Forgame Holdings Ltd EBITDA dropped on 945% in 2015 and EBITDA Margin dropped on 10.0 pp from 0.86% to -9.2%
23/03/2016 • About Forgame Holdings Ltd (
$484) • By InTwits
Forgame Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Forgame Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -6.8%
- EBITDA Margin is declining: -9.2% in 2015 vs. 0.9% in 2014 vs. 12.2% in 2011
- EBITDA Margin is quite volatile: -9.2% in 2015, 0.9% in 2014, 29.3% in 2013, 38.3% in 2012, 12.2% in 2011
- Forgame Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 13.1%.
- CAPEX is quite volatile: 2.0 in 2015, 8.7 in 2014, 34.0 in 2013, 19.7 in 2012, 27.8 in 2011
- The company has unprofitable business model: ROIC is at -6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Forgame Holdings Ltd ($484) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 384 | 777 | 1,183 | 643 | 512 | -20.5% |
| Gross Profit | 315 | 698 | 1,002 | 425 | 171 | -59.7% |
| SG&A | 182 | 214 | 389 | 238 | 125 | -47.7% |
| EBITDA | 47 | 298 | 347 | 6 | -47 | -945.3% |
| Net Income | 18 | 218 | -475 | -39 | -129 | 235.2% |
Balance Sheet
|
|---|
| Cash | 86 | 313 | 947 | 852 | 927 | 8.8% |
| Short Term Debt | 0 | 0 | 15 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 28 | 20 | 34 | 9 | 2 | -77.4% |
Ratios
|
|---|
| Revenue growth | 303.9% | 102.2% | 52.3% | -45.6% | -20.5% | |
| EBITDA growth | -221.6% | 533.6% | 16.5% | -98.4% | -945.3% | |
| Gross Margin | 82.1% | 89.8% | 84.7% | 66.1% | 33.5% | -32.6% |
| EBITDA Margin | 12.2% | 38.3% | 29.3% | 0.9% | -9.2% | -10.0% |
| Net Income Margin | 4.6% | 28.0% | -40.2% | -6.0% | -25.2% | -19.3% |
| SG&A, % of revenue | 47.5% | 27.5% | 32.9% | 37.0% | 24.3% | -12.7% |
| CAPEX, % of revenue | 7.2% | 2.5% | 2.9% | 1.4% | 0.4% | -1.0% |
| ROIC | 108.9% | | 50.1% | -3.1% | -6.8% | -3.7% |
| ROE | | | | -2.8% | -9.1% | -6.3% |
| Net Debt/EBITDA | -1.8x | -1.1x | -2.7x | -153.8x | | 153.8x |
Revenue and profitability
The company's Revenue dropped on 20.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.0 pp from 0.86% to -9.2% in 2015.
Gross Margin dropped on 32.6 pp from 66.1% to 33.5% in 2015. SG&A as a % of Revenue dropped on 12.7 pp from 37.0% to 24.3% in 2015.
Net Income marign dropped on 19.3 pp from -6.0% to -25.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.38% in 2015. The company showed decline in CAPEX/Revenue of 2.1 pp from 2.5% in 2012 to 0.38% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at negative ROIC (-6.80%) and ROE (-9.10%). ROIC decreased on 3.7 pp from -3.1% to -6.8% in 2015. ROE decreased on 6.3 pp from -2.8% to -9.1% in 2015.
Leverage (Debt)
The company has no debt. Cash increased on 8.8% in 2015.
