Launch Tech Co Ltd Net Debt / EBITDA surged on 10.6x from 3.9x to 14.5x in 2015 while EBITDA dropped on 89.5%
30/03/2016 • About Launch Tech Co Ltd (
$2488) • By InTwits
Launch Tech Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Launch Tech Co Ltd doesn't have a profitable business model yet: 2015 ROIC is -5.3%
- EBITDA Margin is quite volatile: 1.5% in 2015, 13.2% in 2014, 13.2% in 2013, 3.0% in 2012, 26.0% in 2011
- Launch Tech Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.9%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: 0 in 2015, 76.3 in 2014, 165 in 2013, 128 in 2012, 104 in 2011
- The company has unprofitable business model: ROIC is at -5.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Launch Tech Co Ltd ($2488) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 784.3 | 605.9 | 673.0 | 728.4 | 693.4 | -4.8% |
| Gross Profit | 307.7 | 166.3 | 226.0 | 245.1 | 265.5 | 8.3% |
| SG&A | | 190.0 | 189.6 | 224.8 | 337.4 | 50.1% |
| EBITDA | 203.6 | 18.3 | 88.7 | 95.9 | 10.1 | -89.5% |
| Net Income | 115.4 | -43.6 | 7.0 | -46.9 | -93.9 | 100.0% |
Balance Sheet
|
|---|
| Cash | 299.3 | 301.2 | 315.3 | 343.8 | 415.5 | 20.8% |
| Short Term Debt | 220.6 | 440.6 | 529.1 | 715.6 | 561.2 | -21.6% |
| Long Term Debt | 1.4 | 0.8 | 0.2 | 2.1 | 1.2 | -43.2% |
Cash flow
|
|---|
| Capex | 103.8 | 128.5 | 164.6 | 76.3 | 0.0 | -100.0% |
Ratios
|
|---|
| Revenue growth | 18.6% | -22.7% | 11.1% | 8.2% | -4.8% | |
| EBITDA growth | 9.3% | -91.0% | 383.8% | 8.1% | -89.5% | |
| Gross Margin | 39.2% | 27.4% | 33.6% | 33.6% | 38.3% | 4.6% |
| EBITDA Margin | 26.0% | 3.0% | 13.2% | 13.2% | 1.5% | -11.7% |
| Net Income Margin | 14.7% | -7.2% | 1.0% | -6.4% | -13.5% | -7.1% |
| SG&A, % of revenue | | 31.4% | 28.2% | 30.9% | 48.7% | 17.8% |
| CAPEX, % of revenue | 13.2% | 21.2% | 24.5% | 10.5% | 0.0% | -10.5% |
| ROIC | 15.1% | -3.2% | 2.2% | 1.6% | -5.3% | -6.9% |
| ROE | 16.2% | -6.3% | 1.1% | -7.8% | -14.7% | -6.8% |
| Net Debt/EBITDA | -0.4x | 7.6x | 2.4x | 3.9x | 14.5x | 10.6x |
Revenue and profitability
The company's Revenue decreased on 4.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.7 pp from 13.2% to 1.5% in 2015.
Gross Margin increased on 4.6 pp from 33.6% to 38.3% in 2015. SG&A as a % of Revenue surged on 17.8 pp from 30.9% to 48.7% in 2015.
Net Income marign decreased on 7.1 pp from -6.4% to -13.5% in 2015.
Return on investment
The company operates at negative ROIC (-5.31%) and ROE (-14.66%). ROIC decreased on 6.9 pp from 1.6% to -5.3% in 2015. ROE decreased on 6.8 pp from -7.8% to -14.7% in 2015.
