CK Hutchison Holdings Ltd revenue surged on 10,576% in 2015 while EBITDA Margin dropped on 54.8 pp from 75.1% to 20.3%
17/03/2016 • About CK Hutchison Holdings Ltd (
$1) • By InTwits
CK Hutchison Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 20.3% in 2015, 75.1% in 2014, 89.0% in 2013, 74.5% in 2012, 43.3% in 2011
- CK Hutchison Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 104.5%. At the same time it's a lot of higher than industry average of 10.3%.
- CAPEX is quite volatile: 22,494 in 2015, 7,867 in 2014, 168 in 2013, 126 in 2012, 1,273 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.7%
- It operates with high leverage: Net Debt/EBITDA is 5.5x 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.
CK Hutchison Holdings Ltd ($1) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 32,971 | 19,199 | 17,013 | 1,562 | 166,760 | 10,576.1% |
| EBITDA | 14,282 | 14,303 | 15,147 | 1,173 | 33,864 | 2,787.0% |
| Net Income | 46,055 | 32,036 | 35,260 | 53,869 | 118,570 | 120.1% |
Balance Sheet
|
|---|
| Cash | 19,894 | 21,167 | 33,197 | 29,437 | 121,171 | 311.6% |
| Short Term Debt | 22,897 | 5,098 | 2,438 | 18,352 | 33,016 | 79.9% |
| Long Term Debt | 23,020 | 43,001 | 39,452 | 19,522 | 275,363 | 1,310.5% |
Cash flow
|
|---|
| Capex | 1,273 | 126 | 168 | 7,867 | 22,494 | 185.9% |
Ratios
|
|---|
| Revenue growth | 37.5% | -41.8% | -11.4% | -90.8% | 10,576.1% | |
| EBITDA growth | 47.2% | 0.1% | 5.9% | -92.3% | 2,787.0% | |
| EBITDA Margin | 43.3% | 74.5% | 89.0% | 75.1% | 20.3% | -54.8% |
| Net Income Margin | 139.7% | 166.9% | 207.3% | 3,448.7% | 71.1% | -3,377.6% |
| CAPEX, % of revenue | 3.9% | 0.7% | 1.0% | 503.6% | 13.5% | -490.2% |
| ROIC | 4.1% | 3.7% | 3.7% | 0.2% | 3.7% | 3.5% |
| ROE | 16.0% | 10.0% | 10.2% | 14.3% | 30.1% | 15.8% |
| Net Debt/EBITDA | 1.8x | 1.9x | 0.6x | 7.2x | 5.5x | -1.7x |
Revenue and profitability
CK Hutchison Holdings Ltd's Revenue surged on 10,576% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 54.8 pp from 75.1% to 20.3% in 2015.
Net Income marign dropped on 3,378 pp from 3,449% to 71.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 CK Hutchison Holdings Ltd had CAPEX/Revenue of 13.5%. The company showed fast CAPEX/Revenue growth of 12.8 pp from 0.66% in 2012 to 13.5% in 2015. Average CAPEX/Revenue for the last three years was 173%.The company invested a big chunk of EBITDA (66.4%) to CAPEX to fuel its growth.
Return on investment
The company operates at good ROE (30.11%) while ROIC is low (3.67%). ROIC increased on 3.5 pp from 0.18% to 3.7% in 2015. ROE surged on 15.8 pp from 14.3% to 30.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.5x and Debt / EBITDA is 9.1x. Net Debt / EBITDA dropped on 1.7x from 7.2x to 5.5x in 2015. Debt jumped on 714% in 2015 while cash surged on 312% in 2015.
