Cheung Wo International Holdings Ltd reports 2,675 pp EBITDA Margin decline from 105% to -2,571% in 2015 and 10.0% Revenue decline
29/03/2016 • About Cheung Wo International Holdings Ltd (
$9) • By InTwits
Cheung Wo International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cheung Wo International Holdings Ltd is a company in decline: 2015 revenue growth was -10.0%, 5 years revenue CAGR was -28.0%
- The company operates at negative EBITDA Margin: -2,570.6%
- Cheung Wo International 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 -402.7% for the sames years0
- Cheung Wo International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 237.1%. At the same time it's a lot of higher than industry average of 70.6%.
- CAPEX is quite volatile: 49.4 in 2015, 104 in 2014, 125 in 2013, 31.4 in 2012, 24.4 in 2011
- The company has unprofitable business model: ROIC is at -30.6%
- It operates with high leverage: Net Debt/EBITDA is -0.8x while industry average is -3.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cheung Wo International Holdings Ltd ($9) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 54.510 | 34.813 | 26.801 | 27.127 | 24.422 | -10.0% |
| Gross Profit | 26.933 | -6.096 | 19.139 | 21.078 | 18.998 | -9.9% |
| SG&A | | | | 41.233 | 47.058 | 14.1% |
| EBITDA | 4.240 | -21.822 | -58.228 | 28.361 | -627.782 | -2,313.5% |
| Net Income | 54.798 | -17.422 | -65.576 | -178.032 | -643.538 | 261.5% |
Balance Sheet
|
|---|
| Cash | 48.133 | 66.089 | 163.161 | 61.696 | 57.175 | -7.3% |
| Short Term Debt | 124.395 | 48.040 | 59.350 | 351.640 | 391.908 | 11.5% |
| Long Term Debt | 43.702 | 181.215 | 315.751 | 250.676 | 293.874 | 17.2% |
Cash flow
|
|---|
| Capex | 24.360 | 31.419 | 124.679 | 103.944 | 49.421 | -52.5% |
Ratios
|
|---|
| Revenue growth | -56.9% | -36.1% | -23.0% | 1.2% | -10.0% | |
| EBITDA growth | -77.6% | -614.7% | 166.8% | -148.7% | -2,313.5% | |
| Gross Margin | 49.4% | -17.5% | 71.4% | 77.7% | 77.8% | 0.1% |
| EBITDA Margin | 7.8% | -62.7% | -217.3% | 104.5% | -2,570.6% | -2,675.1% |
| Net Income Margin | 100.5% | -50.0% | -244.7% | -656.3% | -2,635.1% | -1,978.8% |
| SG&A, % of revenue | | | | 152.0% | 192.7% | 40.7% |
| CAPEX, % of revenue | 44.7% | 90.3% | 465.2% | 383.2% | 202.4% | -180.8% |
| ROIC | 0.1% | -1.6% | -3.2% | 1.1% | -30.6% | -31.7% |
| ROE | 7.1% | -1.5% | -4.8% | -12.0% | -53.1% | -41.1% |
| Net Debt/EBITDA | 28.3x | | | 19.1x | | -19.1x |
Revenue and profitability
Cheung Wo International Holdings Ltd's Revenue decreased on 10.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 61.9 pp from -461% to -399% in FY2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue jumped on 40.7 pp from 152% to 193% in 2015.
Net Income marign dropped on 1,979 pp from -656% to -2,635% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Cheung Wo International Holdings Ltd had CAPEX/Revenue of 202%. CAPEX/Revenue surged on 112 pp from 90.3% in 2012 to 202% in 2015. It's average CAPEX/Revenue for the last three years was 350%.
Return on investment
The company operates at negative ROIC (-30.57%) and ROE (-53.11%). ROIC dropped on 31.7 pp from 1.1% to -30.6% in 2015. ROE dropped on 41.1 pp from -12.0% to -53.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is . Net Debt / EBITDA dropped on 19.1x from 19.1x to in 2015. Debt surged on 13.9% in 2015 while cash decreased on 7.3% in 2015.
