DaChan Food Asia Ltd reports 152% EBITDA growth and 1.8 pp EBITDA Margin growth from 0.80% to 2.6%
29/03/2016 • About DaChan Food Asia Ltd (
$3999) • By InTwits
DaChan Food Asia Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 2.6% in 2015, 0.8% in 2014, 1.5% in 2013, 2.5% in 2012, 3.7% in 2011
- DaChan Food Asia Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 11.6%.
- CAPEX is quite volatile: 203 in 2015, 123 in 2014, 251 in 2013, 435 in 2012, 501 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.9%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is -2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
DaChan Food Asia Ltd ($3999) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,216 | 11,435 | 11,752 | 11,406 | 8,899 | -22.0% |
| Gross Profit | 856 | 728 | 695 | 647 | 708 | 9.4% |
| SG&A | | 589 | 669 | 684 | 621 | -9.2% |
| EBITDA | 414 | 283 | 181 | 91 | 228 | 151.6% |
| Net Income | 196 | 72 | -9 | -108 | -154 | 41.6% |
Balance Sheet
|
|---|
| Cash | 512 | 610 | 590 | 459 | 530 | 15.4% |
| Short Term Debt | 393 | 258 | 212 | 110 | 320 | 190.6% |
| Long Term Debt | 9 | 381 | 608 | 784 | 708 | -9.7% |
Cash flow
|
|---|
| Capex | 156 | 214 | 219 | 257 | 170 | -33.9% |
Ratios
|
|---|
| Revenue growth | 17.4% | 2.0% | 2.8% | -2.9% | -22.0% | |
| EBITDA growth | 42.8% | -31.5% | -36.1% | -49.9% | 151.6% | |
| Gross Margin | 7.6% | 6.4% | 5.9% | 5.7% | 8.0% | 2.3% |
| EBITDA Margin | 3.7% | 2.5% | 1.5% | 0.8% | 2.6% | 1.8% |
| Net Income Margin | 1.7% | 0.6% | -0.1% | -1.0% | -1.7% | -0.8% |
| SG&A, % of revenue | | 5.2% | 5.7% | 6.0% | 7.0% | 1.0% |
| CAPEX, % of revenue | 1.4% | 1.9% | 1.9% | 2.3% | 1.9% | -0.3% |
| ROIC | 13.2% | 6.3% | 2.0% | -1.0% | 2.9% | 3.9% |
| ROE | 11.9% | 4.2% | -0.5% | -6.6% | -10.0% | -3.5% |
| Net Debt/EBITDA | -0.3x | 0.1x | 1.3x | 4.8x | 2.2x | -2.6x |
Revenue and profitability
DaChan Food Asia Ltd's Revenue dropped on 22.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.8 pp from 0.80% to 2.6% in 2015.
Gross Margin increased on 2.3 pp from 5.7% to 8.0% in 2015. SG&A as a % of Revenue increased slightly on 0.98 pp from 6.0% to 7.0% in 2015.
Net Income marign decreased slightly on 0.77 pp from -0.95% to -1.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 DaChan Food Asia Ltd had CAPEX/Revenue of 1.9%. The company showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue was 2.0%.The company invested a big chunk of EBITDA (74.6%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (2.93%) and negative ROE (-10.04%). ROIC increased on 3.9 pp from -1.0% to 2.9% in 2015. ROE decreased on 3.5 pp from -6.6% to -10.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 4.5x. Net Debt / EBITDA dropped on 2.6x from 4.8x to 2.2x in 2015. Debt jumped on 15.0% in 2015 while cash surged on 15.4% in 2015.
