Topsearch International Holdings Ltd revenue decline decelerated to 7.2% in 2015 vs. 15.3% a year earliner
23/03/2016 • About Topsearch International Holdings Ltd (
$2323) • By InTwits
Topsearch International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Topsearch International Holdings Ltd is a company in decline: 2015 revenue growth was -7.2%, 5 years revenue CAGR was -14.1%
- The company operates at negative EBITDA Margin: -15.0%
- Topsearch International Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -7.1%0
- Topsearch International Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: 6.4 in 2015, 7.0 in 2014, 14.6 in 2013, 34.5 in 2012, 6.3 in 2011
- The company has unprofitable business model: ROIC is at -18.6%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Topsearch International Holdings Ltd ($2323) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,135 | 817 | 720 | 610 | 567 | -7.2% |
| Gross Profit | 2 | 12 | 99 | 10 | 29 | 191.8% |
| SG&A | | 158 | 142 | 130 | 153 | 18.4% |
| EBITDA | -51 | -69 | 10 | -78 | -85 | 9.5% |
| Net Income | -439 | 96 | -90 | -162 | 18 | -111.1% |
Balance Sheet
|
|---|
| Cash | 107 | 64 | 86 | 95 | 97 | 2.4% |
| Short Term Debt | 438 | 385 | 103 | 106 | 251 | 137.0% |
| Long Term Debt | 52 | 105 | 104 | 174 | 1 | -99.7% |
Cash flow
|
|---|
| Capex | 6 | 34 | 15 | 7 | 6 | -8.8% |
Ratios
|
|---|
| Revenue growth | -6.2% | -28.0% | -11.8% | -15.3% | -7.2% | |
| EBITDA growth | -146.2% | 33.7% | -115.1% | -851.1% | 9.5% | |
| Gross Margin | 0.2% | 1.5% | 13.7% | 1.6% | 5.2% | 3.5% |
| EBITDA Margin | -4.5% | -8.4% | 1.4% | -12.7% | -15.0% | -2.3% |
| Net Income Margin | -38.7% | 11.8% | -12.5% | -26.5% | 3.2% | 29.7% |
| SG&A, % of revenue | | 19.4% | 19.8% | 21.2% | 27.1% | 5.8% |
| CAPEX, % of revenue | 0.6% | 4.2% | 2.0% | 1.1% | 1.1% | -0.0% |
| ROIC | -15.0% | -12.5% | -2.7% | -15.7% | -18.6% | -2.9% |
| ROE | -54.7% | 15.7% | -15.3% | -34.6% | 4.9% | 39.5% |
| Net Debt/EBITDA | | | 11.7x | | | 0.0x |
Revenue and profitability
Topsearch International Holdings Ltd's Revenue decreased on 7.2% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from -12.7% to -15.0% in 2015.
Gross Margin increased on 3.5 pp from 1.6% to 5.2% in 2015. SG&A as a % of Revenue increased on 5.8 pp from 21.2% to 27.1% in 2015.
Net Income marign jumped on 29.7 pp from -26.5% to 3.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.1% in 2015. The company's CAPEX/Revenue decreased on 3.1 pp from 4.2% in 2012 to 1.1% in 2015. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at negative ROIC (-18.61%) and low but positive ROE (4.89%). ROIC decreased on 2.9 pp from -15.7% to -18.6% in 2015. ROE surged on 39.5 pp from -34.6% to 4.9% in 2015.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt dropped on 10.1% in 2015 while cash increased on 2.4% in 2015.
Appendix 1: Peers in Electronics
Below we provide Topsearch International Holdings Ltd benchmarking against other companies in Electronics 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 |
|---|
| China Netcom Technology Holdings Ltd ($8071) | -22.0% | 11.6% | -23.0% | 104.1% | |
| Technovator International Ltd ($1206) | | 27.4% | 34.1% | 35.9% | 19.0% |
| Tongda Group Holdings Ltd ($698) | | 8.3% | 6.4% | 32.1% | 26.8% |
| Advanced Card Systems Holdings Ltd ($8210) | | 36.9% | 20.8% | 26.7% | -4.8% |
| Alltronics Holdings Ltd ($833) | 33.9% | -1.6% | -1.6% | 23.4% | |
| |
|---|
| Median (49 companies) | 6.9% | -0.3% | 4.0% | 6.2% | 1.2% |
|---|
| Topsearch International Holdings Ltd ($2323) | | -28.0% | -11.8% | -15.3% | -7.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | 49.6% |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | 41.5% |
| TeleEye Holdings Ltd ($8051) | 51.6% | 44.0% | 42.1% | 38.5% | 37.0% |
| Wasion Group Holdings Ltd ($3393) | 30.3% | 32.8% | 35.1% | 34.2% | 30.2% |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | 34.6% |
| |
|---|
| Median (47 companies) | 13.6% | 14.6% | 13.8% | 14.0% | 17.5% |
|---|
| Topsearch International Holdings Ltd ($2323) | 0.2% | 1.5% | 13.7% | 1.6% | 5.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | 34.8% |
| Nanjing Sample Technology Co Ltd ($1708) | 31.5% | 26.8% | 21.1% | 22.3% | 15.7% |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | 19.3% |
| Technovator International Ltd ($1206) | 19.2% | 19.0% | 19.0% | 20.8% | 18.0% |
| Trigiant Group Ltd ($1300) | 17.0% | 17.6% | 18.2% | 18.5% | 16.2% |
| |
|---|
| Median (49 companies) | 9.3% | 7.2% | 7.6% | 5.3% | 8.6% |
|---|
| Topsearch International Holdings Ltd ($2323) | -4.5% | -8.4% | 1.4% | -12.7% | -15.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AKM Industrial Co Ltd ($1639) | 7.4% | 5.0% | 17.4% | 25.2% | 18.0% |
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | 18.4% |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | 25.8% |
| Tech Pro Technology Development Ltd ($3823) | 32.8% | 7.6% | 13.1% | 15.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 3.7% | 23.9% | 15.5% | 12.0% | 2.7% |
| |
|---|
| Median (49 companies) | 3.4% | 3.7% | 3.0% | 4.2% | 3.2% |
|---|
| Topsearch International Holdings Ltd ($2323) | 0.6% | 4.2% | 2.0% | 1.1% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | 27.8% |
| Cowell e Holdings Inc ($1415) | | 12.5% | 27.1% | 24.4% | 25.8% |
| Advanced Card Systems Holdings Ltd ($8210) | 15.5% | 26.7% | 24.7% | 20.2% | 9.7% |
| Alltronics Holdings Ltd ($833) | 19.3% | 13.1% | 15.2% | 19.8% | |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | 16.3% |
| |
|---|
| Median (49 companies) | 5.9% | 4.5% | 3.5% | 3.4% | 3.7% |
|---|
| Topsearch International Holdings Ltd ($2323) | -15.0% | -12.5% | -2.7% | -15.7% | -18.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
| Sino-Tech International Holdings Ltd ($724) | | | 15.7x | 24.7x | |
| Eyang Holdings Group Co Ltd ($117) | 4.2x | 3.3x | 3.7x | 17.9x | |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.8x | 2.2x | 2.6x | 5.7x | 5.4x |
| |
|---|
| Median (36 companies) | 0.7x | 1.1x | 1.1x | 1.0x | 0.2x |
|---|
