Tradelink Electronic Commerce Ltd reports 9.7% Net Income growth while 2.0 pp EBITDA Margin decline from 33.1% to 31.1%
29/03/2016 • About Tradelink Electronic Commerce Ltd (
$536) • By InTwits
Tradelink Electronic Commerce Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 31.1% in 2015 vs. 33.1% in 2014 vs. 42.1% in 2011
- Tradelink Electronic Commerce Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 15.1%.
- CAPEX is quite volatile: 10.8 in 2015, 5.3 in 2014, 15.4 in 2013, 33.2 in 2012, 103 in 2011
- The company has highly profitable business model: ROIC is at 16.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tradelink Electronic Commerce Ltd ($536) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 206.2 | 232.4 | 230.0 | 226.3 | 222.7 | -1.6% |
| EBITDA | 86.8 | 89.7 | 77.7 | 74.9 | 69.2 | -7.6% |
| Net Income | 70.1 | 80.3 | 80.5 | 74.2 | 81.4 | 9.7% |
Balance Sheet
|
|---|
| Cash | 148.0 | 127.3 | 113.8 | 114.0 | 146.2 | 28.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 5.8 | 6.4 | 5.4 | 2.9 | 5.9 | 104.1% |
Ratios
|
|---|
| Revenue growth | -4.6% | 12.7% | -1.0% | -1.6% | -1.6% | |
| EBITDA growth | 1.7% | 3.3% | -13.4% | -3.6% | -7.6% | |
| EBITDA Margin | 42.1% | 38.6% | 33.8% | 33.1% | 31.1% | -2.0% |
| Net Income Margin | 34.0% | 34.5% | 35.0% | 32.8% | 36.6% | 3.8% |
| CAPEX, % of revenue | 2.8% | 2.7% | 2.3% | 1.3% | 2.6% | 1.4% |
| ROIC | 19.5% | 22.4% | 18.2% | 17.4% | 16.7% | -0.7% |
| ROE | 20.7% | 23.0% | 22.0% | 19.8% | 22.1% | 2.3% |
| Net Debt/EBITDA | -1.7x | -1.4x | -1.5x | -1.5x | -2.1x | -0.6x |
Revenue and profitability
Tradelink Electronic Commerce Ltd's Revenue decreased slightly on 1.6% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.0 pp from 33.1% to 31.1% in 2015.
Net Income marign increased on 3.8 pp from 32.8% to 36.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
Tradelink Electronic Commerce Ltd's CAPEX/Revenue was 2.6% in 2015. Tradelink Electronic Commerce Ltd showed almost no change in CAPEX/Revenue from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at high and attractive ROE (22.07%) while ROIC is a bit lower (16.68%). ROIC decreased slightly on 0.71 pp from 17.4% to 16.7% in 2015. ROE increased on 2.3 pp from 19.8% to 22.1% in 2015.
Leverage (Debt)
The company has no debt. Cash surged on 28.2% in 2015.
