Tan Chong International Ltd reports 58.9% EBITDA growth and 0.91 pp EBITDA Margin growth from 6.4% to 7.3%
30/03/2016 • About Tan Chong International Ltd (
$693) • By InTwits
Tan Chong International Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tan Chong International Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's a lot of higher than industry average of 4.6%.
- CAPEX is quite volatile: 557 in 2015, 39.3 in 2014, 45.9 in 2013, 18.3 in 2012, 287 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.9%
- It operates with high leverage: Net Debt/EBITDA is 0.8x while industry average is 0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tan Chong International Ltd ($693) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,355 | 6,527 | 9,147 | 10,648 | 14,819 | 39.2% |
| Gross Profit | 1,125 | 1,092 | 1,757 | 2,135 | 2,802 | 31.3% |
| SG&A | | 975 | 1,318 | 859 | 976 | 13.6% |
| EBITDA | 722 | 383 | 891 | 684 | 1,086 | 58.9% |
| Net Income | 599 | 1,078 | 2,058 | 349 | 308 | -11.7% |
Balance Sheet
|
|---|
| Cash | 1,611 | 1,358 | 2,229 | 2,913 | 3,166 | 8.7% |
| Short Term Debt | 1,448 | 1,281 | 2,099 | 2,043 | 2,247 | 10.0% |
| Long Term Debt | 12 | 457 | 104 | 2,103 | 1,807 | -14.1% |
Cash flow
|
|---|
| Capex | 482 | 390 | 696 | 744 | 614 | -17.5% |
Ratios
|
|---|
| Revenue growth | 2.5% | 2.7% | 40.1% | 16.4% | 39.2% | |
| EBITDA growth | 21.7% | -46.9% | 132.6% | -23.3% | 58.9% | |
| Gross Margin | 17.7% | 16.7% | 19.2% | 20.1% | 18.9% | -1.1% |
| EBITDA Margin | 11.4% | 5.9% | 9.7% | 6.4% | 7.3% | 0.9% |
| Net Income Margin | 9.4% | 16.5% | 22.5% | 3.3% | 2.1% | -1.2% |
| SG&A, % of revenue | | 14.9% | 14.4% | 8.1% | 6.6% | -1.5% |
| CAPEX, % of revenue | 7.6% | 6.0% | 7.6% | 7.0% | 4.1% | -2.8% |
| ROIC | 6.0% | 2.1% | 5.7% | 2.6% | 4.9% | 2.3% |
| ROE | 7.7% | 12.4% | 20.4% | 3.1% | 2.6% | -0.5% |
| Net Debt/EBITDA | -0.2x | 1.0x | -0.0x | 1.8x | 0.8x | -1.0x |
Revenue and profitability
Tan Chong International Ltd's Revenue jumped on 39.2% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.91 pp from 6.4% to 7.3% in 2015.
Gross Margin decreased slightly on 1.1 pp from 20.1% to 18.9% in 2015. SG&A as a % of Revenue decreased slightly on 1.5 pp from 8.1% to 6.6% in 2015.
Net Income marign decreased slightly on 1.2 pp from 3.3% to 2.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Tan Chong International Ltd had CAPEX/Revenue of 4.1%. Tan Chong International Ltd showed small CAPEX/Revenue decline of 1.8 pp from 6.0% in 2012 to 4.1% in 2015. For the last three years the average CAPEX/Revenue was 6.2%.To secure this fast growth the company invested a large share of EBITDA (56.5%) to CAPEX.
Return on investment
The company operates at low ROIC (4.90%) and ROE (2.64%). ROIC increased on 2.3 pp from 2.6% to 4.9% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 3.7x. Net Debt / EBITDA dropped on 1.0x from 1.8x to 0.8x in 2015. Debt decreased on 2.2% in 2015 while cash increased on 8.7% in 2015.
