Far East Global Group Ltd revenue jumped on 30.5% in 2015 and EBITDA Margin increased on 2.3 pp from -0.039% to 2.3%
17/03/2016 • About Far East Global Group Ltd (
$830) • By InTwits
Far East Global Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Far East Global Group Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -1.7%0
- Far East Global Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: 6.3 in 2015, 11.9 in 2014, 18.7 in 2013, 59.8 in 2012, 58.7 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.2%
- It operates with high leverage: Net Debt/EBITDA is 4.0x 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.
Far East Global Group Ltd ($830) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 848 | 1,296 | 1,419 | 1,682 | 2,195 | 30.5% |
| Gross Profit | 195 | 77 | 8 | 175 | 212 | 20.6% |
| SG&A | | | 21 | 18 | 175 | 894.5% |
| EBITDA | 98 | -144 | -129 | -1 | 50 | -7,636.0% |
| Net Income | 77 | -136 | 50 | 58 | 71 | 23.8% |
Balance Sheet
|
|---|
| Cash | 83 | 340 | 310 | 242 | 200 | -17.2% |
| Short Term Debt | 63 | 25 | 159 | 121 | 181 | 50.4% |
| Long Term Debt | 29 | 32 | 630 | 219 | 215 | -1.7% |
Cash flow
|
|---|
| Capex | 59 | 60 | 19 | 12 | 6 | -47.3% |
Ratios
|
|---|
| Revenue growth | -2.2% | 52.9% | 9.5% | 18.6% | 30.5% | |
| EBITDA growth | -20.8% | -246.8% | -10.5% | -99.5% | -7,636.0% | |
| Gross Margin | 23.0% | 6.0% | 0.6% | 10.4% | 9.6% | -0.8% |
| EBITDA Margin | 11.6% | -11.1% | -9.1% | -0.0% | 2.3% | 2.3% |
| Net Income Margin | 9.0% | -10.5% | 3.6% | 3.4% | 3.3% | -0.2% |
| SG&A, % of revenue | | | 1.5% | 1.0% | 8.0% | 6.9% |
| CAPEX, % of revenue | 6.9% | 4.6% | 1.3% | 0.7% | 0.3% | -0.4% |
| ROIC | 13.3% | -16.4% | -10.2% | -1.5% | 3.2% | 4.7% |
| ROE | 14.1% | -16.3% | 4.5% | 5.0% | 6.1% | 1.1% |
| Net Debt/EBITDA | 0.1x | | | | 4.0x | 4.0x |
Revenue and profitability
The company's Revenue surged on 30.5% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.3 pp from -0.039% to 2.3% in 2015.
Gross Margin decreased slightly on 0.79 pp from 10.4% to 9.6% in 2015. SG&A as a % of Revenue increased on 6.9 pp from 1.0% to 8.0% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Far East Global Group Ltd's CAPEX/Revenue was 0.29% in 2015. Far East Global Group Ltd showed decline in CAPEX/Revenue of 4.3 pp from 4.6% in 2012 to 0.29% in 2015. Average CAPEX/Revenue for the last three years was 0.77%.
Return on investment
The company operates at low ROIC (3.17%) and ROE (6.14%). ROIC increased on 4.7 pp from -1.5% to 3.2% in 2015. ROE increased slightly on 1.1 pp from 5.0% to 6.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.0x and Debt / EBITDA is 8.0x. Net Debt / EBITDA jumped4.0x from to 4.0x in 2015. Debt surged on 16.8% in 2015 while cash dropped on 17.2% in 2015.
