SIS International Holdings CAPEX surged on 125% in 2015 while Revenue dropped on 33.3%
16/03/2016 • About SIS International Holdings (
$529) • By InTwits
SIS International Holdings reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SIS International Holdings doesn't have a profitable business model yet: 2015 ROIC is 1.3%
- EBITDA Margin is quite volatile: 5.5% in 2015, 4.6% in 2014, 3.7% in 2013, 2.9% in 2012, 0.7% in 2011
- SIS International Holdings has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.0%. At the same time it's a lot of higher than industry average of 4.6%.
- CAPEX is quite volatile: 571 in 2015, 253 in 2014, 522 in 2013, 282 in 2012, 3.1 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 16.8x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SIS International Holdings ($529) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,328 | 2,098 | 1,644 | 1,717 | 1,146 | -33.3% |
| Gross Profit | 66 | 130 | 137 | 152 | 170 | 12.0% |
| SG&A | 59 | 71 | 96 | 116 | 95 | -17.7% |
| EBITDA | 9 | 61 | 60 | 79 | 63 | -19.5% |
| Net Income | 695 | 159 | 254 | 176 | 241 | 36.6% |
Balance Sheet
|
|---|
| Cash | 585 | 410 | 342 | 328 | 390 | 19.0% |
| Short Term Debt | 0 | 302 | 480 | 477 | 949 | 99.0% |
| Long Term Debt | 0 | 0 | 283 | 419 | 509 | 21.5% |
Cash flow
|
|---|
| Capex | 3 | 282 | 522 | 253 | 571 | 125.3% |
Ratios
|
|---|
| Revenue growth | 737.3% | 58.0% | -21.7% | 4.4% | -33.3% | |
| EBITDA growth | -91.1% | 546.5% | -1.3% | 30.9% | -19.5% | |
| Gross Margin | 5.0% | 6.2% | 8.3% | 8.9% | 14.9% | 6.0% |
| EBITDA Margin | 0.7% | 2.9% | 3.7% | 4.6% | 5.5% | 0.9% |
| Net Income Margin | 52.3% | 7.6% | 15.5% | 10.3% | 21.0% | 10.7% |
| SG&A, % of revenue | 4.4% | 3.4% | 5.9% | 6.7% | 8.3% | 1.6% |
| CAPEX, % of revenue | 0.2% | 13.4% | 31.8% | 14.8% | 49.8% | 35.0% |
| ROIC | 0.5% | 2.7% | 1.8% | 2.0% | 1.3% | -0.7% |
| ROE | 43.6% | 8.0% | 11.9% | 7.6% | 9.8% | 2.2% |
| Net Debt/EBITDA | -62.1x | -1.8x | 7.0x | 7.2x | 16.8x | 9.6x |
Revenue and profitability
SIS International Holdings's Revenue dropped on 33.3% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.95 pp from 4.6% to 5.5% in 2015.
Gross Margin increased on 6.0 pp from 8.9% to 14.9% in 2015. SG&A as a % of Revenue increased slightly on 1.6 pp from 6.7% to 8.3% in 2015.
Net Income marign jumped on 10.7 pp from 10.3% to 21.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 49.8% in 2015. CAPEX/Revenue surged on 36.4 pp from 13.4% in 2012 to 49.8% in 2015. For the last three years the average CAPEX/Revenue was 32.1%.Battling declining revenue SIS International Holdings made large investments to CAPEX (900% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (1.32%) and ROE (9.78%). ROIC decreased slightly on 0.72 pp from 2.0% to 1.3% in 2015. ROE increased on 2.2 pp from 7.6% to 9.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 16.8x and Debt / EBITDA is 23.0x. Net Debt / EBITDA jumped on 9.6x from 7.2x to 16.8x in 2015. Debt surged on 62.7% in 2015 while cash jumped on 19.0% in 2015.
