Dream International Ltd reports 45.8% EBITDA growth and 10.8% Revenue growth
24/03/2016 • About Dream International Ltd (
$1126) • By InTwits
Dream International Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dream International Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's in pair with industry average of 4.7%.
- CAPEX is quite volatile: 132 in 2015, 184 in 2014, 51.0 in 2013, 39.6 in 2012, 27.9 in 2011
- The company has highly profitable business model: ROIC is at 19.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dream International Ltd ($1126) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,083 | 1,353 | 1,353 | 1,637 | 1,814 | 10.8% |
| Gross Profit | 263 | 346 | 394 | 367 | 427 | 16.4% |
| SG&A | 189 | 204 | 223 | 246 | 238 | -3.1% |
| EBITDA | 112 | 178 | 200 | 160 | 234 | 45.8% |
| Net Income | 75 | 133 | 124 | 123 | 151 | 22.8% |
Balance Sheet
|
|---|
| Cash | 177 | 282 | 321 | 242 | 251 | 4.1% |
| Short Term Debt | 18 | 21 | 22 | 35 | 4 | -88.8% |
| Long Term Debt | 5 | 2 | 1 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 28 | 40 | 51 | 184 | 132 | -27.9% |
Ratios
|
|---|
| Revenue growth | -29.9% | 24.9% | -0.1% | 21.0% | 10.8% | |
| EBITDA growth | -53.0% | 58.9% | 12.4% | -19.8% | 45.8% | |
| Gross Margin | 24.3% | 25.6% | 29.1% | 22.4% | 23.5% | 1.1% |
| EBITDA Margin | 10.3% | 13.2% | 14.8% | 9.8% | 12.9% | 3.1% |
| Net Income Margin | 6.9% | 9.8% | 9.2% | 7.5% | 8.3% | 0.8% |
| SG&A, % of revenue | 17.5% | 15.1% | 16.5% | 15.0% | 13.1% | -1.9% |
| CAPEX, % of revenue | 2.6% | 2.9% | 3.8% | 11.2% | 7.3% | -3.9% |
| ROIC | 12.4% | 19.3% | 19.4% | 13.3% | 19.4% | 6.0% |
| ROE | 11.2% | 17.4% | 14.4% | 13.4% | 15.2% | 1.9% |
| Net Debt/EBITDA | -1.4x | -1.5x | -1.5x | -1.3x | -1.1x | 0.2x |
Revenue and profitability
Dream International Ltd's Revenue surged on 10.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 32.4 pp from 28.8% to 61.1% in FY2015.
Gross Margin increased slightly on 1.1 pp from 22.4% to 23.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.9 pp from 15.0% to 13.1% in 2015.
Net Income marign increased slightly on 0.81 pp from 7.5% to 8.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 7.3%. The company's CAPEX/Revenue increased on 4.4 pp from 2.9% in 2012 to 7.3% in 2015. Average CAPEX/Revenue for the last three years was 7.4%.To maintain this fast growth Dream International Ltd invested a large share of EBITDA (56.6%) to CAPEX.
Return on investment
The company operates at good ROIC (19.36%) and ROE (15.24%). ROIC increased on 6.0 pp from 13.3% to 19.4% in 2015. ROE increased slightly on 1.9 pp from 13.4% to 15.2% in 2015.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from -1.3x to -1.1x in 2015. Debt dropped on 88.8% in 2015 while cash increased on 4.1% in 2015.