Appendix 1: Peers in Building Materials
Below you can find Far East Global Group Ltd benchmarking vs. other companies in Building Materials 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 |
|---|
| Summit Ascent Holdings Ltd ($102) | -18.8% | -86.4% | -19.6% | 177.1% | |
| Pacific Plywood Hldg Ltd ($767) | | -34.9% | -14.5% | 119.5% | |
| Luoyang Glass Co Ltd ($1108) | | -40.3% | -32.3% | 76.2% | 0.7% |
| Prosperity International Holdings HK Ltd ($803) | | -23.9% | -43.3% | 55.2% | -34.4% |
| China Singyes Solar Technologies Holdings Ltd ($750) | 35.0% | 28.7% | 34.0% | 20.7% | |
| |
|---|
| Median (24 companies) | 33.3% | -3.5% | 10.7% | 5.1% | -18.0% |
|---|
| Far East Global Group Ltd ($830) | | 52.9% | 9.5% | 18.6% | 30.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 95.0% | 91.4% | 82.0% | 97.2% | |
| Dongpeng Holdings Co Ltd ($3386) | 28.7% | 35.6% | 37.1% | 38.5% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 37.6% | 37.2% | 36.9% | 37.0% | |
| Anhui Conch Cement Co Ltd ($914) | 39.4% | 27.3% | 32.5% | 33.2% | |
| China Resources Cement Holdings Ltd ($1313) | 31.1% | 24.1% | 28.5% | 31.3% | 24.0% |
| |
|---|
| Median (24 companies) | 26.5% | 21.8% | 22.6% | 21.2% | 15.4% |
|---|
| Far East Global Group Ltd ($830) | 23.0% | 6.0% | 0.6% | 10.4% | 9.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 53.6% | 12.6% | -19.8% | 50.5% | |
| Anhui Conch Cement Co Ltd ($914) | 38.8% | 27.1% | 31.1% | 32.1% | |
| TCC International Holdings Ltd ($1136) | 26.5% | 19.2% | 26.1% | 29.0% | 14.0% |
| Asia Cement China Holdings Corp ($743) | 30.3% | 20.6% | 24.9% | 27.0% | |
| China Tianrui Group Cement Co Ltd ($1252) | 32.4% | 28.5% | 23.7% | 26.7% | 32.8% |
| |
|---|
| Median (24 companies) | 22.0% | 16.3% | 18.2% | 18.6% | 14.0% |
|---|
| Far East Global Group Ltd ($830) | 11.6% | -11.1% | -9.1% | -0.0% | 2.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Singyes Solar Technologies Holdings Ltd ($750) | 40.4% | 11.9% | 32.1% | 23.6% | |
| West China Cement Ltd ($2233) | 54.8% | 17.2% | 13.9% | 15.9% | 10.1% |
| China Glass Holdings Ltd ($3300) | 37.2% | 19.6% | 12.5% | 12.4% | |
| China Shanshui Cement Group Ltd ($691) | 13.5% | 18.9% | 21.1% | 12.1% | |
| China Lesso Group Holdings Ltd ($2128) | 12.0% | 13.6% | 9.1% | 11.8% | |
| |
|---|
| Median (24 companies) | 7.6% | 10.1% | 8.9% | 6.5% | 6.4% |
|---|
| Far East Global Group Ltd ($830) | 6.9% | 4.6% | 1.3% | 0.7% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dongpeng Holdings Co Ltd ($3386) | 49.7% | 37.1% | 35.8% | 27.2% | |
| Anhui Conch Cement Co Ltd ($914) | 27.2% | 12.7% | 17.5% | 18.4% | |
| China Lesso Group Holdings Ltd ($2128) | 26.8% | 20.5% | 19.4% | 18.2% | |
| China Wood Optimization Holding Ltd ($8099) | | 33.5% | 27.3% | 17.7% | 17.7% |
| China Singyes Solar Technologies Holdings Ltd ($750) | 21.1% | 18.6% | 19.9% | 16.0% | |
| |
|---|
| Median (24 companies) | 12.1% | 6.6% | 7.0% | 5.7% | 0.5% |
|---|
| Far East Global Group Ltd ($830) | 13.3% | -16.4% | -10.2% | -1.5% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sustainable Forest Holdings Ltd ($723) | 0.9x | | | 9.6x | |
| China National Building Material Co Ltd ($3323) | 3.9x | 6.7x | 6.8x | 6.3x | |
| BBMG Corp ($2009) | 4.4x | 4.6x | 5.0x | 6.1x | |
| China Tianrui Group Cement Co Ltd ($1252) | 3.0x | 4.2x | 5.1x | 5.2x | 7.9x |
| China Shanshui Cement Group Ltd ($691) | 1.8x | 3.0x | 4.1x | 4.8x | |
| |
|---|
| Median (21 companies) | 1.4x | 2.7x | 1.9x | 2.0x | 3.9x |
|---|
