South China China Ltd Net Debt / EBITDA dropped on 2,815.0x from 2,842.3x to 27.3x in 2015 while Revenue increased on 7.8%
15/03/2016 • About South China China Ltd (
$413) • By InTwits
South China China Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- South China China Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.2%
- EBITDA Margin is quite volatile: 3.5% in 2015, 0.0% in 2014, 1.7% in 2013, -0.6% in 2012, 5.3% in 2011
- South China China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 317 in FY2015, 439 in FY2014, 961 in FY2013, 364 in FY2012, 1,151 in FY2011
- The company has potentially unprofitable business model: ROIC is at 0.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
South China China Ltd ($413) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,098 | 2,354 | 3,014 | 3,160 | 3,407 | 7.8% |
| Gross Profit | 429 | 305 | 383 | 384 | 504 | 31.3% |
| SG&A | 359 | 398 | 441 | 517 | 579 | 12.2% |
| EBITDA | 164 | -15 | 51 | 1 | 118 | 10,915.4% |
| Net Income | 301 | 329 | 286 | 190 | 157 | -17.4% |
Balance Sheet
|
|---|
| Cash | 428 | 256 | 392 | 320 | 486 | 52.1% |
| Short Term Debt | 739 | 1,046 | 991 | 2,039 | 1,959 | -3.9% |
| Long Term Debt | 68 | 749 | 1,315 | 1,314 | 1,741 | 32.5% |
Cash flow
|
|---|
| Capex | 160 | 109 | 129 | 144 | 65 | -55.2% |
Ratios
|
|---|
| Revenue growth | 17.0% | -24.0% | 28.0% | 4.9% | 7.8% | |
| EBITDA growth | 9.7% | -109.1% | -441.0% | -97.9% | 10,915.4% | |
| Gross Margin | 13.8% | 13.0% | 12.7% | 12.1% | 14.8% | 2.6% |
| EBITDA Margin | 5.3% | -0.6% | 1.7% | 0.0% | 3.5% | 3.4% |
| Net Income Margin | 9.7% | 14.0% | 9.5% | 6.0% | 4.6% | -1.4% |
| SG&A, % of revenue | 11.6% | 16.9% | 14.6% | 16.3% | 17.0% | 0.7% |
| CAPEX, % of revenue | 5.2% | 4.6% | 4.3% | 4.6% | 1.9% | -2.7% |
| ROIC | 2.9% | -1.3% | -0.2% | -1.2% | 0.2% | 1.4% |
| ROE | 12.3% | 9.9% | 7.0% | 4.3% | 3.1% | -1.2% |
| Net Debt/EBITDA | 2.3x | | 37.5x | 2,842.3x | 27.3x | -2,815.0x |
Revenue and profitability
South China China Ltd's Revenue increased on 7.8% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.4 pp from 0.034% to 3.5% in 2015.
Gross Margin increased on 2.6 pp from 12.1% to 14.8% in 2015. SG&A as a % of Revenue increased slightly on 0.66 pp from 16.3% to 17.0% in 2015.
Net Income marign decreased slightly on 1.4 pp from 6.0% to 4.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.9%. South China China Ltd showed decline in CAPEX/Revenue of 2.7 pp from 4.6% in 2012 to 1.9% in 2015. It's average CAPEX/Revenue for the last three years was 3.6%.South China China Ltd maintained rich investment policy and has spent a big chunk of EBITDA (54.9%) to CAPEX.
Return on investment
The company operates at low ROIC (0.23%) and ROE (3.14%). ROIC increased slightly on 1.4 pp from -1.2% to 0.23% in 2015. ROE decreased slightly on 1.2 pp from 4.3% to 3.1% in 2015.
Leverage (Debt)
Debt level is 27.3x Net Debt / EBITDA and 31.5x Debt / EBITDA. Net Debt / EBITDA dropped on 2,815.0x from 2,842.3x to 27.3x in 2015. Debt surged on 10.4% in 2015 while cash surged on 52.1% in 2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find South China China Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| CSR Corp Ltd ($1766) | 24.0% | 12.0% | 9.7% | 123.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | | 59.5% | 45.9% | 45.0% | 26.9% |
| 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) | 23.4% | -1.8% | -0.7% | 8.2% | -7.2% |
|---|
| South China China Ltd ($413) | | -24.0% | 28.0% | 4.9% | 7.8% |
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% |
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | 39.6% |
| 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% | |
| |
|---|
| Median (24 companies) | 21.0% | 19.8% | 20.8% | 24.9% | 21.9% |
|---|
| South China China Ltd ($413) | 13.8% | 13.0% | 12.7% | 12.1% | 14.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | 37.6% |
| 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% |
| |
|---|
| Median (25 companies) | 10.7% | 8.1% | 9.8% | 9.8% | 6.0% |
|---|
| South China China Ltd ($413) | 5.3% | -0.6% | 1.7% | 0.0% | 3.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | 22.8% |
| 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% | 7.6% |
| |
|---|
| Median (25 companies) | 5.0% | 4.9% | 4.2% | 4.2% | 4.9% |
|---|
| South China China Ltd ($413) | 5.2% | 4.6% | 4.3% | 4.6% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | 27.6% |
| 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% | 19.4% |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | |
| |
|---|
| Median (25 companies) | 8.0% | 4.4% | 4.4% | 4.4% | 1.9% |
|---|
| South China China Ltd ($413) | 2.9% | -1.3% | -0.2% | -1.2% | 0.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | |
| Lee & Man Chemical Co Ltd ($746) | -0.3x | -0.2x | 1.5x | 2.2x | 2.5x |
| |
|---|
| Median (21 companies) | -0.3x | -0.3x | -0.3x | -0.2x | 0.8x |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | 27.3x |
