AKM Industrial Co Ltd EBITDA dropped on 42.1% in 2015 while Revenue increased slightly on 1.4%
22/03/2016 • About AKM Industrial Co Ltd (
$1639) • By InTwits
AKM Industrial Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AKM Industrial Co Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.5%
- AKM Industrial Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.6%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 113 in 2015, 156 in 2014, 111 in 2013, 30.1 in 2012, 30.3 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.5%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AKM Industrial Co Ltd ($1639) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 412.5 | 600.7 | 641.2 | 622.1 | 630.6 | 1.4% |
| Gross Profit | 55.7 | 93.2 | 88.4 | 106.6 | 79.2 | -25.7% |
| SG&A | | 39.9 | 37.2 | 48.4 | 41.6 | -14.1% |
| EBITDA | 38.4 | 70.5 | 70.4 | 73.1 | 42.3 | -42.1% |
| Net Income | 4.6 | 32.4 | 30.3 | 29.6 | 0.2 | -99.4% |
Balance Sheet
|
|---|
| Cash | 13.9 | 47.8 | 42.2 | 48.1 | 32.9 | -31.8% |
| Short Term Debt | 118.8 | 72.9 | 111.5 | 81.2 | 119.4 | 47.1% |
| Long Term Debt | 8.3 | 45.8 | 53.6 | 10.5 | 6.9 | -34.5% |
Cash flow
|
|---|
| Capex | 30.3 | 30.1 | 111.5 | 156.5 | 113.2 | -27.6% |
Ratios
|
|---|
| Revenue growth | 32.4% | 45.6% | 6.7% | -3.0% | 1.4% | |
| EBITDA growth | 36.2% | 83.7% | -0.1% | 3.8% | -42.1% | |
| Gross Margin | 13.5% | 15.5% | 13.8% | 17.1% | 12.6% | -4.6% |
| EBITDA Margin | 9.3% | 11.7% | 11.0% | 11.8% | 6.7% | -5.0% |
| Net Income Margin | 1.1% | 5.4% | 4.7% | 4.8% | 0.0% | -4.7% |
| SG&A, % of revenue | | 6.6% | 5.8% | 7.8% | 6.6% | -1.2% |
| CAPEX, % of revenue | 7.4% | 5.0% | 17.4% | 25.2% | 18.0% | -7.2% |
| ROIC | 4.9% | 12.3% | 9.4% | 6.5% | 0.5% | -6.0% |
| ROE | 2.3% | 14.5% | 11.6% | 7.4% | 0.0% | -7.4% |
| Net Debt/EBITDA | 3.0x | 1.0x | 1.7x | 0.6x | 2.2x | 1.6x |
Revenue and profitability
The company's Revenue increased slightly on 1.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 34.6 pp from -47.9% to -13.3% in 2015.
Gross Margin decreased on 4.6 pp from 17.1% to 12.6% in 2015. SG&A as a % of Revenue decreased slightly on 1.2 pp from 7.8% to 6.6% in 2015.
Net Income marign decreased on 4.7 pp from 4.8% to 0.029% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 18.0%. The company showed fast CAPEX/Revenue growth of 13.0 pp from 5.0% in 2012 to 18.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 20.2%.The company maintained rich investment policy and has spent a lot to CAPEX (268% of EBITDA).
Return on investment
The company operates at low ROIC (0.45%) and ROE (0.04%). ROIC decreased on 6.0 pp from 6.5% to 0.45% in 2015. ROE decreased on 7.4 pp from 7.4% to 0.037% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 3.0x. Net Debt / EBITDA jumped on 1.6x from 0.6x to 2.2x in 2015. Debt jumped on 37.8% in 2015 while cash dropped on 31.8% in 2015.
Appendix 1: Peers in Electronics
Below we provide AKM Industrial Co Ltd benchmarking against other companies in Electronics 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 Netcom Technology Holdings Ltd ($8071) | -22.0% | 11.6% | -23.0% | 104.1% | |
| Technovator International Ltd ($1206) | 31.6% | 27.4% | 34.1% | 35.9% | |
| Tongda Group Holdings Ltd ($698) | | 8.3% | 6.4% | 32.1% | 26.8% |
| Advanced Card Systems Holdings Ltd ($8210) | | 36.9% | 20.8% | 26.7% | -4.8% |
| Alltronics Holdings Ltd ($833) | 33.9% | -1.6% | -1.6% | 23.4% | |
| |
|---|
| Median (49 companies) | 7.0% | -1.6% | 3.1% | 6.2% | -3.9% |
|---|
| AKM Industrial Co Ltd ($1639) | | 45.6% | 6.7% | -3.0% | 1.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | 49.6% |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | |
| TeleEye Holdings Ltd ($8051) | 51.6% | 44.0% | 42.1% | 38.5% | 37.0% |
| Wasion Group Holdings Ltd ($3393) | 30.3% | 32.8% | 35.1% | 34.2% | 30.2% |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | 34.6% |
| |
|---|
| Median (47 companies) | 13.6% | 13.6% | 13.7% | 13.8% | 17.0% |
|---|
| AKM Industrial Co Ltd ($1639) | 13.5% | 15.5% | 13.8% | 17.1% | 12.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | |
| Nanjing Sample Technology Co Ltd ($1708) | 31.5% | 26.8% | 21.1% | 22.3% | |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | 19.3% |
| Technovator International Ltd ($1206) | 19.2% | 19.0% | 19.0% | 20.8% | |
| Trigiant Group Ltd ($1300) | 17.0% | 17.6% | 18.2% | 18.5% | 16.2% |
| |
|---|
| Median (49 companies) | 8.8% | 5.7% | 4.4% | 4.0% | 8.1% |
|---|
| AKM Industrial Co Ltd ($1639) | 9.3% | 11.7% | 11.0% | 11.8% | 6.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | 25.8% |
| Tech Pro Technology Development Ltd ($3823) | 32.8% | 7.6% | 13.1% | 15.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 3.7% | 23.9% | 15.5% | 12.0% | |
| Tongda Group Holdings Ltd ($698) | 5.7% | 7.8% | 4.9% | 11.4% | 16.2% |
| |
|---|
| Median (49 companies) | 3.2% | 3.7% | 2.9% | 3.3% | 3.5% |
|---|
| AKM Industrial Co Ltd ($1639) | 7.4% | 5.0% | 17.4% | 25.2% | 18.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | |
| Cowell e Holdings Inc ($1415) | | 12.5% | 27.1% | 24.4% | 25.8% |
| Advanced Card Systems Holdings Ltd ($8210) | 15.5% | 26.7% | 24.7% | 20.2% | 9.7% |
| Alltronics Holdings Ltd ($833) | 19.3% | 13.1% | 15.2% | 19.8% | |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | 16.3% |
| |
|---|
| Median (49 companies) | 5.9% | 4.1% | 3.5% | 2.9% | 3.7% |
|---|
| AKM Industrial Co Ltd ($1639) | 4.9% | 12.3% | 9.4% | 6.5% | 0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
| Sino-Tech International Holdings Ltd ($724) | | | 15.7x | 24.7x | |
| Eyang Holdings Group Co Ltd ($117) | 4.2x | 3.3x | 3.7x | 17.9x | |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.8x | 2.2x | 2.6x | 5.7x | 5.4x |
| |
|---|
| Median (35 companies) | 0.7x | 1.1x | 1.1x | 1.2x | 0.2x |
|---|
| AKM Industrial Co Ltd ($1639) | 3.0x | 1.0x | 1.7x | 0.6x | 2.2x |
