Power Assets Holdings Ltd reports 2,462 pp EBITDA Margin decline from 2,533% to 71.2% in 2015 and 38.6% Revenue decline
16/03/2016 • About Power Assets Holdings Ltd (
$6) • By InTwits
Power Assets Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Power Assets Holdings Ltd is a company in decline: 2015 revenue growth was -38.6%, 5 years revenue CAGR was -33.9%
- EBITDA Margin is quite volatile: 71.2% in 2015, 2,533.1% in 2014, 68.0% in 2013, 66.2% in 2012, 64.6% in 2011
- Power Assets Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.4%. At the same time it's a lot of higher than industry average of 31.4%.
- CAPEX is quite volatile: 1 in 2015, 123 in 2014, 1,934 in 2013, 2,605 in 2012, 2,480 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Power Assets Holdings Ltd ($6) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,201 | 10,415 | 11,578 | 2,131 | 1,308 | -38.6% |
| Gross Profit | 6,169 | 6,253 | 7,350 | 1,824 | 1,300 | -28.7% |
| EBITDA | 6,590 | 6,895 | 7,868 | 53,980 | 931 | -98.3% |
| Net Income | 9,075 | 9,729 | 11,165 | 61,005 | 7,732 | -87.3% |
Balance Sheet
|
|---|
| Cash | 4,522 | 5,391 | 5,297 | 46,854 | 66,097 | 41.1% |
| Short Term Debt | 617 | 5,317 | 503 | 0 | 0 | |
| Long Term Debt | 23,009 | 19,282 | 21,845 | 10,204 | 9,405 | -7.8% |
Cash flow
|
|---|
| Capex | 2,480 | 2,605 | 1,934 | 123 | 1 | -99.2% |
Ratios
|
|---|
| Revenue growth | -1.6% | 2.1% | 11.2% | -81.6% | -38.6% | |
| EBITDA growth | -11.6% | 4.6% | 14.1% | 586.1% | -98.3% | |
| Gross Margin | 60.5% | 60.0% | 63.5% | 85.6% | 99.4% | 13.8% |
| EBITDA Margin | 64.6% | 66.2% | 68.0% | 2,533.1% | 71.2% | -2,461.9% |
| Net Income Margin | 89.0% | 93.4% | 96.4% | 2,862.7% | 591.1% | -2,271.6% |
| CAPEX, % of revenue | 24.3% | 25.0% | 16.7% | 5.8% | 0.1% | -5.7% |
| ROIC | 5.4% | 5.5% | 6.1% | 46.5% | 0.7% | -45.8% |
| ROE | 15.8% | 16.0% | 16.8% | 63.4% | 6.3% | -57.1% |
| Net Debt/EBITDA | 2.9x | 2.8x | 2.2x | -0.7x | -60.9x | -60.2x |
Revenue and profitability
The company's Revenue dropped on 38.6% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 2,462 pp from 2,533% to 71.2% in 2015.
Gross Margin surged on 13.8 pp from 85.6% to 99.4% in 2015.
Net Income marign dropped on 2,272 pp from 2,863% to 591% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.076% in 2015. CAPEX/Revenue dropped on 24.9 pp from 25.0% in 2012 to 0.076% in 2015. For the last three years the average CAPEX/Revenue was 7.5%.
Return on investment
The company operates at low ROIC (0.70%) and ROE (6.27%). ROIC dropped on 45.8 pp from 46.5% to 0.70% in 2015. ROE dropped on 57.1 pp from 63.4% to 6.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -60.9x and Debt / EBITDA is 10.1x. Net Debt / EBITDA dropped on 60.2x from -0.7x to -60.9x in 2015. Debt decreased on 7.8% in 2015 while cash surged on 41.1% in 2015.
Management team
Power Assets Holdings Ltd's CEO is Tsai Chao Chung "Charles". Tsai Chao Chung "Charles" has 4 years tenure at the company. The company's CFO Ham Kee Chan "Ivan" has spent 6 years at the company.
Appendix 1: Peers in Electric
Below we provide Power Assets Holdings Ltd benchmarking against other companies in Electric industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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% | |
| CGN Meiya Power Holdings Co Ltd ($1811) | | 23.4% | 11.2% | 30.8% | -16.5% |
| 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% |
| |
|---|
| Median (16 companies) | 18.5% | 8.8% | 11.6% | 6.1% | 6.7% |
|---|
| Power Assets Holdings Ltd ($6) | | 2.1% | 11.2% | -81.6% | -38.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% |
| 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% | 50.8% |
|---|
| Power Assets Holdings Ltd ($6) | 60.5% | 60.0% | 63.5% | 85.6% | 99.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
| 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 (16 companies) | 22.3% | 25.5% | 32.1% | 33.7% | 59.4% |
|---|
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | 71.2% |
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 (16 companies) | 22.9% | 29.6% | 28.3% | 18.5% | 20.0% |
|---|
| Power Assets Holdings Ltd ($6) | 24.3% | 25.0% | 16.7% | 5.8% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| China Power International Development Ltd ($2380) | 4.0% | 5.7% | 7.5% | 8.0% | |
| |
|---|
| Median (16 companies) | 4.6% | 5.2% | 6.7% | 6.0% | 5.5% |
|---|
| Power Assets Holdings Ltd ($6) | 5.4% | 5.5% | 6.1% | 46.5% | 0.7% |
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 (15 companies) | 5.9x | 5.8x | 5.6x | 5.1x | 7.1x |
|---|
| Power Assets Holdings Ltd ($6) | 2.9x | 2.8x | 2.2x | -0.7x | -60.9x |
