TCC International Holdings Ltd reports 112% Net Income decline and 15.0 pp EBITDA Margin decline from 29.0% to 14.0%
17/03/2016 • About TCC International Holdings Ltd (
$1136) • By InTwits
TCC International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TCC International Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.5%
- TCC International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.5%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: 534 in 2015, 761 in 2014, 669 in 2013, 1,173 in 2012, 2,430 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.5%
- It operates with high leverage: Net Debt/EBITDA is 3.9x 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.
TCC International Holdings Ltd ($1136) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,266 | 11,304 | 12,971 | 13,753 | 10,911 | -20.7% |
| Gross Profit | 2,889 | 2,105 | 3,564 | 4,233 | 1,675 | -60.4% |
| SG&A | 992 | 1,317 | 1,411 | 1,479 | 1,592 | 7.7% |
| EBITDA | 2,990 | 2,166 | 3,385 | 3,990 | 1,525 | -61.8% |
| Net Income | 1,638 | 610 | 1,675 | 2,051 | -249 | -112.2% |
Balance Sheet
|
|---|
| Cash | 3,632 | 2,895 | 3,067 | 4,789 | 5,713 | 19.3% |
| Short Term Debt | 5,309 | 4,924 | 5,753 | 6,497 | 6,028 | -7.2% |
| Long Term Debt | 7,879 | 9,369 | 7,000 | 6,381 | 5,705 | -10.6% |
Cash flow
|
|---|
| Capex | 2,430 | 1,173 | 669 | 761 | 534 | -29.9% |
Ratios
|
|---|
| Revenue growth | 38.6% | 0.3% | 14.7% | 6.0% | -20.7% | |
| EBITDA growth | 80.6% | -27.6% | 56.3% | 17.9% | -61.8% | |
| Gross Margin | 25.6% | 18.6% | 27.5% | 30.8% | 15.4% | -15.4% |
| EBITDA Margin | 26.5% | 19.2% | 26.1% | 29.0% | 14.0% | -15.0% |
| Net Income Margin | 14.5% | 5.4% | 12.9% | 14.9% | -2.3% | -17.2% |
| SG&A, % of revenue | 8.8% | 11.7% | 10.9% | 10.8% | 14.6% | 3.8% |
| CAPEX, % of revenue | 21.6% | 10.4% | 5.2% | 5.5% | 4.9% | -0.6% |
| ROIC | 8.0% | 3.6% | 7.2% | 8.9% | 0.5% | -8.3% |
| ROE | 12.8% | 3.9% | 10.1% | 11.4% | -1.4% | -12.8% |
| Net Debt/EBITDA | 3.2x | 5.3x | 2.9x | 2.0x | 3.9x | 1.9x |
Revenue and profitability
The company's Revenue dropped on 20.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.1 pp from 11.9% to 21.9% in FY2015.
Gross Margin dropped on 15.4 pp from 30.8% to 15.4% in 2015. SG&A as a % of Revenue increased on 3.8 pp from 10.8% to 14.6% in 2015.
Net Income marign dropped on 17.2 pp from 14.9% to -2.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.9% in 2015. The company showed decline in CAPEX/Revenue of 5.5 pp from 10.4% in 2012 to 4.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 5.2%.
Return on investment
The company operates at low but positive ROIC (0.55%) and negative ROE (-1.43%). ROIC decreased on 8.3 pp from 8.9% to 0.55% in 2015. ROE dropped on 12.8 pp from 11.4% to -1.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.9x and Debt / EBITDA is 7.7x. Net Debt / EBITDA surged on 1.9x from 2.0x to 3.9x in 2015. Debt decreased on 8.9% in 2015 while cash jumped on 19.3% in 2015.
Appendix 1: Peers in Building Materials
Below you can find TCC International Holdings 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% | 9.6% | 5.4% | -9.8% |
|---|
| TCC International Holdings Ltd ($1136) | | 0.3% | 14.7% | 6.0% | -20.7% |
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% | 22.0% | 20.8% | 13.2% |
|---|
| TCC International Holdings Ltd ($1136) | 25.6% | 18.6% | 27.5% | 30.8% | 15.4% |
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% | |
| 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% |
| West China Cement Ltd ($2233) | 36.4% | 30.0% | 28.5% | 25.5% | 23.5% |
| |
|---|
| Median (24 companies) | 18.3% | 15.1% | 16.9% | 17.4% | 2.3% |
|---|
| TCC International Holdings Ltd ($1136) | 26.5% | 19.2% | 26.1% | 29.0% | 14.0% |
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) | 6.3% | 9.7% | 8.9% | 6.3% | 6.4% |
|---|
| TCC International Holdings Ltd ($1136) | 21.6% | 10.4% | 5.2% | 5.5% | 4.9% |
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) | 13.3% | 6.6% | 6.9% | 4.8% | 1.3% |
|---|
| TCC International Holdings Ltd ($1136) | 8.0% | 3.6% | 7.2% | 8.9% | 0.5% |
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 (20 companies) | 0.9x | 2.4x | 1.1x | 1.9x | 4.0x |
|---|
| TCC International Holdings Ltd ($1136) | 3.2x | 5.3x | 2.9x | 2.0x | 3.9x |
