Sun Hung Kai & Co Ltd Net Income surged on 193% in 2015 while EBITDA Margin dropped on 22.4 pp from 50.9% to 28.5%
17/03/2016 • About Sun Hung Kai & Co Ltd (
$86) • By InTwits
Sun Hung Kai & Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun Hung Kai & Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 6.2%.
- CAPEX is quite volatile: 79.3 in 2015, 242 in 2014, 98.3 in 2013, 66.1 in 2012, 67.1 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.4%
- It operates with high leverage: Net Debt/EBITDA is 0.5x while industry average is -1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Hung Kai & Co Ltd ($86) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,639 | 4,074 | 4,673 | 4,357 | 5,245 | 20.4% |
| EBITDA | 2,001 | 1,989 | 2,199 | 2,219 | 1,497 | -32.5% |
| Net Income | 1,032 | 1,036 | 1,052 | 1,328 | 3,897 | 193.3% |
Balance Sheet
|
|---|
| Cash | 1,795 | 4,568 | 2,983 | 4,051 | 5,648 | 39.4% |
| Short Term Debt | 1,646 | 3,167 | 2,802 | 3,905 | 2,089 | -46.5% |
| Long Term Debt | 3,759 | 4,369 | 5,781 | 3,196 | 4,304 | 34.7% |
Cash flow
|
|---|
| Capex | 67 | 66 | 98 | 242 | 79 | -67.2% |
Ratios
|
|---|
| Revenue growth | 12.2% | 12.0% | 14.7% | -6.8% | 20.4% | |
| EBITDA growth | 6.5% | -0.6% | 10.5% | 0.9% | -32.5% | |
| EBITDA Margin | 55.0% | 48.8% | 47.1% | 50.9% | 28.5% | -22.4% |
| Net Income Margin | 28.4% | 25.4% | 22.5% | 30.5% | 74.3% | 43.8% |
| CAPEX, % of revenue | 1.8% | 1.6% | 2.1% | 5.5% | 1.5% | -4.0% |
| ROIC | 8.3% | 7.7% | 6.8% | 6.4% | 3.4% | -3.0% |
| ROE | 8.8% | 8.3% | 8.0% | 9.4% | 23.7% | 14.3% |
| Net Debt/EBITDA | 1.8x | 1.5x | 2.5x | 1.4x | 0.5x | -0.9x |
Revenue and profitability
Sun Hung Kai & Co Ltd's Revenue jumped on 20.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.7 pp from 40.1% to 32.4% in 2015.
Net Income marign surged on 43.8 pp from 30.5% to 74.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.5%. Sun Hung Kai & Co Ltd's CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 3.1%.
Return on investment
The company operates at good ROE (23.66%) while ROIC is low (3.43%). ROIC decreased on 3.0 pp from 6.4% to 3.4% in 2015. ROE surged on 14.3 pp from 9.4% to 23.7% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is 4.3x. Net Debt / EBITDA dropped on 0.9x from 1.4x to 0.5x in 2015. Debt decreased on 10.0% in 2015 while cash surged on 39.4% in 2015.
