Heng Xin China Holdings Ltd CAPEX jumped on 585% in 2015 while Revenue dropped on 26.7%
23/03/2016 • About Heng Xin China Holdings Ltd (
$8046) • By InTwits
Heng Xin China Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Heng Xin China Holdings Ltd is a company in decline: 2015 revenue growth was -26.7%, 5 years revenue CAGR was -44.4%
- The company operates at negative EBITDA Margin: -540.1%
- Heng Xin China Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -3.9% for the sames years0
- Heng Xin China Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.0%. At the same time it's a lot of higher than industry average of 17.7%.
- CAPEX is quite volatile: 38.4 in 2015, 5.6 in 2014, 9.4 in 2013, 98.8 in 2012, 117 in 2011
- The company has unprofitable business model: ROIC is at -31.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Heng Xin China Holdings Ltd ($8046) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 676.6 | 612.5 | 227.5 | 47.3 | 34.7 | -26.7% |
| Gross Profit | 313.2 | 257.8 | 131.1 | 35.5 | 12.2 | -65.7% |
| SG&A | | | | -1.6 | 57.6 | -3,650.7% |
| EBITDA | 235.8 | 147.3 | 13.1 | -271.8 | -187.3 | -31.1% |
| Net Income | 201.9 | 152.9 | -1,039.6 | -768.3 | -452.1 | -41.2% |
Balance Sheet
|
|---|
| Cash | 288.5 | 149.0 | 130.7 | 7.1 | 88.9 | 1,150.4% |
| Short Term Debt | 20.4 | 198.3 | 162.4 | 112.8 | 82.6 | -26.8% |
| Long Term Debt | 265.0 | 0.1 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 116.8 | 98.8 | 9.4 | 5.6 | 38.4 | 584.5% |
Ratios
|
|---|
| Revenue growth | 3.6% | -9.5% | -62.8% | -79.2% | -26.7% | |
| EBITDA growth | 7.3% | -37.5% | -91.1% | -2,175.8% | -31.1% | |
| Gross Margin | 46.3% | 42.1% | 57.6% | 75.0% | 35.1% | -39.9% |
| EBITDA Margin | 34.8% | 24.0% | 5.8% | -574.2% | -540.1% | 34.1% |
| Net Income Margin | 29.8% | 25.0% | -456.9% | -1,623.1% | -1,303.7% | 319.4% |
| SG&A, % of revenue | | | | -3.4% | 166.1% | 169.5% |
| CAPEX, % of revenue | 17.3% | 16.1% | 4.1% | 11.9% | 110.8% | 98.9% |
| ROIC | 13.9% | 6.3% | -0.4% | -26.5% | -31.7% | -5.2% |
| ROE | 14.7% | 8.4% | -68.1% | -106.1% | -223.8% | -117.6% |
| Net Debt/EBITDA | -0.0x | 0.3x | 2.4x | | | 0.0x |
Revenue and profitability
Heng Xin China Holdings Ltd's Revenue dropped on 26.7% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 34.1 pp from -574% to -540% in 2015.
Gross Margin dropped on 39.9 pp from 75.0% to 35.1% in 2015. SG&A as a % of Revenue jumped on 169 pp from -3.4% to 166% in 2015.
Net Income marign jumped on 319 pp from -1,623% to -1,304% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 111% in 2015. Heng Xin China Holdings Ltd showed fast CAPEX/Revenue growth of 94.6 pp from 16.1% in 2012 to 111% in 2015. It's average CAPEX/Revenue for the last three years was 42.2%.
Return on investment
The company operates at negative ROIC (-31.72%) and ROE (-223.76%). ROIC decreased on 5.2 pp from -26.5% to -31.7% in 2015. ROE dropped on 118 pp from -106% to -224% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -5.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt dropped on 26.8% in 2015 while cash surged on 1,150% in 2015.
