Founder Holdings Ltd reports 94.5% EBITDA growth and 2.8 pp EBITDA Margin growth from 2.4% to 5.2%
23/03/2016 • About Founder Holdings Ltd (
$418) • By InTwits
Founder Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Founder Holdings Ltd is a company in decline: 2015 revenue growth was -10.8%, 5 years revenue CAGR was -15.5%
- EBITDA Margin is quite volatile: 5.2% in 2015, 2.4% in 2014, 6.5% in 2013, 2.3% in 2012, 3.4% in 2011
- Founder Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 2.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Founder Holdings Ltd ($418) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,647 | 2,131 | 1,291 | 1,080 | 964 | -10.8% |
| Gross Profit | 349 | 423 | 367 | 363 | 398 | 9.5% |
| SG&A | | 330 | 303 | 314 | 330 | 5.1% |
| EBITDA | 56 | 50 | 85 | 26 | 50 | 94.5% |
| Net Income | 50 | 45 | 86 | 6 | 7 | 15.7% |
Balance Sheet
|
|---|
| Cash | 264 | 430 | 561 | 525 | 591 | 12.6% |
| Short Term Debt | 76 | 230 | 231 | 194 | 160 | -17.5% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 9 | 14 | 8 | 6 | 4 | -43.9% |
Ratios
|
|---|
| Revenue growth | -26.5% | 29.4% | -39.4% | -16.4% | -10.8% | |
| EBITDA growth | -10.3% | -11.9% | 69.9% | -69.3% | 94.5% | |
| Gross Margin | 21.2% | 19.8% | 28.4% | 33.7% | 41.3% | 7.6% |
| EBITDA Margin | 3.4% | 2.3% | 6.5% | 2.4% | 5.2% | 2.8% |
| Net Income Margin | 3.0% | 2.1% | 6.7% | 0.6% | 0.8% | 0.2% |
| SG&A, % of revenue | | 15.5% | 23.5% | 29.1% | 34.3% | 5.2% |
| CAPEX, % of revenue | 0.5% | 0.6% | 0.6% | 0.6% | 0.4% | -0.2% |
| ROIC | 6.3% | 4.2% | 6.0% | 0.5% | 2.1% | 1.7% |
| ROE | 8.0% | 6.2% | 10.0% | 0.7% | 0.8% | 0.1% |
| Net Debt/EBITDA | -3.3x | -4.0x | -3.9x | -12.7x | -8.5x | 4.2x |
Revenue and profitability
The company's Revenue dropped on 10.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.8 pp from 2.4% to 5.2% in 2015.
Gross Margin increased on 7.6 pp from 33.7% to 41.3% in 2015. SG&A as a % of Revenue increased on 5.2 pp from 29.1% to 34.3% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Founder Holdings Ltd's CAPEX/Revenue was 0.37% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. Average CAPEX/Revenue for the last three years was 0.51%.
Return on investment
The company operates at low ROIC (2.13%) and ROE (0.76%). ROIC increased slightly on 1.7 pp from 0.46% to 2.1% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is -8.5x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA surged on 4.2x from -12.7x to -8.5x in 2015. Debt dropped on 17.5% in 2015 while cash surged on 12.6% in 2015.
