TK Group Holdings Ltd CAPEX dropped on 33.1% in 2015 while Revenue jumped on 20.0%
15/03/2016 • About TK Group Holdings Ltd (
$2283) • By InTwits
TK Group Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TK Group Holdings Ltd is a fast growth stock: 2015 revenue growth was 20.0%, 5 year revenue CAGR was 24.5% at 2015 ROIC 27.6%
- TK Group Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.3%. At the same time it's a lot of higher than industry average of 8.4%.
- CAPEX is quite volatile: 123 in 2015, 183 in 2014, 97.6 in 2013, 146 in 2012, 69.9 in 2011
- The company has highly profitable business model: ROIC is at 27.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TK Group Holdings Ltd ($2283) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 782 | 1,096 | 1,198 | 1,339 | 1,606 | 20.0% |
| Gross Profit | 280 | 372 | 332 | 365 | 419 | 14.6% |
| SG&A | 159 | 198 | 186 | 197 | 230 | 16.8% |
| EBITDA | 172 | 234 | 226 | 239 | 276 | 15.2% |
| Net Income | 84 | 135 | 121 | 154 | 187 | 21.5% |
Balance Sheet
|
|---|
| Cash | 80 | 94 | 333 | 267 | 319 | 19.6% |
| Short Term Debt | 196 | 162 | 116 | 85 | 137 | 62.0% |
| Long Term Debt | 50 | 52 | 53 | 47 | 68 | 45.9% |
Cash flow
|
|---|
| Capex | 70 | 146 | 98 | 183 | 123 | -33.1% |
Ratios
|
|---|
| Revenue growth | 45.8% | 40.2% | 9.3% | 11.8% | 20.0% | |
| EBITDA growth | 96.5% | 35.9% | -3.6% | 5.9% | 15.2% | |
| Gross Margin | 35.8% | 33.9% | 27.7% | 27.3% | 26.1% | -1.2% |
| EBITDA Margin | 22.1% | 21.4% | 18.9% | 17.9% | 17.2% | -0.7% |
| Net Income Margin | 10.8% | 12.3% | 10.1% | 11.5% | 11.6% | 0.2% |
| SG&A, % of revenue | 20.4% | 18.1% | 15.5% | 14.7% | 14.3% | -0.4% |
| CAPEX, % of revenue | 8.9% | 13.3% | 8.1% | 13.7% | 7.6% | -6.0% |
| ROIC | 34.0% | 36.8% | 31.1% | 29.4% | 27.6% | -1.8% |
| ROE | 50.6% | 57.0% | 37.5% | 34.3% | 33.0% | -1.3% |
| Net Debt/EBITDA | 1.0x | 0.5x | -0.7x | -0.6x | -0.4x | 0.2x |
Revenue and profitability
The company's Revenue surged on 20.0% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.71 pp from 17.9% to 17.2% in 2015.
Gross Margin decreased slightly on 1.2 pp from 27.3% to 26.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 TK Group Holdings Ltd had CAPEX/Revenue of 7.6%. CAPEX/Revenue decreased on 5.7 pp from 13.3% in 2012 to 7.6% in 2015. Average CAPEX/Revenue for the last three years was 9.8%.
Return on investment
The company operates at high and attractive ROIC (27.61%) and ROE (33.05%). ROIC decreased slightly on 1.8 pp from 29.4% to 27.6% in 2015. ROE decreased slightly on 1.3 pp from 34.3% to 33.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.7x. Net Debt / EBITDA jumped on 0.2x from -0.6x to -0.4x in 2015. Debt surged on 56.3% in 2015 while cash jumped on 19.6% in 2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find TK Group Holdings 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% | -7.1% | -0.7% | 6.7% | -7.2% |
|---|
| TK Group Holdings Ltd ($2283) | | 40.2% | 9.3% | 11.8% | 20.0% |
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) | 20.6% | 19.7% | 19.7% | 23.4% | 18.6% |
|---|
| TK Group Holdings Ltd ($2283) | 35.8% | 33.9% | 27.7% | 27.3% | 26.1% |
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) | 10.2% | 8.0% | 8.2% | 9.5% | 4.7% |
|---|
| TK Group Holdings Ltd ($2283) | 22.1% | 21.4% | 18.9% | 17.9% | 17.2% |
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% |
| IPE Group Ltd ($929) | 7.1% | 6.3% | 13.3% | 12.3% | |
| |
|---|
| Median (25 companies) | 5.0% | 4.7% | 4.2% | 4.2% | 4.3% |
|---|
| TK Group Holdings Ltd ($2283) | 8.9% | 13.3% | 8.1% | 13.7% | 7.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| Yusei Holdings Ltd ($96) | 8.0% | 4.2% | 7.0% | 13.6% | |
| |
|---|
| Median (25 companies) | 6.4% | 4.2% | 3.6% | 3.9% | 1.4% |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | 27.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | 27.3x |
| 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 | |
| |
|---|
| Median (21 companies) | -0.3x | -0.3x | -0.2x | 0.1x | 0.9x |
|---|
| TK Group Holdings Ltd ($2283) | 1.0x | 0.5x | -0.7x | -0.6x | -0.4x |
