HK Electric Investments & HK Electric Investments Ltd CAPEX jumped on 34.6% in 2015 and Revenue increased on 6.7%
15/03/2016 • About HK Electric Investments & HK Electric Investments Ltd (
$2638) • By InTwits
HK Electric Investments & HK Electric Investments Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has potentially unprofitable business model: ROIC is at 4.9%
- It operates with high leverage: Net Debt/EBITDA is 5.1x while industry average is 3.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HK Electric Investments & HK Electric Investments Ltd ($2638) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,185 | 10,400 | 10,209 | 10,504 | 11,210 | 6.7% |
| Gross Profit | 6,162 | 6,247 | 5,987 | 5,672 | 6,021 | 6.2% |
| EBITDA | 7,410 | 7,547 | 7,919 | 7,698 | 8,035 | 4.4% |
| Net Income | 4,480 | 4,542 | 5,180 | 3,201 | 3,591 | 12.2% |
Balance Sheet
|
|---|
| Cash | 24 | 8 | 1,060 | 3,236 | 5,977 | 84.7% |
| Short Term Debt | 617 | 5,316 | 503 | 520 | 900 | 73.1% |
| Long Term Debt | 15,158 | 11,169 | 10,962 | 47,349 | 46,317 | -2.2% |
Cash flow
|
|---|
| Capex | 2,478 | 2,605 | | 1,662 | 2,237 | 34.6% |
Ratios
|
|---|
| Revenue growth | -1.7% | 2.1% | -1.8% | 2.9% | 6.7% | |
| EBITDA growth | -1.5% | 1.9% | 4.9% | -2.8% | 4.4% | |
| Gross Margin | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% | -0.3% |
| EBITDA Margin | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% | -1.6% |
| Net Income Margin | 44.0% | 43.7% | 50.7% | 30.5% | 32.0% | 1.6% |
| CAPEX, % of revenue | 24.3% | 25.0% | | 15.8% | 20.0% | 4.1% |
| ROIC | 16.1% | 15.5% | 17.7% | 7.3% | 4.9% | -2.3% |
| ROE | 31.3% | 32.2% | 38.7% | 10.4% | 7.3% | -3.1% |
| Net Debt/EBITDA | 2.1x | 2.2x | 1.3x | 5.8x | 5.1x | -0.7x |
Revenue and profitability
HK Electric Investments & HK Electric Investments Ltd's Revenue increased on 6.7% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 73.3% to 71.7% in 2015.
Gross Margin showed almost no change in 2015.
Net Income marign increased slightly on 1.6 pp from 30.5% to 32.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 20.0%. HK Electric Investments & HK Electric Investments Ltd showed decline in CAPEX/Revenue of 5.1 pp from 25.0% in 2012 to 20.0% in 2015.
Return on investment
The company operates at low ROIC (4.93%) and ROE (7.31%). ROIC decreased on 2.3 pp from 7.3% to 4.9% in 2015. ROE decreased on 3.1 pp from 10.4% to 7.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.1x and Debt / EBITDA is 5.9x. Net Debt / EBITDA dropped on 0.7x from 5.8x to 5.1x in 2015. Debt decreased slightly on 1.4% in 2015 while cash jumped on 84.7% in 2015.
Management team
Wan Chi Tin is a HK Electric Investments & HK Electric Investments Ltd's CEO. Wan Chi Tin has spent 4 years at the company.
Appendix 1: Peers in Electric
Below you can find HK Electric Investments & HK Electric Investments Ltd benchmarking vs. other companies in Electric 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 |
|---|
| Tianjin Development Hldgs Ltd ($882) | 9.1% | 10.6% | 27.3% | 37.6% | |
| Enerchina Holdings Ltd ($622) | 193.3% | -15.4% | 6.8% | 28.5% | |
| Amber Energy Ltd ($90) | 10.1% | -14.7% | 21.2% | 20.1% | |
| CGN Power Co Ltd ($1816) | | 10.7% | -1.2% | 19.3% | 12.3% |
| Huadian Power International Corp Ltd ($1071) | 20.1% | 8.8% | 11.8% | 15.1% | |
| |
|---|
| Median (15 companies) | 17.0% | 8.8% | 11.8% | 4.9% | 12.3% |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | | 2.1% | -1.8% | 2.9% | 6.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 60.5% | 60.0% | 63.5% | 85.6% | |
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | |
| CGN Power Co Ltd ($1816) | 48.3% | 46.5% | 46.9% | 48.6% | 47.9% |
| Huadian Power International Corp Ltd ($1071) | 8.9% | | | 27.1% | |
| Huaneng Power International Inc ($902) | | | | 24.8% | |
| |
|---|
| Median (7 companies) | 28.6% | 27.8% | 46.9% | 27.1% | 47.9% |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | |
| Huaneng Renewables Corp Ltd ($958) | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% |
| China Datang Corp Renewable Power Co Ltd ($1798) | 100.2% | 90.5% | 82.8% | 87.0% | |
| CGN Power Co Ltd ($1816) | 64.2% | 66.0% | 62.6% | 60.5% | 59.4% |
| Huadian Fuxin Energy Corp Ltd ($816) | 43.8% | 46.5% | 49.6% | 54.8% | |
| |
|---|
| Median (15 companies) | 23.8% | 28.5% | 33.9% | 34.1% | 59.4% |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% |
| China Power New Energy Development Co Ltd ($735) | 21.5% | 82.2% | 80.1% | 119.5% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 273.4% | 157.1% | 81.7% | 106.3% | |
| CGN Power Co Ltd ($1816) | 78.4% | 47.5% | 57.2% | 94.5% | 50.0% |
| Huadian Fuxin Energy Corp Ltd ($816) | 78.6% | 62.2% | 54.3% | 91.8% | |
| |
|---|
| Median (15 companies) | 23.6% | 27.4% | 25.1% | 18.9% | 50.0% |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 24.3% | 25.0% | | 15.8% | 20.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 5.4% | 5.5% | 6.1% | 46.5% | |
| Huaneng Power International Inc ($902) | 4.0% | 7.3% | 10.3% | 11.3% | |
| Huadian Power International Corp Ltd ($1071) | 2.7% | 5.0% | 8.4% | 10.4% | |
| CLP Holdings Ltd ($2) | 7.8% | 7.0% | 4.8% | 8.5% | 12.8% |
| China Resources Power Holdings Co Ltd ($836) | 5.9% | 7.7% | 9.7% | 8.0% | |
| |
|---|
| Median (15 companies) | 4.6% | 5.4% | 6.1% | 6.1% | 6.1% |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 16.1% | 15.5% | 17.7% | 7.3% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Datang Corp Renewable Power Co Ltd ($1798) | 8.1x | 9.1x | 8.2x | 8.7x | |
| CGN Power Co Ltd ($1816) | 4.7x | 6.5x | 6.7x | 7.8x | 8.4x |
| Amber Energy Ltd ($90) | 3.0x | 5.8x | 6.4x | 7.3x | |
| Huaneng Renewables Corp Ltd ($958) | 6.0x | 7.7x | 6.6x | 7.3x | 7.1x |
| Huadian Fuxin Energy Corp Ltd ($816) | 9.3x | 6.9x | 6.2x | 6.5x | |
| |
|---|
| Median (14 companies) | 6.0x | 5.7x | 5.5x | 4.9x | 7.1x |
|---|
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 2.1x | 2.2x | 1.3x | 5.8x | 5.1x |
