Hisense Kelon Electrical Holdings Co Ltd EBITDA dropped on 61.7% in 2015 and Revenue dropped on 11.6%
29/03/2016 • About Hisense Kelon Electrical Holdings Co Ltd (
$921) • By InTwits
Hisense Kelon Electrical Holdings Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hisense Kelon Electrical Holdings Co Ltd doesn't have a profitable business model yet: 2015 ROIC is -3.9%
- EBITDA Margin is quite volatile: 1.4% in 2015, 3.3% in 2014, 4.8% in 2013, 4.2% in 2012, 2.0% in 2011
- Hisense Kelon Electrical Holdings Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 5.9%.
- CAPEX is quite volatile: 450 in 2015, 766 in 2014, 566 in 2013, 163 in 2012, 230 in 2011
- The company has unprofitable business model: ROIC is at -3.9%
- It operates with high leverage: Net Debt/EBITDA is 6.4x while industry average is 0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hisense Kelon Electrical Holdings Co Ltd ($921) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 18,426 | 18,854 | 24,260 | 26,436 | 23,374 | -11.6% |
| Gross Profit | 3,223 | 3,820 | 5,221 | 5,651 | 4,934 | -12.7% |
| SG&A | 3,184 | 3,373 | 4,493 | 5,246 | 5,214 | -0.6% |
| EBITDA | 373 | 796 | 1,170 | 871 | 334 | -61.7% |
| Net Income | 227 | 718 | 1,239 | 672 | 580 | -13.7% |
Balance Sheet
|
|---|
| Cash | 399 | 516 | 474 | 871 | 1,014 | 16.5% |
| Short Term Debt | 1,618 | 1,463 | 1,583 | 1,782 | 3,155 | 77.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 230 | 163 | 566 | 766 | 450 | -41.3% |
Ratios
|
|---|
| Revenue growth | 16.5% | 2.3% | 28.7% | 9.0% | -11.6% | |
| EBITDA growth | -39.9% | 113.6% | 46.9% | -25.5% | -61.7% | |
| Gross Margin | 17.5% | 20.3% | 21.5% | 21.4% | 21.1% | -0.3% |
| EBITDA Margin | 2.0% | 4.2% | 4.8% | 3.3% | 1.4% | -1.9% |
| Net Income Margin | 1.2% | 3.8% | 5.1% | 2.5% | 2.5% | -0.1% |
| SG&A, % of revenue | 17.3% | 17.9% | 18.5% | 19.8% | 22.3% | 2.5% |
| CAPEX, % of revenue | 1.2% | 0.9% | 2.3% | 2.9% | 1.9% | -1.0% |
| ROIC | 0.5% | 13.2% | 19.5% | 6.9% | -3.9% | -10.8% |
| ROE | 34.8% | 62.0% | 58.2% | 21.7% | 15.5% | -6.2% |
| Net Debt/EBITDA | 3.3x | 1.2x | 0.9x | 1.0x | 6.4x | 5.4x |
Revenue and profitability
Hisense Kelon Electrical Holdings Co Ltd's Revenue dropped on 11.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.86 pp from 1.7% to 2.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased on 2.5 pp from 19.8% to 22.3% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Hisense Kelon Electrical Holdings Co Ltd had CAPEX/Revenue of 1.9%. Hisense Kelon Electrical Holdings Co Ltd's CAPEX/Revenue increased slightly on 1.1 pp from 0.87% in 2012 to 1.9% in 2015. For the last three years the average CAPEX/Revenue was 2.4%.Hisense Kelon Electrical Holdings Co Ltd has spent a lot to CAPEX (135% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-3.91%) and low but positive ROE (15.47%). ROIC dropped on 10.8 pp from 6.9% to -3.9% in 2015. ROE decreased on 6.2 pp from 21.7% to 15.5% in 2015.
Leverage (Debt)
Debt level is 6.4x Net Debt / EBITDA and 9.4x Debt / EBITDA. Net Debt / EBITDA jumped on 5.4x from 1.0x to 6.4x in 2015. Debt surged on 77.0% in 2015 while cash jumped on 16.5% in 2015.
