Kam Hing International Holdings Ltd reports 15.0% CAPEX growth and 4.2% Revenue growth
24/03/2016 • About Kam Hing International Holdings Ltd (
$2307) • By InTwits
Kam Hing International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kam Hing International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.5%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 456 in 2015, 1,184 in 2014, 1,332 in 2013, 368 in 2012, 973 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.9%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kam Hing International Holdings Ltd ($2307) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,065 | 4,100 | 3,923 | 3,986 | 4,153 | 4.2% |
| Gross Profit | 589 | 669 | 650 | 573 | 638 | 11.3% |
| SG&A | | 522 | 473 | 424 | 474 | 11.8% |
| EBITDA | 390 | 387 | 455 | 470 | 508 | 8.2% |
| Net Income | 115 | 101 | 92 | 81 | 58 | -28.1% |
Balance Sheet
|
|---|
| Cash | 553 | 495 | 555 | 487 | 531 | 9.0% |
| Short Term Debt | 492 | 890 | 576 | 952 | 705 | -25.9% |
| Long Term Debt | 753 | 563 | 1,138 | 828 | 1,149 | 38.8% |
Cash flow
|
|---|
| Capex | 222 | 436 | 413 | 301 | 346 | 15.0% |
Ratios
|
|---|
| Revenue growth | 24.4% | 0.9% | -4.3% | 1.6% | 4.2% | |
| EBITDA growth | 16.4% | -0.6% | 17.7% | 3.2% | 8.2% | |
| Gross Margin | 14.5% | 16.3% | 16.6% | 14.4% | 15.4% | 1.0% |
| EBITDA Margin | 9.6% | 9.4% | 11.6% | 11.8% | 12.2% | 0.5% |
| Net Income Margin | 2.8% | 2.5% | 2.3% | 2.0% | 1.4% | -0.6% |
| SG&A, % of revenue | | 12.7% | 12.1% | 10.6% | 11.4% | 0.8% |
| CAPEX, % of revenue | 5.5% | 10.6% | 10.5% | 7.6% | 8.3% | 0.8% |
| ROIC | 6.0% | 4.7% | 5.4% | 4.4% | 4.9% | 0.5% |
| ROE | 6.6% | 5.4% | 4.7% | 4.1% | 2.9% | -1.2% |
| Net Debt/EBITDA | 1.8x | 2.5x | 2.5x | 2.8x | 2.6x | -0.1x |
Revenue and profitability
Kam Hing International Holdings Ltd's Revenue increased on 4.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 11.2% to 12.4% in 2015.
Gross Margin increased slightly on 0.98 pp from 14.4% to 15.4% in 2015. SG&A as a % of Revenue increased slightly on 0.78 pp from 10.6% to 11.4% in 2015.
Net Income marign decreased slightly on 0.63 pp from 2.0% to 1.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Kam Hing International Holdings Ltd's CAPEX/Revenue was 8.3% in 2015. CAPEX/Revenue decreased on 2.3 pp from 10.6% in 2012 to 8.3% in 2015. Average CAPEX/Revenue for the last three years was 8.8%.The company maintained rich investment policy and has spent a big chunk of EBITDA (68.1%) to CAPEX.
Return on investment
The company operates at low ROIC (4.86%) and ROE (2.90%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.2 pp from 4.1% to 2.9% in 2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 3.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 2.8x to 2.6x in 2015. Debt increased on 4.2% in 2015 while cash increased on 9.0% in 2015.
