Build King Holdings Ltd reports 65.7% EBITDA growth and almost no change in EBITDA Margin of 2.7%
18/03/2016 • About Build King Holdings Ltd (
$240) • By InTwits
Build King Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Build King Holdings Ltd is a fast growth stock: 2015 revenue growth was 41.2%, 5 year revenue CAGR was 44.6% at 2015 ROIC 18.3%
- EBITDA Margin is quite volatile: 2.7% in 2015, 2.3% in 2014, 1.4% in 2013, 0.1% in 2012, 4.3% in 2011
- Build King Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 50.9%.
- CAPEX is quite volatile: 103 in 2015, 72.8 in 2014, 44.8 in 2013, 23.1 in 2012, 27.0 in 2011
- The company has highly profitable business model: ROIC is at 18.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Build King Holdings Ltd ($240) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,153 | 2,142 | 2,193 | 3,237 | 4,572 | 41.2% |
| Gross Profit | 111 | 112 | 132 | 220 | 276 | 25.7% |
| SG&A | | | | 163 | 181 | 10.6% |
| EBITDA | 50 | 2 | 31 | 75 | 124 | 65.7% |
| Net Income | 26 | 21 | 21 | 55 | 94 | 70.8% |
Balance Sheet
|
|---|
| Cash | 91 | 155 | 299 | 411 | 801 | 94.9% |
| Short Term Debt | 16 | 115 | 94 | 96 | 97 | 0.8% |
| Long Term Debt | 21 | 7 | 6 | 0 | 114 | |
Cash flow
|
|---|
| Capex | 27 | 23 | 45 | 73 | 103 | 40.7% |
Ratios
|
|---|
| Revenue growth | 59.6% | 85.8% | 2.4% | 47.6% | 41.2% | |
| EBITDA growth | -527.9% | -95.4% | 1,259.0% | 141.3% | 65.7% | |
| Gross Margin | 9.6% | 5.2% | 6.0% | 6.8% | 6.0% | -0.7% |
| EBITDA Margin | 4.3% | 0.1% | 1.4% | 2.3% | 2.7% | 0.4% |
| Net Income Margin | 2.2% | 1.0% | 1.0% | 1.7% | 2.1% | 0.4% |
| SG&A, % of revenue | | | | 5.0% | 4.0% | -1.1% |
| CAPEX, % of revenue | 2.3% | 1.1% | 2.0% | 2.2% | 2.2% | -0.0% |
| ROIC | 11.0% | -2.5% | 3.5% | 13.4% | 18.3% | 4.9% |
| ROE | 10.6% | 7.8% | 7.4% | 17.1% | 24.6% | 7.5% |
| Net Debt/EBITDA | -1.1x | -14.8x | -6.4x | -4.2x | -4.8x | -0.6x |
Revenue and profitability
The company's Revenue jumped on 41.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 11.2% to 12.4% in 2015.
Gross Margin decreased slightly on 0.74 pp from 6.8% to 6.0% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 5.0% to 4.0% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.2%. CAPEX/Revenue increased slightly on 1.2 pp from 1.1% in 2012 to 2.2% in 2015. Average CAPEX/Revenue for the last three years was 2.2%.The company invested a big chunk of EBITDA (82.8%) to CAPEX to fuel its growth.
Return on investment
The company operates at high and attractive ROE (24.58%) while ROIC is a bit lower (18.34%). ROIC increased on 4.9 pp from 13.4% to 18.3% in 2015. ROE increased on 7.5 pp from 17.1% to 24.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -4.8x and Debt / EBITDA is 1.7x. Net Debt / EBITDA dropped on 0.6x from -4.2x to -4.8x in 2015. Debt surged on 120% in 2015 while cash jumped on 94.9% in 2015.
Appendix 1: Peers in Investment Companies
Below we provide Build King 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) | -6.3% | -10.9% | 4.8% | 3.4% | 116.8% |
|---|
| Build King Holdings Ltd ($240) | | 85.8% | 2.4% | 47.6% | 41.2% |
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% | 15.8% |
| AVIC Joy Holdings HK Ltd ($260) | 20.4% | 19.5% | 20.9% | 14.0% | |
| |
|---|
| Median (6 companies) | 24.3% | 40.8% | 20.9% | 34.3% | 79.1% |
|---|
| Build King Holdings Ltd ($240) | 9.6% | 5.2% | 6.0% | 6.8% | 6.0% |
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) | 6.2% | 7.9% | -28.8% | 0.2% | 20.3% |
|---|
| Build King Holdings Ltd ($240) | 4.3% | 0.1% | 1.4% | 2.3% | 2.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CK Hutchison Holdings Ltd ($1) | 3.9% | 0.7% | 1.0% | 503.6% | 13.5% |
| 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% |
| |
|---|
| Median (29 companies) | 2.4% | 0.9% | 0.6% | 0.2% | 2.7% |
|---|
| Build King Holdings Ltd ($240) | 2.3% | 1.1% | 2.0% | 2.2% | 2.2% |
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% |
|---|
| Build King Holdings Ltd ($240) | 11.0% | -2.5% | 3.5% | 13.4% | 18.3% |
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 |
| CK Hutchison Holdings Ltd ($1) | 1.8x | 1.9x | 0.6x | 7.2x | 5.5x |
| Lee Hing Development Ltd ($68) | -18.9x | -0.7x | | 2.7x | |
| |
|---|
| Median (14 companies) | -0.6x | -0.9x | 0.6x | -0.6x | -0.5x |
|---|
| Build King Holdings Ltd ($240) | -1.1x | -14.8x | -6.4x | -4.2x | -4.8x |