Appendix 1: Peers in Internet
Below you can find Forgame Holdings Ltd benchmarking vs. other companies in Internet 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 |
|---|
| China Public Procurement Ltd ($1094) | -78.5% | 5,077.0% | -67.5% | 1,258.9% | |
| China Digital Culture Group Ltd ($8175) | 320.4% | -47.9% | 180.8% | 168.8% | |
| GET Holdings Ltd ($8380) | -4.3% | 13.8% | 2,126.4% | 154.4% | |
| China Healthcare Holdings Ltd ($673) | | -14.8% | -52.9% | 63.1% | 0.3% |
| ABC Multiactive Ltd ($8131) | | -15.2% | -13.2% | 59.4% | -32.4% |
| |
|---|
| Median (19 companies) | 9.0% | 11.9% | 3.7% | 14.8% | 4.4% |
|---|
| Forgame Holdings Ltd ($484) | | 102.2% | 52.3% | -45.6% | -20.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | 73.0% | 86.7% | 83.5% | 86.2% | 82.1% |
| Sino-I Technology Ltd ($250) | 74.2% | 75.3% | 82.7% | 78.8% | |
| AcrossAsia Ltd ($8061) | 78.7% | 70.9% | 73.0% | 72.5% | |
| Pacific Online Ltd ($543) | 69.1% | 71.0% | 70.5% | 67.3% | |
| China Digital Culture Group Ltd ($8175) | 62.1% | 64.3% | 78.6% | 65.2% | |
| |
|---|
| Median (16 companies) | 62.1% | 61.4% | 57.3% | 55.8% | 50.7% |
|---|
| Forgame Holdings Ltd ($484) | 82.1% | 89.8% | 84.7% | 66.1% | 33.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 61.1% | 64.2% | 71.6% | 71.6% | 72.4% |
| GET Holdings Ltd ($8380) | -182.0% | -237.7% | 56.8% | 66.4% | |
| AcrossAsia Ltd ($8061) | 15.4% | 20.8% | 24.2% | 44.7% | |
| Tencent Holdings Ltd ($700) | 48.2% | 38.4% | 34.7% | 42.5% | 43.5% |
| China Digital Culture Group Ltd ($8175) | -12.1% | -66.7% | 22.5% | 40.8% | |
| |
|---|
| Median (20 companies) | 3.0% | 1.4% | 15.2% | 13.8% | 0.2% |
|---|
| Forgame Holdings Ltd ($484) | 12.2% | 38.3% | 29.3% | 0.9% | -9.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 14.2% | 7.6% | 10.2% | 62.8% | 12.4% |
| AcrossAsia Ltd ($8061) | 61.2% | 56.6% | 65.9% | 36.3% | |
| China E-Learning Group Ltd ($8055) | 1.3% | 0.0% | 2.7% | 15.3% | |
| Asian Capital Resources Holdings Ltd ($8025) | 0.0% | 0.0% | | 12.2% | |
| Capinfo Co Ltd ($1075) | 1.6% | 17.3% | 13.1% | 9.7% | |
| |
|---|
| Median (20 companies) | 13.8% | 4.5% | 2.7% | 3.4% | 0.3% |
|---|
| Forgame Holdings Ltd ($484) | 7.2% | 2.5% | 2.9% | 1.4% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tencent Holdings Ltd ($700) | 33.4% | 29.5% | 26.7% | 29.1% | 24.3% |
| Pacific Online Ltd ($543) | 41.7% | 37.9% | 36.4% | 28.6% | |
| GET Holdings Ltd ($8380) | -6.8% | -6.5% | 10.8% | 19.3% | |
| Tradelink Electronic Commerce Ltd ($536) | 19.5% | 22.4% | 18.2% | 17.4% | |
| SUNeVision Holdings Ltd ($8008) | 9.9% | 10.8% | 13.3% | 14.4% | 15.3% |
| |
|---|
| Median (20 companies) | -2.4% | -4.4% | 3.0% | -2.6% | 0.3% |
|---|
| Forgame Holdings Ltd ($484) | 108.9% | | 50.1% | -3.1% | -6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | | | | 9.5x | |
| AcrossAsia Ltd ($8061) | 1.7x | 2.3x | 2.9x | 1.5x | |
| Tencent Holdings Ltd ($700) | -0.1x | -0.2x | -0.2x | -0.2x | 0.5x |
| China Digital Culture Group Ltd ($8175) | | | -2.2x | -0.4x | |
| GET Holdings Ltd ($8380) | | | -1.1x | -1.0x | |
| |
|---|
| Median (12 companies) | -2.0x | -1.4x | -1.2x | -1.4x | -0.3x |
|---|
| Forgame Holdings Ltd ($484) | -1.8x | -1.1x | -2.7x | -153.8x | |