Appendix 1: Peers in Home Furnishings
Below you can find Hisense Kelon Electrical Holdings Co Ltd benchmarking vs. other companies in Home Furnishings 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 |
|---|
| Jiu Rong Holdings Ltd ($2358) | | | 136.9% | 438.7% | |
| See Corp Ltd ($491) | | 13.7% | -31.9% | 134.1% | 126.9% |
| BEP International Holdings Ltd ($2326) | | 44.7% | -41.5% | 46.2% | 187.9% |
| Aupu Group Holding Co Ltd ($477) | | 5.7% | 9.0% | 26.4% | 18.5% |
| Alco Holdings Ltd ($328) | | -10.2% | -32.6% | 22.8% | 11.8% |
| |
|---|
| Median (26 companies) | 10.1% | -0.2% | 5.4% | 1.1% | 1.5% |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | | 2.3% | 28.7% | 9.0% | -11.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aupu Group Holding Co Ltd ($477) | 47.1% | 48.6% | 45.0% | 47.8% | 48.7% |
| South East Group Ltd ($726) | 36.2% | 25.5% | 51.6% | 38.8% | 82.4% |
| Grande Holdings Ltd/The ($186) | 19.9% | 23.7% | 25.4% | 29.0% | |
| Samson Holding Ltd ($531) | 24.9% | 25.6% | 25.4% | 27.3% | 27.3% |
| Gold Peak Industries Holding Ltd ($40) | 26.8% | 25.8% | 23.6% | 24.9% | 25.6% |
| |
|---|
| Median (26 companies) | 16.4% | 17.3% | 16.8% | 15.9% | 15.9% |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 17.5% | 20.3% | 21.5% | 21.4% | 21.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| See Corp Ltd ($491) | -58.7% | -38.4% | -59.5% | 32.0% | -35.6% |
| Aupu Group Holding Co Ltd ($477) | 18.1% | 15.3% | 17.6% | 30.1% | 27.0% |
| Welling Holding Ltd ($382) | 8.6% | 11.9% | 12.8% | 10.8% | 8.6% |
| Hing Lee HK Holdings Ltd ($396) | 9.3% | -3.0% | 4.3% | 9.4% | 8.2% |
| Samson Holding Ltd ($531) | 6.2% | 7.5% | 6.6% | 9.4% | 5.1% |
| |
|---|
| Median (26 companies) | 6.0% | 5.5% | 4.5% | 4.6% | 5.1% |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 2.0% | 4.2% | 4.8% | 3.3% | 1.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royale Furniture Holdings Ltd ($1198) | 35.8% | | 14.1% | 16.5% | |
| Sunrise China Technology Group Ltd ($8226) | 7.9% | 126.4% | 69.3% | 7.4% | 14.1% |
| Aupu Group Holding Co Ltd ($477) | 1.9% | 1.5% | 6.3% | 5.3% | 5.7% |
| Alco Holdings Ltd ($328) | 5.1% | 0.8% | 1.4% | 5.2% | 1.3% |
| Skyworth Digital Holdings Ltd ($751) | 2.2% | 3.0% | 2.9% | 4.9% | 2.9% |
| |
|---|
| Median (26 companies) | 1.8% | 1.5% | 1.9% | 2.7% | 2.5% |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 1.2% | 0.9% | 2.3% | 2.9% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mastercraft International Holdings Ltd ($8146) | 76.2% | 54.4% | 38.6% | 36.4% | |
| Aupu Group Holding Co Ltd ($477) | 18.0% | 14.8% | 17.0% | 32.2% | 32.2% |
| Haier Electronics Group Co Ltd ($1169) | 45.3% | 37.5% | 32.8% | 20.8% | 5.9% |
| Welling Holding Ltd ($382) | 29.4% | 23.5% | 24.3% | 18.7% | 10.7% |
| Tonly Electronics Holdings Ltd ($1249) | 7.0% | 4.2% | 7.1% | 15.9% | 11.7% |
| |
|---|
| Median (26 companies) | 7.0% | 3.7% | 4.4% | 3.9% | 4.5% |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 0.5% | 13.2% | 19.5% | 6.9% | -3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kasen International Holdings Ltd ($496) | 9.6x | 2.2x | 3.7x | 44.9x | |
| Chigo Holding Ltd ($449) | 27.0x | 12.3x | 11.8x | 14.5x | |
| Gold Peak Industries Holding Ltd ($40) | 5.6x | 10.2x | 3.4x | 3.6x | 2.8x |
| Skyworth Digital Holdings Ltd ($751) | 1.1x | 1.2x | 1.5x | 1.2x | -0.2x |
| TCL Multimedia Technology Holdings Ltd ($1070) | -0.0x | -0.3x | -2.3x | 0.7x | 0.5x |
| |
|---|
| Median (19 companies) | 0.0x | -0.3x | -1.1x | -1.9x | -2.2x |
|---|
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 3.3x | 1.2x | 0.9x | 1.0x | 6.4x |