Appendix 1: Peers in Semiconductors
Below we provide Heng Xin China Holdings Ltd benchmarking against other companies in Semiconductors 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 |
|---|
| Phoenitron Holdings Ltd ($8066) | | -7.2% | 4.0% | 243.8% | 405.3% |
| Jun Yang Solar Power Investments Ltd ($397) | | -81.0% | 256.8% | 1.1% | 168.9% |
| Shanghai Fudan Microelectronics Group Co Ltd ($1385) | | 15.5% | 16.0% | 3.3% | 23.2% |
| Shunfeng International Clean Energy Ltd ($1165) | | -46.3% | 44.4% | 275.6% | 22.4% |
| Solomon Systech International Ltd ($2878) | | 26.2% | -15.3% | 8.9% | 18.0% |
| |
|---|
| Median (17 companies) | -6.7% | -14.0% | 3.8% | 11.7% | -0.2% |
|---|
| Heng Xin China Holdings Ltd ($8046) | | -9.5% | -62.8% | -79.2% | -26.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Jinhai International Group Ltd ($139) | -92.8% | | -7.8% | 73.3% | -69.1% |
| PacMOS Technologies Holdings Ltd ($1010) | 68.1% | 68.8% | 65.7% | 65.7% | 57.5% |
| Intel Corp ($4335) | 62.5% | 62.1% | 59.8% | 63.7% | 62.6% |
| Hanergy Thin Film Power Group Ltd ($566) | 62.8% | 71.4% | 80.3% | 57.3% | |
| Jun Yang Solar Power Investments Ltd ($397) | -2.4% | 87.3% | 79.3% | 53.8% | 73.8% |
| |
|---|
| Median (22 companies) | 18.0% | 22.1% | 23.7% | 29.5% | 31.0% |
|---|
| Heng Xin China Holdings Ltd ($8046) | 46.3% | 42.1% | 57.6% | 75.0% | 35.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Ruifeng Renewable Energy Ltd ($527) | 13.4% | 9.1% | 37.2% | 88.0% | |
| Hanergy Thin Film Power Group Ltd ($566) | 46.0% | 66.0% | 73.9% | 43.7% | |
| Intel Corp ($4335) | 43.6% | 41.5% | 38.6% | 42.8% | 41.0% |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -11.8% | 9.5% | 40.5% | 26.3% |
| Semiconductor Manufacturing International Corp ($981) | 26.9% | 34.3% | 35.5% | 34.5% | 33.3% |
| |
|---|
| Median (22 companies) | 10.9% | 7.4% | 9.5% | 7.1% | 10.3% |
|---|
| Heng Xin China Holdings Ltd ($8046) | 34.8% | 24.0% | 5.8% | -574.2% | -540.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jun Yang Solar Power Investments Ltd ($397) | 390.5% | 671.1% | 25.9% | 78.9% | 104.2% |
| Han Tang International Holdings Ltd ($1187) | 1.8% | | | 55.2% | 0.3% |
| Semiconductor Manufacturing International Corp ($981) | 70.6% | 23.5% | 35.1% | 33.2% | 55.0% |
| Comtec Solar Systems Group Ltd ($712) | 22.2% | | 30.2% | 18.7% | |
| Intel Corp ($4335) | 19.9% | 20.7% | 20.3% | 18.1% | 13.2% |
| |
|---|
| Median (22 companies) | 8.6% | 4.4% | 5.5% | 5.7% | 4.2% |
|---|
| Heng Xin China Holdings Ltd ($8046) | 17.3% | 16.1% | 4.1% | 11.9% | 110.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ASM Pacific Technology Ltd ($522) | 52.1% | 12.3% | 9.2% | 21.9% | 13.7% |
| Shanghai Fudan Microelectronics Group Co Ltd ($1385) | 22.2% | 25.5% | 22.7% | 21.1% | 20.9% |
| Intel Corp ($4335) | 32.4% | 23.7% | 17.1% | 20.6% | 17.7% |
| Hanergy Thin Film Power Group Ltd ($566) | 9.3% | 14.1% | 15.1% | 19.3% | |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -13.0% | 1.5% | 17.4% | 5.0% |
| |
|---|
| Median (22 companies) | 1.7% | -2.2% | 0.6% | 3.1% | 0.9% |
|---|
| Heng Xin China Holdings Ltd ($8046) | 13.9% | 6.3% | -0.4% | -26.5% | -31.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Solargiga Energy Holdings Ltd ($757) | 5.9x | | 13.8x | 4.4x | 9.0x |
| Shunfeng International Clean Energy Ltd ($1165) | 8.2x | | 25.8x | 3.4x | 5.7x |
| Semiconductor Manufacturing International Corp ($981) | 1.9x | 1.3x | 1.0x | 1.0x | 0.5x |
| Intel Corp ($4335) | 0.1x | 0.2x | 0.4x | 0.5x | 0.3x |
| ASM Pacific Technology Ltd ($522) | -0.4x | -0.5x | -0.8x | -0.1x | 0.2x |
| |
|---|
| Median (10 companies) | -0.1x | 0.1x | 0.3x | 0.2x | 0.1x |
|---|