Appendix 1: Peers in Food
Below we provide DaChan Food Asia Ltd benchmarking against other companies in Food 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 |
|---|
| Imperial Pacific International Holdings Ltd ($1076) | | -27.6% | -18.5% | 2.7% | 70.3% |
| Chinese Food and Beverage Group ($8272) | | 207.7% | 149.2% | 26.8% | 31.6% |
| Huisheng International Holdings Ltd ($1340) | | -2.4% | 5.6% | 8.7% | 25.9% |
| Honworld Group Ltd ($2226) | | 207.9% | 57.3% | 26.0% | 19.5% |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| |
|---|
| Median (32 companies) | 22.5% | 10.1% | 8.4% | 4.7% | -2.9% |
|---|
| DaChan Food Asia Ltd ($3999) | | 2.0% | 2.8% | -2.9% | -22.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hung Fook Tong Group Holdings Ltd ($1446) | 57.0% | 60.7% | 60.0% | 58.7% | 60.7% |
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | 56.4% |
| Yashili International Holdings Ltd ($1230) | 52.0% | 53.7% | 53.5% | 51.2% | 50.8% |
| Natural Dairy NZ Holdings Ltd ($462) | 16.3% | -13.7% | 27.5% | 48.8% | 49.6% |
| Christine International Holdings Ltd ($1210) | 51.3% | 50.2% | 49.7% | 47.2% | 47.2% |
| |
|---|
| Median (31 companies) | 18.1% | 16.8% | 19.7% | 20.0% | 23.9% |
|---|
| DaChan Food Asia Ltd ($3999) | 7.6% | 6.4% | 5.9% | 5.7% | 8.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenguan Holdings Group Ltd ($829) | 57.2% | 58.7% | 59.2% | 54.5% | 43.6% |
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | 42.9% |
| China Huishan Dairy Holdings Co Ltd ($6863) | 109.2% | 45.1% | 47.9% | 47.1% | 37.2% |
| YuanShengTai Dairy Farm Ltd ($1431) | 147.8% | 40.3% | 48.4% | 47.1% | 35.4% |
| Want Want China Holdings Ltd ($151) | 20.1% | 23.8% | 25.8% | 23.8% | 25.2% |
| |
|---|
| Median (31 companies) | 8.5% | 8.0% | 6.7% | 7.6% | 8.5% |
|---|
| DaChan Food Asia Ltd ($3999) | 3.7% | 2.5% | 1.5% | 0.8% | 2.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 453.6% | 98.2% | 29.8% | 132.0% | 109.8% |
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | 21.8% |
| YuanShengTai Dairy Farm Ltd ($1431) | 182.5% | 26.1% | 18.3% | 43.4% | 30.1% |
| Yashili International Holdings Ltd ($1230) | 3.6% | 8.2% | 7.1% | 20.1% | 12.5% |
| Vedan International Holdings Ltd ($2317) | 2.8% | 2.5% | 2.4% | 18.8% | 4.0% |
| |
|---|
| Median (39 companies) | 4.9% | 5.9% | 5.6% | 5.1% | 5.6% |
|---|
| DaChan Food Asia Ltd ($3999) | 1.4% | 1.9% | 1.9% | 2.3% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Want Want China Holdings Ltd ($151) | 24.9% | 27.9% | 29.4% | 22.8% | 21.8% |
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | 16.5% |
| WH Group Ltd ($288) | | 20.3% | 3.6% | 15.0% | 13.3% |
| Tenwow International Holdings Ltd ($1219) | 20.3% | 19.7% | 15.7% | 12.8% | 11.9% |
| Asia Cassava Resources Holdings Ltd ($841) | 13.8% | 4.2% | 5.9% | 13.6% | 11.6% |
| |
|---|
| Median (32 companies) | 10.4% | 8.0% | 6.5% | 5.6% | 5.7% |
|---|
| DaChan Food Asia Ltd ($3999) | 13.2% | 6.3% | 2.0% | -1.0% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Beijing Jingkelong Co Ltd ($814) | 3.4x | 5.0x | 4.8x | 5.3x | 9.3x |
| China Kangda Food Co Ltd ($834) | 2.1x | 2.8x | 2.5x | 2.3x | 5.4x |
| China Modern Dairy Holdings Ltd ($1117) | 1.3x | 3.7x | 5.2x | 4.1x | 5.3x |
| Asia Cassava Resources Holdings Ltd ($841) | 0.6x | 4.0x | 5.6x | -0.6x | 4.7x |
| China Huishan Dairy Holdings Co Ltd ($6863) | 5.6x | 3.3x | 1.8x | 0.8x | 3.7x |
| |
|---|
| Median (26 companies) | 0.4x | -0.5x | 0.7x | 0.7x | 1.2x |
|---|
| DaChan Food Asia Ltd ($3999) | -0.3x | 0.1x | 1.3x | 4.8x | 2.2x |
