic Group Ltd ($8007) | | -3.9% | 2.1% | 806.3% | 681.2% |
| AID Partners Capital Holdings Ltd ($8088) | -38.7% | 0.9% | -79.5% | 655.2% | |
| Willie International Holdings Ltd ($273) | | | | 543.9% | |
| |
|---|
| Median (62 companies) | 6.8% | 1.2% | 12.9% | 24.9% | 24.9% |
|---|
| First China Financial Network Holdings Ltd ($8123) | | -27.6% | 61.2% | 174.3% | 23.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Roma Group Ltd ($8072) | | | | 99.4% | 98.7% |
| Freeman Financial Corp Ltd ($279) | 97.1% | 52.3% | 99.3% | 98.5% | |
| Chinese Strategic Holdings Ltd ($8089) | 97.9% | 99.1% | 97.9% | 97.0% | 96.6% |
| Allied Group Ltd ($373) | 94.5% | 95.1% | 94.4% | 93.6% | |
| China Fortune Financial Group Ltd ($290) | 86.7% | 91.4% | 93.7% | 91.6% | 89.0% |
| |
|---|
| Median (12 companies) | 75.0% | 57.7% | 75.1% | 81.8% | 90.3% |
|---|
| First China Financial Network Holdings Ltd ($8123) | 98.6% | 93.4% | | 94.5% | 97.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Styland Holdings Ltd ($211) | 68.6% | 198.6% | 91.5% | 161.0% | 17.9% |
| Roma Group Ltd ($8072) | 81.4% | 18.1% | 36.8% | 143.0% | 44.7% |
| Willie International Holdings Ltd ($273) | | | 75.3% | 95.2% | |
| Get Nice Holdings Ltd ($64) | 28.4% | 2.6% | 153.4% | 92.7% | 83.9% |
| Freeman Financial Corp Ltd ($279) | -52.0% | -6,089.9% | 83.0% | 83.4% | |
| |
|---|
| Median (63 companies) | 30.3% | 16.4% | 36.2% | 43.6% | 30.5% |
|---|
| First China Financial Network Holdings Ltd ($8123) | -231.6% | -329.2% | -211.2% | 124.3% | -25.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gemini Investments Holdings Ltd ($174) | 14.9% | 479.1% | 37.3% | 216.0% | 10.0% |
| China Assurance Finance Group Ltd ($8090) | | 94.7% | 68.9% | 53.3% | |
| Chinese Strategic Holdings Ltd ($8089) | 93.2% | 376.0% | 5.7% | 32.6% | 5.8% |
| AID Partners Capital Holdings Ltd ($8088) | 196.3% | 4.1% | 2.9% | 28.4% | |
| Asian Capital Holdings Ltd ($8295) | 2.3% | 0.1% | 0.2% | 15.6% | |
| |
|---|
| Median (63 companies) | 2.2% | 1.9% | 1.7% | 1.1% | 1.6% |
|---|
| First China Financial Network Holdings Ltd ($8123) | 654.2% | 1.4% | 27.4% | 9.0% | 7.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ReOrient Group Ltd ($376) | -24.9% | -45.6% | -53.5% | 128.6% | -2.8% |
| Roma Group Ltd ($8072) | | 19.6% | 43.7% | 107.8% | 13.3% |
| Convoy Financial Holdings Ltd ($1019) | 31.1% | 3.4% | 39.3% | 47.3% | |
| Willie International Holdings Ltd ($273) | -28.1% | -9.5% | 4.7% | 30.9% | |
| Value Partners Group Ltd ($806) | 8.7% | 16.8% | 16.5% | 26.8% | 9.6% |
| |
|---|
| Median (65 companies) | 4.9% | 3.9% | 4.0% | 4.7% | 3.1% |
|---|
| First China Financial Network Holdings Ltd ($8123) | -19.9% | -24.2% | -28.0% | 8.7% | -2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cash Financial Services Group Ltd ($510) | -1.1x | 7.8x | | 67.5x | |
| Far East Horizon Ltd ($3360) | 17.8x | 16.9x | 21.7x | 20.0x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 7.3x | 2.1x | 10.3x | 9.3x | 39.3x |
| China Cinda Asset Management Co Ltd ($1359) | 2.1x | 5.0x | 7.7x | 8.4x | |
| Aeon Credit Service Asia Co Ltd ($900) | 6.3x | 5.2x | 6.0x | 6.9x | 5.5x |
| |
|---|
| Median (45 companies) | -1.1x | -1.0x | 0.1x | 0.1x | -1.5x |
|---|
| First China Financial Network Holdings Ltd ($8123) | | | | -5.8x | |
