Kingdom Holding Co Ltd reports 42.3% CAPEX decline while 12.2% Revenue growth
18/03/2016 • About Kingdom Holding Co Ltd (
$528) • By InTwits
Kingdom Holding Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kingdom Holding Co Ltd is a growth stock: 2015 revenue growth was 12.2%, 5 year revenue CAGR was 10.3% at 2015 ROIC 12.7%
- EBITDA Margin is declining: 23.0% in 2015 vs. 24.8% in 2014 vs. 29.3% in 2011
- Kingdom Holding Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.0%. At the same time it's in pair with industry average of 14.1%.
- CAPEX is quite volatile: 57.6 in 2015, 99.7 in 2014, 143 in 2013, 60.7 in 2012, 44.3 in 2011
- The company has highly profitable business model: ROIC is at 12.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kingdom Holding Co Ltd ($528) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 711 | 719 | 762 | 914 | 1,025 | 12.2% |
| Gross Profit | 228 | 209 | 207 | 245 | 264 | 7.8% |
| SG&A | 69 | 74 | 74 | 86 | 94 | 9.6% |
| EBITDA | 208 | 189 | 193 | 227 | 236 | 3.9% |
| Net Income | 103 | 94 | 100 | 110 | 120 | 9.0% |
Balance Sheet
|
|---|
| Cash | 164 | 164 | 202 | 217 | 237 | 9.2% |
| Short Term Debt | 164 | 216 | 189 | 231 | 368 | 59.4% |
| Long Term Debt | 0 | 0 | 50 | 50 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 44 | 61 | 143 | 100 | 58 | -42.3% |
Ratios
|
|---|
| Revenue growth | 13.1% | 1.1% | 6.0% | 20.0% | 12.2% | |
| EBITDA growth | 48.3% | -9.1% | 1.9% | 17.7% | 3.9% | |
| Gross Margin | 32.1% | 29.1% | 27.2% | 26.8% | 25.8% | -1.0% |
| EBITDA Margin | 29.3% | 26.3% | 25.3% | 24.8% | 23.0% | -1.8% |
| Net Income Margin | 14.5% | 13.1% | 13.2% | 12.1% | 11.7% | -0.3% |
| SG&A, % of revenue | 9.8% | 10.3% | 9.7% | 9.4% | 9.2% | -0.2% |
| CAPEX, % of revenue | 6.2% | 8.4% | 18.8% | 10.9% | 5.6% | -5.3% |
| ROIC | 16.3% | 13.8% | 12.7% | 13.8% | 12.7% | -1.1% |
| ROE | 14.3% | 11.9% | 11.7% | 11.9% | 12.0% | 0.1% |
| Net Debt/EBITDA | 0.0x | 0.3x | 0.2x | 0.3x | 0.6x | 0.3x |
Revenue and profitability
Kingdom Holding Co Ltd's Revenue surged on 12.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 70.7 pp from 143% to 214% in 2015.
Gross Margin decreased slightly on 1.0 pp from 26.8% to 25.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.6% in 2015. CAPEX/Revenue decreased on 2.8 pp from 8.4% in 2012 to 5.6% in 2015. For the last three years the average CAPEX/Revenue was 11.8%.
Return on investment
The company operates at good ROIC (12.74%) and ROE (12.00%). ROIC decreased slightly on 1.1 pp from 13.8% to 12.7% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 1.6x. Net Debt / EBITDA surged on 0.3x from 0.3x to 0.6x in 2015. Debt jumped on 31.0% in 2015 while cash increased on 9.2% in 2015.