Appendix 1: Peers in Computers
Below you can find Founder Holdings Ltd benchmarking vs. other companies in Computers 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 |
|---|
| Peking University Resources Holdings Co Ltd ($618) | 16.2% | -49.6% | 11.2% | 106.0% | |
| Alibaba Health Information Technology Ltd ($241) | | 29.4% | -96.7% | 73.0% | 35.3% |
| Thiz Technology Group Ltd ($8119) | | -4.1% | -95.1% | 72.2% | 31.9% |
| Universal Technologies Holdings Ltd ($1026) | 95.5% | -47.3% | 49.8% | 67.1% | |
| PAX Global Technology Ltd ($327) | | 19.0% | 12.1% | 61.2% | 21.0% |
| |
|---|
| Median (24 companies) | 12.4% | 3.8% | 0.0% | 11.0% | 3.9% |
|---|
| Founder Holdings Ltd ($418) | | 29.4% | -39.4% | -16.4% | -10.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Universal Technologies Holdings Ltd ($1026) | 86.0% | 87.3% | 79.7% | 90.3% | |
| Thiz Technology Group Ltd ($8119) | 2.9% | 8.8% | 63.8% | 86.2% | 96.0% |
| Computer & Technologies Holdings Ltd ($46) | 27.4% | 45.3% | 54.0% | 52.1% | 54.2% |
| CCID Consulting Co Ltd ($8235) | 46.5% | 43.7% | 49.1% | 51.8% | |
| Alibaba Health Information Technology Ltd ($241) | 10.1% | 11.4% | -12.6% | 49.3% | 53.7% |
| |
|---|
| Median (22 companies) | 11.0% | 12.7% | 16.0% | 15.4% | 21.3% |
|---|
| Founder Holdings Ltd ($418) | 21.2% | 19.8% | 28.4% | 33.7% | 41.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Computer & Technologies Holdings Ltd ($46) | 4.8% | 12.9% | 19.9% | 20.1% | 23.2% |
| Ju Teng International Holdings Ltd ($3336) | 9.5% | 15.1% | 19.9% | 19.3% | 23.8% |
| PAX Global Technology Ltd ($327) | 18.9% | 16.5% | 17.4% | 18.8% | 22.7% |
| CCID Consulting Co Ltd ($8235) | 19.0% | 10.6% | 10.8% | 12.3% | |
| Universal Technologies Holdings Ltd ($1026) | 29.5% | 12.8% | 1.5% | 9.9% | |
| |
|---|
| Median (24 companies) | 2.5% | 3.2% | 2.2% | -1.5% | 5.3% |
|---|
| Founder Holdings Ltd ($418) | 3.4% | 2.3% | 6.5% | 2.4% | 5.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| North Asia Resources Holdings Ltd ($61) | 34.3% | 4.6% | 94.2% | 177.8% | 110.2% |
| Beautiful China Holdings Co Ltd ($706) | 44.9% | 8.4% | 2.2% | 26.2% | |
| Ju Teng International Holdings Ltd ($3336) | 17.6% | 14.1% | 18.7% | 20.0% | 17.3% |
| Alibaba Health Information Technology Ltd ($241) | 2.1% | 4.4% | 46.3% | 17.2% | 11.7% |
| Universal Technologies Holdings Ltd ($1026) | 8.5% | 20.0% | 5.7% | 14.2% | |
| |
|---|
| Median (24 companies) | 1.6% | 1.2% | 1.6% | 2.1% | 1.3% |
|---|
| Founder Holdings Ltd ($418) | 0.5% | 0.6% | 0.6% | 0.6% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lenovo Group Ltd ($992) | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% |
| PAX Global Technology Ltd ($327) | 14.1% | 12.3% | 12.8% | 18.7% | 22.4% |
| CCID Consulting Co Ltd ($8235) | 20.6% | 11.3% | 10.7% | 10.2% | |
| TPV Technology Ltd ($903) | 6.4% | 7.7% | 1.8% | 10.1% | 12.0% |
| Computer & Technologies Holdings Ltd ($46) | 4.1% | 6.0% | 8.6% | 9.4% | 10.8% |
| |
|---|
| Median (25 companies) | 3.7% | 0.9% | -0.2% | -1.4% | 6.1% |
|---|
| Founder Holdings Ltd ($418) | 6.3% | 4.2% | 6.0% | 0.5% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Thiz Technology Group Ltd ($8119) | | | | | 8.2x |
| Ju Teng International Holdings Ltd ($3336) | 2.5x | 2.1x | 1.8x | 1.7x | 1.6x |
| Proview International Holdings Ltd ($334) | | | | | 1.0x |
| Wong's International Hldgs ($99) | -1.8x | -3.5x | 2.7x | 1.4x | 0.8x |
| TPV Technology Ltd ($903) | 0.5x | -0.2x | 0.6x | -0.0x | 0.3x |
| |
|---|
| Median (10 companies) | -1.6x | -2.1x | -1.3x | -3.2x | 0.2x |
|---|
| Founder Holdings Ltd ($418) | -3.3x | -4.0x | -3.9x | -12.7x | -8.5x |
