Golik Holdings Ltd reports 21.1% revenue decline in 2015 and 1.4 pp EBITDA Margin growth from 7.1% to 8.4%
23/03/2016 • About Golik Holdings Ltd (
$1118) • By InTwits
Golik Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Golik Holdings Ltd is a company in decline: 2015 revenue growth was -21.1%, 5 years revenue CAGR was -5.5%
- EBITDA Margin is expanding: 8.4% in 2015 vs. 7.1% in 2014 vs. 6.3% in 2011
- Golik Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: 24.9 in 2015, 5.1 in 2014, 72.9 in 2013, 21.1 in 2012, 63.0 in 2011
- The company has business model with average profitability: ROIC is at 10.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Golik Holdings Ltd ($1118) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,826 | 2,917 | 3,070 | 3,201 | 2,525 | -21.1% |
| Gross Profit | 325 | 352 | 391 | 441 | 406 | -7.9% |
| SG&A | | 242 | 265 | 275 | 264 | -3.8% |
| EBITDA | 178 | 149 | 165 | 227 | 213 | -6.0% |
| Net Income | 101 | 82 | 92 | 107 | 93 | -13.7% |
Balance Sheet
|
|---|
| Cash | 351 | 373 | 465 | 528 | 381 | -27.8% |
| Short Term Debt | 923 | 670 | 911 | 717 | 308 | -57.1% |
| Long Term Debt | 22 | 14 | 73 | 55 | 42 | -23.9% |
Cash flow
|
|---|
| Capex | 63 | 21 | 73 | 5 | 25 | 389.0% |
Ratios
|
|---|
| Revenue growth | -15.5% | 3.2% | 5.3% | 4.3% | -21.1% | |
| EBITDA growth | 1.3% | -16.2% | 10.6% | 37.1% | -6.0% | |
| Gross Margin | 11.5% | 12.1% | 12.7% | 13.8% | 16.1% | 2.3% |
| EBITDA Margin | 6.3% | 5.1% | 5.4% | 7.1% | 8.4% | 1.4% |
| Net Income Margin | 3.6% | 2.8% | 3.0% | 3.4% | 3.7% | 0.3% |
| SG&A, % of revenue | | 8.3% | 8.6% | 8.6% | 10.5% | 1.9% |
| CAPEX, % of revenue | 2.2% | 0.7% | 2.4% | 0.2% | 1.0% | 0.8% |
| ROIC | 9.0% | 7.0% | 7.4% | 10.0% | 10.8% | 0.8% |
| ROE | 14.8% | 10.7% | 11.1% | 11.8% | 9.5% | -2.3% |
| Net Debt/EBITDA | 3.3x | 2.1x | 3.1x | 1.1x | -0.1x | -1.2x |
Revenue and profitability
The company's Revenue dropped on 21.1% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.4 pp from 7.1% to 8.4% in 2015.
Gross Margin increased on 2.3 pp from 13.8% to 16.1% in 2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 8.6% to 10.5% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.98% in 2015. The company showed almost no change in CAPEX/Revenue from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at low ROIC (10.81%) and ROE (9.53%). ROIC increased slightly on 0.80 pp from 10.0% to 10.8% in 2015. ROE decreased on 2.3 pp from 11.8% to 9.5% in 2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA dropped on 1.2x from 1.1x to -0.1x in 2015. Debt dropped on 54.7% in 2015 while cash dropped on 27.8% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Golik Holdings Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| Pan Asia Mining Ltd ($8173) | | 3,079.7% | -17.1% | 48.9% | -97.4% |
| CAA Resources Ltd ($2112) | | 99.6% | 103.2% | 38.0% | 261.2% |
| Tiangong International Co Ltd ($826) | 32.5% | 0.2% | 8.9% | 33.5% | |
| Da Ming International Holdings Ltd ($1090) | 33.1% | -2.1% | 29.3% | 29.8% | |
| Xiwang Special Steel Co Ltd ($1266) | 58.5% | -19.3% | 2.0% | 22.9% | |
| |
|---|
| Median (19 companies) | 33.1% | -9.7% | -1.1% | -6.0% | -15.3% |
|---|
| Golik Holdings Ltd ($1118) | | 3.2% | 5.3% | 4.3% | -21.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 51.1% | 47.4% | 50.7% | 39.6% | |
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | |
| Vale SA ($6210) | 58.4% | 45.4% | 48.3% | 33.1% | 19.6% |
| China Metal International Holdings Inc ($319) | 21.0% | 20.9% | 24.3% | 24.8% | |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | |
| |
|---|
| Median (19 companies) | 21.0% | 17.8% | 20.3% | 11.3% | 16.6% |
|---|
| Golik Holdings Ltd ($1118) | 11.5% | 12.1% | 12.7% | 13.8% | 16.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 46.5% | 39.7% | 36.2% | 31.3% | |
| China Hanking Holdings Ltd ($3788) | 63.1% | 40.4% | 40.9% | 30.6% | |
| Vale SA ($6210) | 55.9% | 24.2% | 40.8% | 30.1% | -16.9% |
| China Metal International Holdings Inc ($319) | 17.8% | 19.7% | 21.3% | 21.0% | |
| Fosun International Ltd ($656) | 15.8% | 16.7% | 23.0% | 20.9% | |
| |
|---|
| Median (19 companies) | 15.7% | 16.4% | 21.3% | 8.1% | -16.9% |
|---|
| Golik Holdings Ltd ($1118) | 6.3% | 5.1% | 5.4% | 7.1% | 8.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 690.4% | | 926.9% | 1,395.7% | 197.0% |
| Wanguo International Mining Group Ltd ($3939) | 13.2% | 24.0% | 39.3% | 32.5% | |
| Vale SA ($6210) | 25.8% | 34.0% | 28.1% | 29.8% | 34.5% |
| Xiwang Special Steel Co Ltd ($1266) | 14.9% | 22.6% | 31.5% | 21.5% | |
| Chongqing Iron & Steel Co Ltd ($1053) | 10.8% | 12.5% | 12.0% | 20.9% | |
| |
|---|
| Median (19 companies) | 10.8% | 9.0% | 10.9% | 8.1% | 24.1% |
|---|
| Golik Holdings Ltd ($1118) | 2.2% | 0.7% | 2.4% | 0.2% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 74.9% | 38.4% | 24.4% | 15.0% | |
| China Metal International Holdings Inc ($319) | 11.5% | 11.0% | 12.0% | 12.7% | |
| Xiwang Special Steel Co Ltd ($1266) | 33.5% | 7.8% | 8.7% | 11.5% | |
| Tiangong International Co Ltd ($826) | 14.8% | 14.5% | 13.4% | 10.7% | |
| Xingda International Holdings Ltd ($1899) | 10.5% | 6.2% | 10.3% | 7.8% | 2.0% |
| |
|---|
| Median (19 companies) | 11.5% | 6.2% | 7.9% | 3.1% | -6.4% |
|---|
| Golik Holdings Ltd ($1118) | 9.0% | 7.0% | 7.4% | 10.0% | 10.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fosun International Ltd ($656) | 4.6x | 4.4x | 4.8x | 5.5x | |
| Maanshan Iron & Steel Co Ltd ($323) | 5.0x | 55.2x | 7.3x | 5.3x | |
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | |
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | |
| |
|---|
| Median (13 companies) | 1.3x | 2.3x | 2.5x | 3.2x | 0.2x |
|---|
| Golik Holdings Ltd ($1118) | 3.3x | 2.1x | 3.1x | 1.1x | -0.1x |