Appendix 1: Peers in Internet
Below you can find Tradelink Electronic Commerce Ltd benchmarking vs. other companies in Internet 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 Public Procurement Ltd ($1094) | -78.5% | 5,077.0% | -67.5% | 1,258.9% | |
| China Digital Culture Group Ltd ($8175) | 320.4% | -47.9% | 180.8% | 168.8% | |
| GET Holdings Ltd ($8380) | | 13.8% | 2,126.4% | 154.4% | 38.6% |
| Ourgame International Holdings Ltd ($6899) | | 33.7% | 14.8% | 101.3% | 61.8% |
| China Healthcare Holdings Ltd ($673) | | -14.8% | -52.9% | 63.1% | 0.3% |
| |
|---|
| Median (21 companies) | 11.2% | 12.8% | 12.6% | 14.8% | 13.6% |
|---|
| Tradelink Electronic Commerce Ltd ($536) | | 12.7% | -1.0% | -1.6% | -1.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | 73.0% | 86.7% | 83.5% | 86.2% | 82.1% |
| Sino-I Technology Ltd ($250) | 74.2% | 75.3% | 82.7% | 78.8% | |
| AcrossAsia Ltd ($8061) | 78.7% | 70.9% | 73.0% | 72.5% | |
| BAIOO Family Interactive Ltd ($2100) | 61.6% | 68.0% | 76.7% | 68.7% | 61.1% |
| Pacific Online Ltd ($543) | 69.1% | 71.0% | 70.5% | 67.3% | 64.8% |
| |
|---|
| Median (19 companies) | 63.6% | 65.8% | 66.2% | 61.7% | 55.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 61.1% | 64.2% | 71.6% | 71.6% | 72.4% |
| GET Holdings Ltd ($8380) | -182.0% | -237.7% | 56.8% | 66.4% | 28.5% |
| AcrossAsia Ltd ($8061) | 15.4% | 20.8% | 24.2% | 44.7% | |
| Tencent Holdings Ltd ($700) | 48.2% | 38.4% | 34.7% | 42.5% | 43.5% |
| China Digital Culture Group Ltd ($8175) | -12.1% | -66.7% | 22.5% | 40.8% | |
| |
|---|
| Median (22 companies) | 9.3% | 5.1% | 18.6% | 13.8% | 11.1% |
|---|
| Tradelink Electronic Commerce Ltd ($536) | 42.1% | 38.6% | 33.8% | 33.1% | 31.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 14.2% | 7.6% | 10.2% | 62.8% | 12.4% |
| AcrossAsia Ltd ($8061) | 61.2% | 56.6% | 65.9% | 36.3% | |
| China E-Learning Group Ltd ($8055) | 1.3% | 0.0% | 2.7% | 15.3% | |
| Asian Capital Resources Holdings Ltd ($8025) | 0.0% | 0.0% | | 12.2% | 14.0% |
| Capinfo Co Ltd ($1075) | 1.6% | 17.3% | 13.1% | 9.7% | 4.3% |
| |
|---|
| Median (22 companies) | 10.8% | 3.4% | 2.9% | 2.7% | 1.3% |
|---|
| Tradelink Electronic Commerce Ltd ($536) | 2.8% | 2.7% | 2.3% | 1.3% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tencent Holdings Ltd ($700) | 33.4% | 29.5% | 26.7% | 29.1% | 24.3% |
| Pacific Online Ltd ($543) | 41.7% | 37.9% | 36.4% | 28.6% | 21.6% |
| BAIOO Family Interactive Ltd ($2100) | | | | 26.5% | 3.7% |
| GET Holdings Ltd ($8380) | -6.8% | -6.5% | 10.8% | 19.3% | 6.7% |
| Ourgame International Holdings Ltd ($6899) | | 42.8% | 33.3% | 17.5% | 12.7% |
| |
|---|
| Median (22 companies) | -2.4% | -4.4% | 4.0% | -2.6% | 2.1% |
|---|
| Tradelink Electronic Commerce Ltd ($536) | 19.5% | 22.4% | 18.2% | 17.4% | 16.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tai Shing International Holdings Ltd ($8103) | | | | | 82.7x |
| GET Holdings Ltd ($8380) | | | -1.1x | -1.0x | 0.7x |
| Tencent Holdings Ltd ($700) | -0.1x | -0.2x | -0.2x | -0.2x | 0.5x |
| SUNeVision Holdings Ltd ($8008) | -2.7x | -2.2x | -2.0x | -1.5x | -1.2x |
| Pacific Online Ltd ($543) | -1.5x | -1.4x | -1.3x | -1.3x | -1.7x |
| |
|---|
| Median (11 companies) | -1.8x | -1.6x | -1.0x | -1.4x | -2.0x |
|---|
| Tradelink Electronic Commerce Ltd ($536) | -1.7x | -1.4x | -1.5x | -1.5x | -2.1x |