Appendix 1: Peers in Textiles
Below you can find Kam Hing International Holdings Ltd benchmarking vs. other companies in Textiles 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 |
|---|
| Victory City International Holdings Ltd ($539) | | -5.2% | 6.5% | 31.5% | -4.4% |
| Guangdong Tannery Ltd ($1058) | | 6.1% | -4.5% | 29.0% | -14.9% |
| Kingdom Holding Co Ltd ($528) | | 1.1% | 6.0% | 20.0% | 12.2% |
| Pacific Textiles Holdings Ltd ($1382) | | -10.6% | 3.6% | 11.6% | -7.0% |
| Easyknit Enterprises Holdings Ltd ($616) | | 9.6% | 10.2% | 7.3% | 22.3% |
| |
|---|
| Median (20 companies) | 17.9% | -2.6% | -4.2% | -10.1% | -4.4% |
|---|
| Kam Hing International Holdings Ltd ($2307) | | 0.9% | -4.3% | 1.6% | 4.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TAI Ping Carpet International Ltd ($146) | 40.4% | 41.0% | 45.4% | 46.7% | 46.6% |
| Ping Shan Tea Group Ltd ($364) | 15.3% | 11.2% | 20.8% | 42.9% | |
| Texwinca Holdings Ltd ($321) | 33.7% | 29.6% | 30.9% | 33.3% | 34.1% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 30.3% | 31.1% | 32.5% | 32.5% | 28.3% |
| Easyknit Enterprises Holdings Ltd ($616) | 14.6% | 22.3% | 26.3% | 29.6% | 25.9% |
| |
|---|
| Median (20 companies) | 16.7% | 17.2% | 15.2% | 14.9% | 22.2% |
|---|
| Kam Hing International Holdings Ltd ($2307) | 14.5% | 16.3% | 16.6% | 14.4% | 15.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ping Shan Tea Group Ltd ($364) | 14.9% | 11.2% | | 39.3% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 26.2% | 28.1% | 28.7% | 30.2% | 23.4% |
| Kingdom Holding Co Ltd ($528) | 29.3% | 26.3% | 25.3% | 24.8% | 23.0% |
| Easyknit Enterprises Holdings Ltd ($616) | 10.4% | 18.4% | 21.3% | 21.4% | 13.2% |
| Weiqiao Textile Co ($2698) | 10.2% | 17.5% | 20.2% | 21.4% | 30.8% |
| |
|---|
| Median (20 companies) | 13.9% | 13.1% | 9.6% | 11.7% | 11.7% |
|---|
| Kam Hing International Holdings Ltd ($2307) | 9.6% | 9.4% | 11.6% | 11.8% | 12.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hua Lien International Holding Co Ltd ($969) | 0.0% | 19.7% | 40.5% | 79.6% | |
| Ping Shan Tea Group Ltd ($364) | 18.1% | 32.0% | | 14.0% | |
| Kingdom Holding Co Ltd ($528) | 6.2% | 8.4% | 18.8% | 10.9% | 5.6% |
| Victory City International Holdings Ltd ($539) | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% |
| Silverman Holdings Ltd ($1616) | 8.7% | 6.5% | 18.0% | 8.4% | |
| |
|---|
| Median (20 companies) | 2.5% | 2.6% | 1.7% | 3.7% | 3.4% |
|---|
| Kam Hing International Holdings Ltd ($2307) | 5.5% | 10.6% | 10.5% | 7.6% | 8.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Textiles Holdings Ltd ($1382) | 28.8% | 23.7% | 26.4% | 31.6% | 25.9% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 24.2% | 22.3% | 20.1% | 17.6% | 11.0% |
| Easyknit Enterprises Holdings Ltd ($616) | | 22.2% | 21.3% | 16.1% | 7.7% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 7.9% | 6.2% | 13.2% | 15.4% | 19.6% |
| Kingdom Holding Co Ltd ($528) | 16.3% | 13.8% | 12.7% | 13.8% | 12.7% |
| |
|---|
| Median (20 companies) | 7.7% | 5.2% | 4.5% | 3.7% | 7.0% |
|---|
| Kam Hing International Holdings Ltd ($2307) | 6.0% | 4.7% | 5.4% | 4.4% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangdong Tannery Ltd ($1058) | 8.9x | 6.5x | 5.8x | 11.6x | |
| Sijia Group Co ($1863) | -0.1x | 1.6x | 5.3x | 6.4x | |
| China Weaving Materials Holdings Ltd ($3778) | 1.3x | 3.6x | 3.0x | 5.3x | 5.5x |
| Co-Prosperity Holdings Ltd ($707) | 8.3x | 34.8x | | 4.5x | |
| Victory City International Holdings Ltd ($539) | 1.8x | 1.5x | 2.0x | 3.2x | 2.5x |
| |
|---|
| Median (18 companies) | 1.2x | 1.5x | 0.6x | 0.5x | -0.2x |
|---|
| Kam Hing International Holdings Ltd ($2307) | 1.8x | 2.5x | 2.5x | 2.8x | 2.6x |
