Honworld Group Ltd reports 48.7% CAPEX decline while 19.5% Revenue growth
29/03/2016 • About Honworld Group Ltd (
$2226) • By InTwits
Honworld Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Honworld Group Ltd is a fast growth stock: 2015 revenue growth was 19.5%, 5 year revenue CAGR was 85.6% at 2015 ROIC 16.5%
- Honworld Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.9%. At the same time it's a lot of higher than industry average of 12.9%.
- CAPEX is quite volatile: 174 in 2015, 340 in 2014, 57.1 in 2013, 20.3 in 2012, 27.7 in 2011
- The company has highly profitable business model: ROIC is at 16.5%
- It operates with high leverage: Net Debt/EBITDA is 1.3x 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.
Honworld Group Ltd ($2226) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 109.5 | 337.1 | 530.4 | 668.4 | 798.9 | 19.5% |
| Gross Profit | 46.2 | 192.9 | 313.1 | 386.5 | 450.9 | 16.7% |
| SG&A | 17.3 | 47.0 | 99.8 | 121.8 | 155.3 | 27.6% |
| EBITDA | 31.1 | 149.6 | 223.5 | 281.0 | 342.9 | 22.0% |
| Net Income | 20.2 | 98.4 | 174.2 | 211.6 | 228.5 | 8.0% |
Balance Sheet
|
|---|
| Cash | 10.4 | 2.2 | 44.0 | 216.6 | 186.0 | -14.1% |
| Short Term Debt | 146.3 | 206.4 | 233.0 | 308.8 | 570.3 | 84.7% |
| Long Term Debt | 0.0 | 10.0 | 0.0 | 109.0 | 74.4 | -31.7% |
Cash flow
|
|---|
| Capex | 27.7 | 20.3 | 57.1 | 339.9 | 174.4 | -48.7% |
Ratios
|
|---|
| Revenue growth | 201.7% | 207.9% | 57.3% | 26.0% | 19.5% | |
| EBITDA growth | 198.7% | 381.7% | 49.4% | 25.8% | 22.0% | |
| Gross Margin | 42.2% | 57.2% | 59.0% | 57.8% | 56.4% | -1.4% |
| EBITDA Margin | 28.4% | 44.4% | 42.1% | 42.0% | 42.9% | 0.9% |
| Net Income Margin | 18.5% | 29.2% | 32.8% | 31.7% | 28.6% | -3.1% |
| SG&A, % of revenue | 15.8% | 13.9% | 18.8% | 18.2% | 19.4% | 1.2% |
| CAPEX, % of revenue | 25.3% | 6.0% | 10.8% | 50.8% | 21.8% | -29.0% |
| ROIC | 22.1% | 50.4% | 44.5% | 23.6% | 16.5% | -7.1% |
| ROE | 79.1% | 116.6% | 81.1% | 27.3% | 17.1% | -10.2% |
| Net Debt/EBITDA | 4.4x | 1.4x | 0.8x | 0.7x | 1.3x | 0.6x |
Revenue and profitability
The company's Revenue surged on 19.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.9 pp from 30.7% to 47.6% in 2015.
Gross Margin decreased slightly on 1.4 pp from 57.8% to 56.4% in 2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 18.2% to 19.4% in 2015.
Net Income marign decreased on 3.1 pp from 31.7% to 28.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 21.8% in 2015. The company showed fast CAPEX/Revenue growth of 15.8 pp from 6.0% in 2012 to 21.8% in 2015. For the last three years the average CAPEX/Revenue was 27.8%.The company invested a big chunk of EBITDA (50.9%) to CAPEX to fuel its growth.
Return on investment
The company operates at good ROIC (16.50%) and ROE (17.07%). ROIC decreased on 7.1 pp from 23.6% to 16.5% in 2015. ROE dropped on 10.2 pp from 27.3% to 17.1% in 2015.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.6x from 0.7x to 1.3x in 2015. Debt surged on 54.3% in 2015 while cash dropped on 14.1% in 2015.
Appendix 1: Peers in Food
Below you can find Honworld Group Ltd benchmarking vs. other companies in Food 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 |
|---|
| 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% |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| Lam Soon Hong Kong Ltd ($411) | | 15.1% | 25.2% | 13.8% | 8.1% |
| |
|---|
| Median (32 companies) | 22.5% | 9.8% | 6.4% | 2.7% | -3.7% |
|---|
| Honworld Group Ltd ($2226) | | 207.9% | 57.3% | 26.0% | 19.5% |
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% |
| 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% |
| Shenguan Holdings Group Ltd ($829) | 61.9% | 58.2% | 58.5% | 54.9% | 44.2% |
| |
|---|
| Median (31 companies) | 17.7% | 16.5% | 18.5% | 19.8% | 23.7% |
|---|
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | 56.4% |
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% |
| 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% |
| China Modern Dairy Holdings Ltd ($1117) | 33.9% | 33.5% | 27.0% | 25.3% | 21.1% |
| |
|---|
| Median (31 companies) | 8.0% | 7.9% | 6.5% | 7.4% | 8.0% |
|---|
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | 42.9% |
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% |
| 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% |
| China Modern Dairy Holdings Ltd ($1117) | 58.9% | 50.6% | | 18.7% | 42.4% |
| |
|---|
| Median (39 companies) | 3.9% | 5.1% | 5.3% | 5.1% | 4.9% |
|---|
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | 21.8% |
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% |
| 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% |
| Shenguan Holdings Group Ltd ($829) | 40.6% | 40.0% | 33.2% | 21.4% | 10.0% |
| |
|---|
| Median (32 companies) | 10.4% | 7.6% | 5.9% | 5.5% | 5.6% |
|---|
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | 16.5% |
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) | 0.2x | -0.5x | 0.7x | 1.0x | 1.3x |
|---|
| Honworld Group Ltd ($2226) | 4.4x | 1.4x | 0.8x | 0.7x | 1.3x |
