Dragon Crown Group Holdings Ltd reports 41.9% CAPEX decline while 2.9% Revenue growth
24/03/2016 • About Dragon Crown Group Holdings Ltd (
$935) • By InTwits
Dragon Crown Group Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dragon Crown Group Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.5%. At the same time it's a lot of higher than industry average of 8.8%.
- CAPEX is quite volatile: 34.9 in 2015, 60.1 in 2014, 141 in 2013, 95.8 in 2012, 5.9 in 2011
- The company has business model with average profitability: ROIC is at 10.2%
- It operates with high leverage: Net Debt/EBITDA is -1.0x while industry average is -20.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dragon Crown Group Holdings Ltd ($935) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 240.7 | 257.8 | 270.0 | 261.6 | 269.1 | 2.9% |
| Gross Profit | 138.3 | 153.4 | 161.9 | 149.5 | 145.1 | -2.9% |
| SG&A | | | | 45.4 | 47.1 | 3.6% |
| EBITDA | 139.2 | 173.6 | 169.7 | 157.5 | 164.4 | 4.4% |
| Net Income | 90.1 | 99.1 | 104.2 | 80.9 | 77.1 | -4.7% |
Balance Sheet
|
|---|
| Cash | 403.2 | 265.7 | 320.5 | 303.7 | 211.2 | -30.4% |
| Short Term Debt | 144.5 | 12.0 | 14.2 | 90.8 | 28.3 | -68.8% |
| Long Term Debt | 11.9 | 0.0 | 134.9 | 42.5 | 14.2 | -66.7% |
Cash flow
|
|---|
| Capex | 5.9 | 95.8 | 140.5 | 60.1 | 34.9 | -41.9% |
Ratios
|
|---|
| Revenue growth | 3.3% | 7.1% | 4.8% | -3.1% | 2.9% | |
| EBITDA growth | -10.9% | 24.7% | -2.2% | -7.2% | 4.4% | |
| Gross Margin | 57.5% | 59.5% | 60.0% | 57.2% | 53.9% | -3.2% |
| EBITDA Margin | 57.8% | 67.3% | 62.9% | 60.2% | 61.1% | 0.9% |
| Net Income Margin | 37.4% | 38.4% | 38.6% | 30.9% | 28.7% | -2.3% |
| SG&A, % of revenue | | | | 17.4% | 17.5% | 0.1% |
| CAPEX, % of revenue | 2.5% | 37.2% | 52.0% | 23.0% | 13.0% | -10.0% |
| ROIC | 11.8% | 13.5% | 11.9% | 9.5% | 10.2% | 0.6% |
| ROE | 14.0% | 11.3% | 11.3% | 8.6% | 8.3% | -0.3% |
| Net Debt/EBITDA | -1.8x | -1.5x | -1.0x | -1.1x | -1.0x | 0.1x |
Revenue and profitability
The company's Revenue increased on 2.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 8.0% to 11.4% in 2015.
Gross Margin decreased on 3.2 pp from 57.2% to 53.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 2.3 pp from 30.9% to 28.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Dragon Crown Group Holdings Ltd had CAPEX/Revenue of 13.0%. CAPEX/Revenue dropped on 24.2 pp from 37.2% in 2012 to 13.0% in 2015. For the last three years the average CAPEX/Revenue was 29.3%.
Return on investment
The company operates at low ROIC (10.17%) and ROE (8.34%). ROIC increased slightly on 0.64 pp from 9.5% to 10.2% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.0x and Debt / EBITDA is 0.3x. Net Debt / EBITDA increased on 0.1x from -1.1x to -1.0x in 2015. Debt dropped on 68.1% in 2015 while cash dropped on 30.4% in 2015.
Appendix 1: Peers in Commercial Services
Below we provide Dragon Crown Group Holdings Ltd benchmarking against other companies in Commercial Services 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 |
|---|
| Global Energy Resources International Group Ltd ($8192) | | -61.9% | -27.8% | 2,912.9% | 19.7% |
| Dingyi Group Investment Ltd ($508) | | 8.8% | -95.9% | 1,361.2% | -32.6% |
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | | 34.6% | 86.9% | 37.2% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Goldpac Group Ltd ($3315) | | 52.3% | 64.4% | 36.8% | 10.8% |
| |
|---|
| Median (62 companies) | 34.2% | 9.0% | 6.6% | 9.9% | 6.5% |
|---|
| Dragon Crown Group Holdings Ltd ($935) | | 7.1% | 4.8% | -3.1% | 2.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| U Banquet Group Holding Ltd ($8107) | | | | 76.5% | 74.5% |
| China Communication Telecom Services Co Ltd ($8206) | -56.6% | 61.6% | 58.6% | 69.1% | 70.2% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| |
|---|
| Median (57 companies) | 32.9% | 31.0% | 29.2% | 30.9% | 30.9% |
|---|
| Dragon Crown Group Holdings Ltd ($935) | 57.5% | 59.5% | 60.0% | 57.2% | 53.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | 73.6% |
| Shenzhen Expressway Co Ltd ($548) | 80.4% | 74.3% | 79.4% | 76.6% | 53.0% |
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | 61.6% | 84.9% | 75.9% | 80.9% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| Anhui Expressway Co Ltd ($995) | 62.7% | 56.9% | 54.1% | 60.4% | |
| |
|---|
| Median (62 companies) | 16.0% | 16.0% | 13.4% | 11.0% | 8.5% |
|---|
| Dragon Crown Group Holdings Ltd ($935) | 57.8% | 67.3% | 62.9% | 60.2% | 61.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 16.8% | 3.9% | 7.0% | 59.8% | |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | |
| Finet Group Ltd ($8317) | 3.9% | 10.3% | 9.1% | 26.0% | 8.4% |
| HC International Inc ($2280) | 15.1% | 8.5% | 28.7% | 24.7% | |
| China Conch Venture Holdings Ltd ($586) | 12.5% | 13.8% | 5.7% | 22.3% | 7.6% |
| |
|---|
| Median (61 companies) | 3.9% | 3.1% | 4.0% | 3.6% | 4.3% |
|---|
| Dragon Crown Group Holdings Ltd ($935) | 2.5% | 37.2% | 52.0% | 23.0% | 13.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mega Expo Holdings Ltd ($1360) | | 270.5% | 481.1% | 54.4% | 10.1% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| U Banquet Group Holding Ltd ($8107) | | 98.5% | 23.9% | 28.0% | -3.7% |
| PPS International Holdings Ltd ($8201) | | 101.6% | 35.6% | 23.8% | -13.7% |
| |
|---|
| Median (62 companies) | 5.0% | 6.0% | 5.2% | 4.2% | 3.4% |
|---|
| Dragon Crown Group Holdings Ltd ($935) | 11.8% | 13.5% | 11.9% | 9.5% | 10.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | 4.1x |
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | |
| Anxian Yuan China Holdings Ltd ($922) | | | 4.6x | 3.8x | 0.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | 6.2x |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| |
|---|
| Median (41 companies) | -0.1x | -0.0x | -0.7x | -0.4x | -0.5x |
|---|
| Dragon Crown Group Holdings Ltd ($935) | -1.8x | -1.5x | -1.0x | -1.1x | -1.0x |
