Freetech Road Recycling Technology Holdings Ltd reports 57.9% revenue growth in 2015 and almost no change in EBITDA Margin of 17.7%
23/03/2016 • About Freetech Road Recycling Technology Holdings Ltd (
$6888) • By InTwits
Freetech Road Recycling Technology Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 17.7% in 2015, 17.7% in 2014, 37.0% in 2013, 40.8% in 2012, 35.7% in 2011
- Freetech Road Recycling Technology Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.3%. At the same time it's a lot of higher than industry average of 6.3%.
- CAPEX is quite volatile: 19.6 in 2015, 78.7 in 2014, 48.5 in 2013, 20.6 in 2012, 17.1 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Freetech Road Recycling Technology Holdings Ltd ($6888) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 281.3 | 486.0 | 628.7 | 390.4 | 616.6 | 57.9% |
| Gross Profit | 140.9 | 263.0 | 341.1 | 162.0 | 185.8 | 14.7% |
| SG&A | 41.4 | 65.0 | 94.8 | 88.1 | 106.6 | 21.0% |
| EBITDA | 100.3 | 198.3 | 232.9 | 69.0 | 108.9 | 57.9% |
| Net Income | 62.2 | 146.6 | 182.5 | 58.5 | 64.5 | 10.3% |
Balance Sheet
|
|---|
| Cash | 135.3 | 130.9 | 614.7 | 110.8 | 251.9 | 127.4% |
| Short Term Debt | 58.8 | 78.3 | 49.6 | 0.6 | 72.3 | 11,307.7% |
| Long Term Debt | 0.0 | 7.5 | 21.8 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 17.1 | 20.6 | 48.5 | 78.7 | 19.6 | -75.1% |
Ratios
|
|---|
| Revenue growth | 20.6% | 72.8% | 29.4% | -37.9% | 57.9% | |
| EBITDA growth | 86.4% | 97.6% | 17.5% | -70.4% | 57.9% | |
| Gross Margin | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% | -11.4% |
| EBITDA Margin | 35.7% | 40.8% | 37.0% | 17.7% | 17.7% | -0.0% |
| Net Income Margin | 22.1% | 30.2% | 29.0% | 15.0% | 10.5% | -4.5% |
| SG&A, % of revenue | 14.7% | 13.4% | 15.1% | 22.6% | 17.3% | -5.3% |
| CAPEX, % of revenue | 6.1% | 4.2% | 7.7% | 20.2% | 3.2% | -17.0% |
| ROIC | 54.0% | 68.6% | 24.9% | 3.4% | 5.6% | 2.2% |
| ROE | 94.6% | 101.1% | 25.8% | 4.9% | 5.6% | 0.6% |
| Net Debt/EBITDA | -0.8x | -0.2x | -2.3x | -1.6x | -1.6x | -0.1x |
Revenue and profitability
Freetech Road Recycling Technology Holdings Ltd's Revenue jumped on 57.9% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin dropped on 11.4 pp from 41.5% to 30.1% in 2015. SG&A as a % of Revenue decreased on 5.3 pp from 22.6% to 17.3% in 2015.
Net Income marign decreased on 4.5 pp from 15.0% to 10.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.2% in 2015. CAPEX/Revenue decreased slightly on 1.1 pp from 4.2% in 2012 to 3.2% in 2015. For the last three years the average CAPEX/Revenue was 10.4%.
Return on investment
The company operates at low ROIC (5.64%) and ROE (5.58%). ROIC increased on 2.2 pp from 3.4% to 5.6% in 2015. ROE increased slightly on 0.63 pp from 4.9% to 5.6% in 2015.
Leverage (Debt)
Debt level is -1.6x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from -1.6x to -1.6x in 2015. Debt surged on 11,308% in 2015 while cash surged on 127% in 2015.
Appendix 1: Peers in Engineering&Construction
Below you can find Freetech Road Recycling Technology Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| Richly Field China Development Ltd ($313) | | | -45.0% | 464.2% | -65.7% |
| Junefield Department Store Group Ltd ($758) | 22.9% | -20.3% | -24.9% | 126.6% | |
| CNQC International Holdings Ltd ($1240) | | 21.6% | 91.0% | 103.7% | 807.4% |
| Wison Engineering Services Co Ltd ($2236) | 1.2% | -2.9% | -24.9% | 90.3% | |
| China Resources and Transportation Group Ltd ($269) | | 939.8% | 3,196.3% | 87.9% | -41.6% |
| |
|---|
| Median (42 companies) | 8.2% | 9.7% | 21.0% | 16.8% | 12.6% |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | | 72.8% | 29.4% | -37.9% | 57.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | 2.2% | 43.6% | 65.6% | 64.0% | |
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | |
| Kingbo Strike Ltd ($1421) | 22.9% | 32.4% | 44.4% | 40.3% | 30.7% |
| Broad Greenstate International Co Ltd ($1253) | 16.7% | 20.1% | 28.7% | 35.8% | 36.7% |
| Grand Ming Group Holdings Ltd ($1271) | 20.4% | 11.0% | 18.1% | 35.7% | 19.7% |
| |
|---|
| Median (37 companies) | 11.0% | 12.4% | 12.1% | 12.9% | 13.3% |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | -0.5% | 46.2% | 73.8% | 77.1% | |
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | 51.6% |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | 60.9% |
| Grand Ming Group Holdings Ltd ($1271) | 17.5% | 10.0% | 15.8% | 31.0% | 19.0% |
| |
|---|
| Median (43 companies) | 8.5% | 9.2% | 7.8% | 6.8% | 8.1% |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 35.7% | 40.8% | 37.0% | 17.7% | 17.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| Shun Cheong Holdings ($650) | 7.2% | 16.4% | 8.0% | 23.9% | |
| KFM Kingdom Holdings Ltd ($3816) | 6.5% | 4.6% | 11.5% | 14.9% | 9.6% |
| China Resources and Transportation Group Ltd ($269) | 474.4% | 19.2% | 1.1% | 14.0% | 0.5% |
| |
|---|
| Median (43 companies) | 4.3% | 2.3% | 2.5% | 1.6% | 2.0% |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 6.1% | 4.2% | 7.7% | 20.2% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| Broad Greenstate International Co Ltd ($1253) | | 33.2% | 85.1% | 51.2% | 26.0% |
| Kingbo Strike Ltd ($1421) | | 56.9% | 125.4% | 48.9% | 11.4% |
| Ngai Shun Holdings Ltd ($1246) | | 68.8% | 77.2% | 45.2% | 31.0% |
| CNQC International Holdings Ltd ($1240) | 23.1% | 12.2% | 22.3% | 40.4% | 21.8% |
| |
|---|
| Median (44 companies) | 6.9% | 5.8% | 5.3% | 4.4% | 2.7% |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 54.0% | 68.6% | 24.9% | 3.4% | 5.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| Chun Wo Development Holdings Ltd ($711) | | 14.3x | 8.1x | 12.6x | 15.9x |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | |
| |
|---|
| Median (36 companies) | 0.5x | 1.5x | 1.7x | 2.4x | 2.4x |
|---|
| Freetech Road Recycling Technology Holdings Ltd ($6888) | -0.8x | -0.2x | -2.3x | -1.6x | -1.6x |