Appendix 1: Peers in Distribution/Wholesale
Below we provide Tan Chong International Ltd benchmarking against other companies in Distribution/Wholesale 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 |
|---|
| C Y Foundation Group Ltd ($1182) | | 8.3% | -65.6% | 5.9% | 214.6% |
| Hailiang International Holdings Ltd ($2336) | | 9.7% | -30.8% | -69.1% | 99.7% |
| Forefront Group Ltd ($885) | | | 504.6% | 3,871.0% | 72.0% |
| Yestar International Holdings Co Ltd ($2393) | | -2.2% | 22.8% | 30.5% | 60.3% |
| Goldin Financial Holdings Ltd ($530) | | -39.4% | 63.5% | 60.3% | 42.9% |
| |
|---|
| Median (33 companies) | 24.2% | 3.0% | 0.0% | 0.8% | -2.0% |
|---|
| Tan Chong International Ltd ($693) | | 2.7% | 40.1% | 16.4% | 39.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Yunnan Tin Minerals Group Co Ltd ($263) | 32.6% | 79.6% | 66.3% | | 98.7% |
| Goldin Financial Holdings Ltd ($530) | 67.0% | 75.3% | 71.7% | 74.8% | 73.8% |
| YGM Trading Ltd ($375) | 67.1% | 66.5% | 67.4% | 64.0% | 62.5% |
| Goldlion Holdings Ltd ($533) | 57.3% | 56.4% | 54.1% | 55.7% | 60.0% |
| E.Bon Holdings Ltd ($599) | 36.6% | 40.3% | 37.4% | 35.8% | 39.6% |
| |
|---|
| Median (31 companies) | 15.5% | 17.5% | 17.1% | 18.0% | 22.3% |
|---|
| Tan Chong International Ltd ($693) | 17.7% | 16.7% | 19.2% | 20.1% | 18.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China LNG Group Ltd ($931) | 195.2% | 95.1% | 76.4% | 97.9% | 1,277.8% |
| Goldin Financial Holdings Ltd ($530) | -134.6% | 163.7% | 613.4% | 285.7% | 364.1% |
| China Yunnan Tin Minerals Group Co Ltd ($263) | -649.6% | -1,064.4% | -252.1% | | 62.8% |
| Goldlion Holdings Ltd ($533) | 27.8% | 25.8% | 23.4% | 22.5% | 22.8% |
| GA Holdings Ltd ($8126) | -4.5% | 8.0% | 19.7% | 22.9% | 20.3% |
| |
|---|
| Median (34 companies) | 2.2% | 2.1% | 1.9% | 4.5% | 4.3% |
|---|
| Tan Chong International Ltd ($693) | 11.4% | 5.9% | 9.7% | 6.4% | 7.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SIS International Holdings ($529) | 0.2% | 13.4% | 31.8% | 14.8% | 49.8% |
| Inspur International Ltd ($596) | 0.9% | 8.4% | 12.2% | 33.6% | 25.6% |
| China LNG Group Ltd ($931) | 2,875.2% | 11.1% | 0.3% | 0.6% | 15.6% |
| YGM Trading Ltd ($375) | 2.0% | 1.8% | 2.1% | 3.5% | 14.5% |
| Victory Group Ltd ($1139) | | 0.7% | 0.1% | 6.1% | 12.6% |
| |
|---|
| Median (33 companies) | 1.3% | 1.3% | 1.7% | 1.6% | 1.2% |
|---|
| Tan Chong International Ltd ($693) | 7.6% | 6.0% | 7.6% | 7.0% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China LNG Group Ltd ($931) | 2.2% | 8.4% | 7.4% | 87.0% | 56.2% |
| Powerwell Pacific Holdings Ltd ($8265) | 27.8% | 6.4% | 6.4% | 23.6% | 27.1% |
| Yestar International Holdings Co Ltd ($2393) | 29.4% | 28.8% | 24.1% | 26.2% | 25.4% |
| E.Bon Holdings Ltd ($599) | 4.4% | 7.0% | 7.2% | 3.3% | 16.9% |
| Goldin Financial Holdings Ltd ($530) | -10.1% | 5.9% | 20.6% | 10.4% | 16.0% |
| |
|---|
| Median (35 companies) | 2.2% | 2.7% | 0.9% | 3.2% | 2.6% |
|---|
| Tan Chong International Ltd ($693) | 6.0% | 2.1% | 5.7% | 2.6% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SIS International Holdings ($529) | -62.1x | -1.8x | 7.0x | 7.2x | 16.8x |
| Leeport Holdings Ltd ($387) | 3.1x | | | | 16.1x |
| Takson Holdings Ltd ($918) | | | 11.5x | 11.7x | 15.7x |
| Sheng Yuan Holdings Ltd ($851) | | | | 19.3x | 15.4x |
| Forefront Group Ltd ($885) | | | | -0.0x | 15.3x |
| |
|---|
| Median (25 companies) | -0.4x | -0.3x | -0.8x | -0.1x | -0.2x |
|---|
| Tan Chong International Ltd ($693) | -0.2x | 1.0x | -0.0x | 1.8x | 0.8x |