Appendix 1: Peers in Investment Companies
Below we provide CK Hutchison Holdings Ltd benchmarking against other companies in Investment Companies 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 |
|---|
| DT Capital Ltd ($356) | | | -49.8% | 1,065.5% | |
| Capital VC Ltd ($2324) | | | | 489.2% | 861.9% |
| Oriental Explorer Holdings Ltd ($430) | | | -62.7% | 414.5% | |
| China Merchants China Direct Investments Ltd ($133) | | | 59.1% | 255.9% | |
| Eternity Investment Ltd ($764) | 1.2% | -14.8% | -61.8% | 243.8% | |
| |
|---|
| Median (24 companies) | -3.5% | 14.9% | 4.8% | 17.5% | 47.0% |
|---|
| CK Hutchison Holdings Ltd ($1) | | -41.8% | -11.4% | -90.8% | 10,576.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Eternity Investment Ltd ($764) | 100.0% | | | 86.6% | |
| City e-Solutions Ltd ($557) | 69.0% | 81.1% | 81.5% | 81.6% | 79.1% |
| China Properties Investment Holdings Ltd ($736) | 10.6% | 47.5% | 40.8% | 46.2% | 87.2% |
| Infinity Financial Group Holdings Ltd ($1152) | 24.3% | 19.0% | 17.5% | 22.4% | |
| AVIC Joy Holdings HK Ltd ($260) | 20.4% | 19.5% | 20.9% | 14.0% | |
| |
|---|
| Median (7 companies) | 22.4% | 30.2% | 19.2% | 22.4% | 83.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Capital VC Ltd ($2324) | -2,944.6% | | 36.7% | 93.1% | 99.3% |
| Unity Investments Holdings Ltd ($913) | | | 89.0% | 90.8% | |
| Oriental Explorer Holdings Ltd ($430) | | 93.6% | 100.5% | 90.4% | |
| China Merchants China Direct Investments Ltd ($133) | | 68.6% | 82.2% | 89.3% | |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 39.4% | | 101.3% | 85.9% | 85.8% |
| |
|---|
| Median (27 companies) | 4.6% | 5.9% | -28.8% | 0.2% | 26.4% |
|---|
| CK Hutchison Holdings Ltd ($1) | 43.3% | 74.5% | 89.0% | 75.1% | 20.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Opes Asia Development Ltd ($810) | | | 11.3% | 76.1% | |
| Cosmopolitan International Holdings Ltd ($120) | 0.0% | 0.4% | 1.8% | 55.2% | |
| Great China Properties Holdings Ltd ($21) | 1.7% | 6.8% | 0.9% | 30.9% | |
| China Properties Investment Holdings Ltd ($736) | 215.9% | 55.3% | 3.0% | 20.8% | 58.1% |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 2.2% | | 13.7% | 17.1% | 39.8% |
| |
|---|
| Median (29 companies) | 2.3% | 1.1% | 0.6% | 0.2% | 0.2% |
|---|
| CK Hutchison Holdings Ltd ($1) | 3.9% | 0.7% | 1.0% | 503.6% | 13.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Unity Investments Holdings Ltd ($913) | -69.6% | -36.2% | 26.4% | 47.4% | |
| China Merchants China Direct Investments Ltd ($133) | -3.2% | 4.8% | 8.8% | 28.6% | |
| Capital VC Ltd ($2324) | -5.0% | | | 21.8% | 100.7% |
| Shanghai International Shanghai Growth Investment Ltd ($770) | 9.7% | -15.9% | -51.2% | 18.4% | -37.7% |
| Oriental Explorer Holdings Ltd ($430) | -8.5% | 9.3% | 3.2% | 14.4% | |
| |
|---|
| Median (37 companies) | -5.0% | -3.1% | -2.4% | -5.3% | -0.4% |
|---|
| CK Hutchison Holdings Ltd ($1) | 4.1% | 3.7% | 3.7% | 0.2% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Harmonic Strait Financial Holdings Ltd ($33) | 1.8x | -1.2x | | 162.5x | |
| AVIC Joy Holdings HK Ltd ($260) | -0.5x | 0.2x | 15.0x | 19.6x | |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 9.3x | | 12.5x | 9.5x | 11.2x |
| Lee Hing Development Ltd ($68) | -18.9x | -0.7x | | 2.7x | |
| Unity Investments Holdings Ltd ($913) | | | 0.0x | -0.0x | |
| |
|---|
| Median (14 companies) | -0.6x | -1.2x | 0.0x | -1.0x | -0.8x |
|---|
| CK Hutchison Holdings Ltd ($1) | 1.8x | 1.9x | 0.6x | 7.2x | 5.5x |