Appendix 1: Peers in Diversified Finan Serv
Below we provide Sun Hung Kai & Co Ltd benchmarking against other companies in Diversified Finan Serv 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 |
|---|
| China New Energy Power Group Ltd ($1041) | | 100.0% | 0.0% | 64,246.0% | |
| ReOrient Group Ltd ($376) | | 112.8% | 75.1% | 1,106.9% | -90.8% |
| Global Strategic Group Ltd ($8007) | | -3.9% | 2.1% | 806.3% | 681.2% |
| AID Partners Capital Holdings Ltd ($8088) | -38.7% | 0.9% | -79.5% | 655.2% | |
| Willie International Holdings Ltd ($273) | | | | 543.9% | |
| |
|---|
| Median (62 companies) | 3.8% | 0.9% | 12.9% | 26.5% | 24.9% |
|---|
| Sun Hung Kai & Co Ltd ($86) | | 12.0% | 14.7% | -6.8% | 20.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Roma Group Ltd ($8072) | | | | 99.4% | 98.7% |
| Freeman Financial Corp Ltd ($279) | 97.1% | 52.3% | 99.3% | 98.5% | |
| Chinese Strategic Holdings Ltd ($8089) | 97.9% | 99.1% | 97.9% | 97.0% | 96.6% |
| First China Financial Network Holdings Ltd ($8123) | 98.6% | 93.4% | | 94.5% | 97.4% |
| Allied Group Ltd ($373) | 94.5% | 95.1% | 94.4% | 93.6% | |
| |
|---|
| Median (13 companies) | 80.8% | 64.2% | 75.1% | 88.2% | 91.7% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Styland Holdings Ltd ($211) | 68.6% | 198.6% | 91.5% | 161.0% | 17.9% |
| Roma Group Ltd ($8072) | 81.4% | 18.1% | 36.8% | 143.0% | 44.7% |
| First China Financial Network Holdings Ltd ($8123) | -231.6% | -329.2% | -211.2% | 124.3% | -25.5% |
| Willie International Holdings Ltd ($273) | | | 75.3% | 95.2% | |
| Get Nice Holdings Ltd ($64) | 28.4% | 2.6% | 153.4% | 92.7% | 83.9% |
| |
|---|
| Median (63 companies) | 29.5% | 14.0% | 35.5% | 43.6% | 26.2% |
|---|
| Sun Hung Kai & Co Ltd ($86) | 55.0% | 48.8% | 47.1% | 50.9% | 28.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gemini Investments Holdings Ltd ($174) | 14.9% | 479.1% | 37.3% | 216.0% | 10.0% |
| China Assurance Finance Group Ltd ($8090) | | 94.7% | 68.9% | 53.3% | |
| Chinese Strategic Holdings Ltd ($8089) | 93.2% | 376.0% | 5.7% | 32.6% | 5.8% |
| AID Partners Capital Holdings Ltd ($8088) | 196.3% | 4.1% | 2.9% | 28.4% | |
| Asian Capital Holdings Ltd ($8295) | 2.3% | 0.1% | 0.2% | 15.6% | |
| |
|---|
| Median (63 companies) | 2.3% | 1.9% | 1.7% | 1.1% | 1.6% |
|---|
| Sun Hung Kai & Co Ltd ($86) | 1.8% | 1.6% | 2.1% | 5.5% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ReOrient Group Ltd ($376) | -24.9% | -45.6% | -53.5% | 128.6% | -2.8% |
| Roma Group Ltd ($8072) | | 19.6% | 43.7% | 107.8% | 13.3% |
| Convoy Financial Holdings Ltd ($1019) | 31.1% | 3.4% | 39.3% | 47.3% | |
| Willie International Holdings Ltd ($273) | -28.1% | -9.5% | 4.7% | 30.9% | |
| Value Partners Group Ltd ($806) | 8.7% | 16.8% | 16.5% | 26.8% | 9.6% |
| |
|---|
| Median (65 companies) | 4.6% | 3.4% | 4.0% | 4.7% | 2.2% |
|---|
| Sun Hung Kai & Co Ltd ($86) | 8.3% | 7.7% | 6.8% | 6.4% | 3.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cash Financial Services Group Ltd ($510) | -1.1x | 7.8x | | 67.5x | -4.3x |
| Far East Horizon Ltd ($3360) | 17.8x | 16.9x | 21.7x | 20.0x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 7.3x | 2.1x | 10.3x | 9.3x | 39.3x |
| China Cinda Asset Management Co Ltd ($1359) | 2.1x | 5.0x | 7.7x | 8.4x | |
| Aeon Credit Service Asia Co Ltd ($900) | 6.3x | 5.2x | 6.0x | 6.9x | 5.5x |
| |
|---|
| Median (45 companies) | -1.1x | -1.3x | -0.0x | -0.1x | -1.5x |
|---|
| Sun Hung Kai & Co Ltd ($86) | 1.8x | 1.5x | 2.5x | 1.4x | 0.5x |