Appendix 1: Peers in Distribution/Wholesale
Below you can find SIS International Holdings benchmarking vs. other companies in Distribution/Wholesale 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 |
|---|
| Forefront Group Ltd ($885) | | | 504.6% | 3,871.0% | |
| China LNG Group Ltd ($931) | -84.5% | 694.8% | 13.6% | 1,341.3% | |
| Sheng Yuan Holdings Ltd ($851) | | -86.1% | 756.9% | 567.2% | -2.1% |
| China Infrastructure Investment Ltd ($600) | 346.9% | 412.1% | -50.9% | 557.9% | |
| China-Hongkong Photo Products Holdings Ltd ($1123) | | 24.9% | 9.0% | 81.2% | 12.2% |
| |
|---|
| Median (37 companies) | 13.8% | 2.6% | 2.1% | 0.8% | 6.1% |
|---|
| SIS International Holdings ($529) | | 58.0% | -21.7% | 4.4% | -33.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | 67.0% | 75.3% | 71.7% | 74.8% | 73.8% |
| Forefront Group Ltd ($885) | | | | 69.8% | |
| YGM Trading Ltd ($375) | 67.1% | 66.5% | 67.4% | 64.0% | 62.5% |
| Goldlion Holdings Ltd ($533) | 57.3% | 56.4% | 54.1% | 55.7% | |
| Sincere Watch Hong Kong Ltd ($444) | 34.2% | 35.6% | 39.7% | 38.8% | 38.3% |
| |
|---|
| Median (33 companies) | 16.4% | 17.5% | 18.2% | 19.3% | 22.8% |
|---|
| SIS International Holdings ($529) | 5.0% | 6.2% | 8.3% | 8.9% | 14.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goldin Financial Holdings Ltd ($530) | -134.6% | 163.7% | 613.4% | 285.7% | 364.1% |
| China LNG Group Ltd ($931) | 195.2% | 95.1% | 76.4% | 97.9% | |
| Forefront Group Ltd ($885) | | -2,113.8% | -803.1% | 57.7% | |
| China Infrastructure Investment Ltd ($600) | -1,171.2% | -274.9% | 120.0% | 52.0% | |
| GA Holdings Ltd ($8126) | -4.5% | 8.0% | 19.7% | 22.9% | |
| |
|---|
| Median (37 companies) | 2.9% | 2.1% | 1.9% | 4.5% | 2.0% |
|---|
| SIS International Holdings ($529) | 0.7% | 2.9% | 3.7% | 4.6% | 5.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| C Y Foundation Group Ltd ($1182) | 9.8% | 2.5% | 5.2% | 82.2% | 9.3% |
| Inspur International Ltd ($596) | 0.9% | 8.4% | 12.2% | 33.6% | |
| HKC International Holdings Ltd ($248) | 0.9% | 5.5% | 0.8% | 11.4% | 0.5% |
| Tan Chong International Ltd ($693) | 7.6% | 6.0% | 7.6% | 7.0% | |
| Victory Group Ltd ($1139) | | 0.7% | 0.1% | 6.1% | |
| |
|---|
| Median (36 companies) | 1.5% | 1.3% | 1.7% | 1.6% | 1.5% |
|---|
| SIS International Holdings ($529) | 0.2% | 13.4% | 31.8% | 14.8% | 49.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China LNG Group Ltd ($931) | 2.2% | 8.4% | 7.4% | 87.0% | |
| Yestar International Holdings Co Ltd ($2393) | 29.4% | 28.8% | 24.1% | 26.2% | 25.4% |
| Powerwell Pacific Holdings Ltd ($8265) | 27.8% | 6.4% | 6.4% | 23.6% | |
| Forefront Group Ltd ($885) | -37.7% | -4.9% | -11.0% | 19.5% | |
| Sincere Watch Hong Kong Ltd ($444) | 46.4% | 51.7% | 27.7% | 14.6% | 5.5% |
| |
|---|
| Median (38 companies) | 2.9% | 2.1% | 0.9% | 3.2% | 2.4% |
|---|
| SIS International Holdings ($529) | 0.5% | 2.7% | 1.8% | 2.0% | 1.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sheng Yuan Holdings Ltd ($851) | | | | 19.3x | 15.4x |
| Takson Holdings Ltd ($918) | | | 11.5x | 11.7x | 15.7x |
| Huiyin Household Appliances Holdings Co Ltd ($1280) | 10.1x | | | 10.9x | |
| Pacific Andes International Holdings Ltd ($1174) | 4.9x | 5.1x | 9.1x | 7.8x | |
| Futong Technology Development Holdings Ltd ($465) | 2.2x | 5.6x | 8.6x | 6.9x | |
| |
|---|
| Median (26 companies) | -0.2x | -0.1x | -0.8x | -0.1x | -0.2x |
|---|
| SIS International Holdings ($529) | -62.1x | -1.8x | 7.0x | 7.2x | 16.8x |