Appendix 1: Peers in Toys/Games/Hobbies
Below you can find Dream International Ltd benchmarking vs. other companies in Toys/Games/Hobbies 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 |
|---|
| Kiu Hung International Holdings Ltd ($381) | -0.8% | 4.5% | -11.9% | 34.8% | |
| Playmates Toys Ltd ($869) | | 726.8% | 346.3% | 30.2% | -28.2% |
| Playmates Holdings Ltd ($635) | | 200.7% | 283.5% | 27.5% | -25.3% |
| Leyou Technologies Holdings Ltd ($1089) | 4.7% | 18.8% | 32.3% | 17.7% | |
| Matrix Holdings Ltd ($1005) | | -0.2% | 17.5% | 12.2% | 10.1% |
| |
|---|
| Median (9 companies) | 1.9% | 4.5% | 17.5% | 12.2% | 7.2% |
|---|
| Dream International Ltd ($1126) | | 24.9% | -0.1% | 21.0% | 10.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Holdings Ltd ($635) | 68.1% | 65.7% | 66.1% | 64.7% | 65.6% |
| Playmates Toys Ltd ($869) | 28.6% | 60.3% | 62.8% | 61.9% | 61.6% |
| Matrix Holdings Ltd ($1005) | 35.2% | 34.3% | 37.1% | 38.4% | 36.9% |
| Kiu Hung International Holdings Ltd ($381) | 20.8% | 30.9% | 29.0% | 32.1% | |
| Kin Yat Holdings Ltd ($638) | 16.4% | 9.9% | 12.8% | 12.6% | 12.4% |
| |
|---|
| Median (8 companies) | 19.6% | 24.3% | 20.9% | 22.4% | 36.9% |
|---|
| Dream International Ltd ($1126) | 24.3% | 25.6% | 29.1% | 22.4% | 23.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Holdings Ltd ($635) | -14.7% | 22.0% | 36.7% | 33.5% | 32.8% |
| Playmates Toys Ltd ($869) | -186.4% | 15.1% | 33.0% | 30.2% | 25.8% |
| Matrix Holdings Ltd ($1005) | 11.0% | 10.2% | 13.2% | 15.0% | 17.4% |
| Kin Yat Holdings Ltd ($638) | 12.3% | 4.8% | 8.4% | 8.8% | 8.6% |
| Kader Holdings Co Ltd ($180) | -6.7% | -4.2% | -3.0% | 5.8% | |
| |
|---|
| Median (9 companies) | 5.1% | 6.6% | 5.6% | 5.8% | 17.4% |
|---|
| Dream International Ltd ($1126) | 10.3% | 13.2% | 14.8% | 9.8% | 12.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Quali-Smart Holdings Ltd ($1348) | 1.7% | 1.5% | 2.2% | 12.7% | 3.0% |
| Kin Yat Holdings Ltd ($638) | 7.9% | 9.8% | 4.6% | 7.5% | 4.8% |
| Green International Holdings Ltd ($2700) | 0.1% | 0.2% | 3.2% | 6.5% | |
| Kader Holdings Co Ltd ($180) | 4.0% | 3.5% | 3.7% | 2.8% | |
| Matrix Holdings Ltd ($1005) | 5.8% | 4.7% | 3.2% | 2.8% | 1.7% |
| |
|---|
| Median (9 companies) | 5.8% | 4.7% | 3.2% | 2.8% | 3.0% |
|---|
| Dream International Ltd ($1126) | 2.6% | 2.9% | 3.8% | 11.2% | 7.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Playmates Toys Ltd ($869) | -48.9% | 30.7% | 121.1% | 73.0% | 36.6% |
| Matrix Holdings Ltd ($1005) | 5.8% | 5.9% | 13.1% | 18.6% | 21.2% |
| Playmates Holdings Ltd ($635) | -1.0% | 2.4% | 12.6% | 12.0% | 7.9% |
| Quali-Smart Holdings Ltd ($1348) | 24.2% | 31.3% | 16.2% | 9.1% | -0.3% |
| Kin Yat Holdings Ltd ($638) | 11.4% | -0.7% | 4.5% | 4.9% | 6.2% |
| |
|---|
| Median (9 companies) | 2.4% | 2.4% | 4.5% | 4.9% | 7.9% |
|---|
| Dream International Ltd ($1126) | 12.4% | 19.3% | 19.4% | 13.3% | 19.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kader Holdings Co Ltd ($180) | | | | 9.6x | |
| Leyou Technologies Holdings Ltd ($1089) | -1.4x | 1.1x | 4.4x | 3.8x | |
| Quali-Smart Holdings Ltd ($1348) | 1.2x | 0.6x | -0.7x | 0.9x | 4.5x |
| Kin Yat Holdings Ltd ($638) | 0.0x | 1.6x | 0.3x | 0.4x | -0.0x |
| Matrix Holdings Ltd ($1005) | 0.5x | 0.6x | 0.0x | -0.2x | -0.6x |
| |
|---|
| Median (7 companies) | 0.5x | 0.6x | -0.2x | 0.4x | -0.6x |
|---|
| Dream International Ltd ($1126) | -1.4x | -1.5x | -1.5x | -1.3x | -1.1x |