Appendix 1: Peers in Textiles
Below you can find Kingdom Holding Co Ltd benchmarking vs. other companies in Textiles 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 |
|---|
| Victory City International Holdings Ltd ($539) | | -5.2% | 6.5% | 31.5% | -4.4% |
| Guangdong Tannery Ltd ($1058) | 12.7% | 6.1% | -4.5% | 29.0% | |
| Pacific Textiles Holdings Ltd ($1382) | | -10.6% | 3.6% | 11.6% | -7.0% |
| Kam Hing International Holdings Ltd ($2307) | 24.4% | 0.9% | -4.3% | 1.6% | |
| TAI Ping Carpet International Ltd ($146) | | 20.2% | -4.6% | -0.3% | -8.1% |
| |
|---|
| Median (19 companies) | 18.9% | -5.2% | -4.3% | -11.5% | -5.4% |
|---|
| Kingdom Holding Co Ltd ($528) | | 1.1% | 6.0% | 20.0% | 12.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TAI Ping Carpet International Ltd ($146) | 40.4% | 41.0% | 45.4% | 46.7% | 46.6% |
| Ping Shan Tea Group Ltd ($364) | 15.3% | 11.2% | 20.8% | 42.9% | |
| Texwinca Holdings Ltd ($321) | 33.7% | 29.6% | 30.9% | 33.3% | 34.1% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 30.3% | 31.1% | 32.5% | 32.5% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 5.6% | 4.9% | 7.3% | 24.9% | |
| |
|---|
| Median (19 companies) | 15.3% | 16.3% | 12.6% | 13.6% | 18.2% |
|---|
| Kingdom Holding Co Ltd ($528) | 32.1% | 29.1% | 27.2% | 26.8% | 25.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ping Shan Tea Group Ltd ($364) | 14.9% | 11.2% | | 39.3% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 26.2% | 28.1% | 28.7% | 30.2% | |
| Weiqiao Textile Co ($2698) | 10.2% | 17.5% | 20.2% | 21.4% | 30.8% |
| Pacific Textiles Holdings Ltd ($1382) | 19.5% | 19.1% | 19.0% | 19.5% | 18.4% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 3.2% | 2.5% | 5.1% | 17.5% | |
| |
|---|
| Median (19 companies) | 13.3% | 9.4% | 8.8% | 11.7% | 10.1% |
|---|
| Kingdom Holding Co Ltd ($528) | 29.3% | 26.3% | 25.3% | 24.8% | 23.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hua Lien International Holding Co Ltd ($969) | 0.0% | 19.7% | 40.5% | 79.6% | |
| Ping Shan Tea Group Ltd ($364) | 18.1% | 32.0% | | 14.0% | |
| Victory City International Holdings Ltd ($539) | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% |
| Silverman Holdings Ltd ($1616) | 8.7% | 6.5% | 18.0% | 8.4% | |
| China Weaving Materials Holdings Ltd ($3778) | 2.4% | 13.4% | 11.3% | 7.7% | |
| |
|---|
| Median (19 companies) | 2.6% | 2.6% | 1.8% | 3.9% | 4.9% |
|---|
| Kingdom Holding Co Ltd ($528) | 6.2% | 8.4% | 18.8% | 10.9% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Textiles Holdings Ltd ($1382) | 28.8% | 23.7% | 26.4% | 31.6% | 25.9% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 24.2% | 22.3% | 20.1% | 17.6% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 7.9% | 6.2% | 13.2% | 15.4% | |
| TAI Ping Carpet International Ltd ($146) | | | 2.6% | 5.7% | 5.5% |
| Texwinca Holdings Ltd ($321) | 15.5% | 8.3% | 5.3% | 5.5% | 8.1% |
| |
|---|
| Median (19 companies) | 7.3% | 5.0% | 3.8% | 3.5% | 5.3% |
|---|
| Kingdom Holding Co Ltd ($528) | 16.3% | 13.8% | 12.7% | 13.8% | 12.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangdong Tannery Ltd ($1058) | 8.9x | 6.5x | 5.8x | 11.6x | |
| Sijia Group Co ($1863) | -0.1x | 1.6x | 5.3x | 6.4x | |
| China Weaving Materials Holdings Ltd ($3778) | 1.3x | 3.6x | 3.0x | 5.3x | |
| Co-Prosperity Holdings Ltd ($707) | 8.3x | 34.8x | | 4.5x | |
| Victory City International Holdings Ltd ($539) | 1.8x | 1.5x | 2.0x | 3.2x | 2.5x |
| |
|---|
| Median (17 companies) | 1.3x | 1.5x | 2.0x | 1.0x | 0.1x |
|---|
| Kingdom Holding Co Ltd ($528) | 0.0x | 0.3x | 0.2x | 0.3x | 0.6x |