Appendix 1: Peers in Entertainment
Below you can find Cheung Wo International Holdings Ltd benchmarking vs. other companies in Entertainment 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 |
|---|
| China 3D Digital Entertainment Ltd ($8078) | | -67.2% | 295.2% | 185.2% | -44.3% |
| Universe International Holdings Ltd ($1046) | | -42.2% | 4.3% | 159.4% | 46.3% |
| China Vanguard Group Ltd ($8156) | | -7.0% | -62.7% | 145.0% | 29.2% |
| China LotSynergy Holdings Ltd ($1371) | | 15.0% | 22.5% | 39.1% | -37.8% |
| Nan Hai Corp Ltd ($680) | 20.7% | -16.3% | 18.7% | 36.0% | |
| |
|---|
| Median (26 companies) | 20.7% | 2.9% | 14.1% | -1.8% | -5.8% |
|---|
| Cheung Wo International Holdings Ltd ($9) | | -36.1% | -23.0% | 1.2% | -10.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amax International Holdings Ltd ($959) | | | 92.1% | 98.6% | 96.6% |
| China Vanguard Group Ltd ($8156) | 65.0% | 63.8% | 88.2% | 93.8% | 95.2% |
| REXLot Holdings Ltd ($555) | 63.0% | 70.2% | 73.1% | 73.4% | |
| China LotSynergy Holdings Ltd ($1371) | 81.7% | 79.5% | 73.1% | 70.1% | 55.8% |
| Nan Hai Corp Ltd ($680) | 62.2% | 62.2% | 65.3% | 65.8% | |
| |
|---|
| Median (22 companies) | 43.8% | 44.9% | 48.7% | 43.5% | 42.2% |
|---|
| Cheung Wo International Holdings Ltd ($9) | 49.4% | -17.5% | 71.4% | 77.7% | 77.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Group Ltd ($70) | 101.1% | 98.6% | 98.6% | 86.6% | 99.0% |
| Universe International Holdings Ltd ($1046) | 62.2% | 36.6% | 44.6% | 74.6% | 73.6% |
| China LotSynergy Holdings Ltd ($1371) | 61.2% | 53.3% | 60.9% | 56.1% | -31.0% |
| Haichang Holdings Ltd ($2255) | 46.9% | 55.0% | 44.5% | 46.3% | 56.6% |
| SMI Holdings Group Ltd ($198) | 41.3% | 19.2% | 35.4% | 34.5% | |
| |
|---|
| Median (26 companies) | 14.2% | 22.1% | 19.7% | 14.9% | -10.4% |
|---|
| Cheung Wo International Holdings Ltd ($9) | 7.8% | -62.7% | -217.3% | 104.5% | -2,570.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Arts Entertainment and Culture Group Ltd ($8228) | 536.1% | 1,237.1% | 771.1% | 799.0% | 508.9% |
| Alibaba Pictures Group Ltd ($1060) | 0.5% | 16.1% | 17.2% | 34.8% | |
| Mei Ah Entertainment Group Ltd ($391) | 2.5% | 6.8% | 3.6% | 25.4% | 1.8% |
| Nan Hai Corp Ltd ($680) | 29.1% | 19.2% | 35.2% | 18.2% | |
| Amax International Holdings Ltd ($959) | 18.7% | 10.4% | 2.7% | 17.2% | 59.8% |
| |
|---|
| Median (26 companies) | 7.2% | 8.7% | 6.6% | 4.7% | 8.3% |
|---|
| Cheung Wo International Holdings Ltd ($9) | 44.7% | 90.3% | 465.2% | 383.2% | 202.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dynam Japan Holdings Co Ltd ($6889) | 22.5% | 23.8% | 25.4% | 21.8% | 10.5% |
| Neptune Group Ltd ($70) | 22.0% | 22.8% | 23.8% | 21.1% | 18.1% |
| China LotSynergy Holdings Ltd ($1371) | 18.0% | 15.5% | 16.9% | 14.8% | -9.8% |
| Pegasus Entertainment Holdings Ltd ($1326) | 94.5% | 82.1% | 18.5% | 10.3% | -21.3% |
| SMI Holdings Group Ltd ($198) | 5.8% | 1.3% | 8.4% | 9.9% | |
| |
|---|
| Median (27 companies) | 2.8% | -1.1% | 3.7% | -0.9% | -2.8% |
|---|
| Cheung Wo International Holdings Ltd ($9) | 0.1% | -1.6% | -3.2% | 1.1% | -30.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nan Hai Corp Ltd ($680) | 25.2x | 80.8x | 3.5x | 20.8x | |
| REXLot Holdings Ltd ($555) | 0.4x | -0.0x | -0.2x | 7.2x | |
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | -0.8x | 1.1x | 4.2x | 2.7x | |
| China 3D Digital Entertainment Ltd ($8078) | -11.9x | | -0.5x | 2.3x | |
| SMI Holdings Group Ltd ($198) | 0.3x | 2.0x | 1.6x | 2.1x | |
| |
|---|
| Median (19 companies) | -0.3x | -0.1x | -0.6x | -0.3x | -0.7x |
|---|
| Cheung Wo International Holdings Ltd ($9) | 28.3x | | | 19.1x | |