Leverage (Debt)
Debt level is 14.5x Net Debt / EBITDA and 55.6x Debt / EBITDA. Net Debt / EBITDA surged on 10.6x from 3.9x to 14.5x in 2015. Debt dropped on 21.6% in 2015 while cash jumped on 20.8% in 2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find Launch Tech Co Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| Karrie International Hldgs ($1050) | | -11.6% | 0.1% | -11.3% | 27.4% |
| Sunny Optical Technology Group Co Ltd ($2382) | | 59.5% | 45.9% | 45.0% | 26.9% |
| TK Group Holdings Ltd ($2283) | | 40.2% | 9.3% | 11.8% | 20.0% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | | 1.5% | 22.2% | 43.2% | 11.7% |
| Time Watch Investments Ltd ($2033) | | 28.2% | 25.4% | 25.6% | 10.4% |
| |
|---|
| Median (23 companies) | 26.8% | -1.8% | -0.7% | 6.7% | -5.6% |
|---|
| Launch Tech Co Ltd ($2488) | | -22.7% | 11.1% | 8.2% | -4.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Man Sang International Ltd ($938) | 34.7% | 42.4% | 32.8% | 60.3% | 78.6% |
| Time Watch Investments Ltd ($2033) | 58.5% | 60.2% | 60.6% | 65.0% | 68.1% |
| China Environmental Energy Investment Ltd ($986) | 21.0% | 14.0% | 1.2% | 9.0% | 49.2% |
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | 39.6% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 35.0% | 33.2% | 35.1% | 37.4% | 38.7% |
| |
|---|
| Median (22 companies) | 20.6% | 19.7% | 19.7% | 23.4% | 22.4% |
|---|
| Launch Tech Co Ltd ($2488) | 39.2% | 27.4% | 33.6% | 33.6% | 38.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | 37.6% |
| Man Sang International Ltd ($938) | 18.7% | 24.9% | 15.4% | 37.0% | 33.8% |
| IPE Group Ltd ($929) | 24.9% | 25.6% | 22.5% | 29.5% | 29.1% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 19.5% | 18.4% | 19.8% | 20.6% | 24.2% |
| Time Watch Investments Ltd ($2033) | 16.8% | 17.6% | 16.8% | 19.4% | 20.5% |
| |
|---|
| Median (23 companies) | 10.2% | 8.1% | 8.2% | 9.5% | 7.9% |
|---|
| Launch Tech Co Ltd ($2488) | 26.0% | 3.0% | 13.2% | 13.2% | 1.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Environmental Energy Investment Ltd ($986) | 77.7% | 6.1% | 0.4% | 17.9% | 47.6% |
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | 22.8% |
| China International Marine Containers Group Co Ltd ($2039) | 4.7% | 3.9% | 12.1% | 18.5% | 21.2% |
| IPE Group Ltd ($929) | 7.1% | 6.3% | 13.3% | 12.3% | 13.3% |
| China Aerospace International Holdings Ltd ($31) | 3.9% | 5.1% | 6.3% | 6.6% | 7.9% |
| |
|---|
| Median (23 companies) | 5.0% | 4.7% | 4.2% | 4.2% | 4.3% |
|---|
| Launch Tech Co Ltd ($2488) | 13.2% | 21.2% | 24.5% | 10.5% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Time Watch Investments Ltd ($2033) | 30.5% | 34.5% | 27.1% | 27.8% | 27.9% |
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | 27.6% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 16.9% | 17.7% | 20.0% | 21.1% |
| Sunny Optical Technology Group Co Ltd ($2382) | 12.2% | 19.7% | 17.8% | 16.5% | 19.4% |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | 11.7% |
| |
|---|
| Median (23 companies) | 6.4% | 4.4% | 4.4% | 4.4% | 1.6% |
|---|
| Launch Tech Co Ltd ($2488) | 15.1% | -3.2% | 2.2% | 1.6% | -5.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Continental Holdings Ltd ($513) | 8.3x | | 20.1x | 92.9x | 4,203.6x |
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | 27.3x |
| China International Marine Containers Group Co Ltd ($2039) | 2.8x | 4.0x | 4.7x | 5.8x | 9.8x |
| VS International Group Ltd ($1002) | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x |
| Lee & Man Chemical Co Ltd ($746) | -0.3x | -0.2x | 1.5x | 2.2x | 2.5x |
| |
|---|
| Median (20 companies) | 0.1x | -0.3x | -0.3x | -0.2x | -0.3x |
|---|
| Launch Tech Co Ltd ($2488) | -0.4x | 7.6x | 2.4x | 3.9x | 14.5x |
