China Electronics Corp Holdings Co Ltd CAPEX dropped on 75.6% in 2015 and Revenue decreased on 6.5%
31/03/2016 • About China Electronics Corp Holdings Co Ltd (
$85) • By InTwits
China Electronics Corp Holdings Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Electronics Corp Holdings Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.1%. At the same time it's in pair with industry average of 11.0%.
- CAPEX is quite volatile: 89.3 in 2015, 366 in 2014, 109 in 2013, 20.7 in 2012, 15.0 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 7.6x while industry average is 2.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Electronics Corp Holdings Co Ltd ($85) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 995 | 1,156 | 1,322 | 1,352 | 1,264 | -6.5% |
| Gross Profit | 329 | 452 | 593 | 578 | 550 | -4.9% |
| SG&A | | | 431 | 342 | 373 | 9.2% |
| EBITDA | 142 | 235 | 219 | 338 | 339 | 0.4% |
| Net Income | 115 | 198 | 292 | 170 | 280 | 64.7% |
Balance Sheet
|
|---|
| Cash | 329 | 477 | 792 | 534 | 696 | 30.4% |
| Short Term Debt | 25 | 1 | 442 | 66 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 66 | 4,703 | 3,258 | -30.7% |
Cash flow
|
|---|
| Capex | 15 | 21 | 109 | 366 | 89 | -75.6% |
Ratios
|
|---|
| Revenue growth | 73.2% | 16.1% | 14.4% | 2.3% | -6.5% | |
| EBITDA growth | 86.9% | 65.4% | -7.1% | 54.5% | 0.4% | |
| Gross Margin | 33.1% | 39.1% | 44.9% | 42.8% | 43.5% | 0.7% |
| EBITDA Margin | 14.3% | 20.4% | 16.5% | 25.0% | 26.8% | 1.8% |
| Net Income Margin | 11.5% | 17.1% | 22.1% | 12.6% | 22.2% | 9.6% |
| SG&A, % of revenue | | | 32.6% | 25.3% | 29.5% | 4.3% |
| CAPEX, % of revenue | 1.5% | 1.8% | 8.3% | 27.1% | 7.1% | -20.0% |
| ROIC | 23.2% | 31.0% | 14.8% | 7.7% | 5.4% | -2.3% |
| ROE | 21.2% | 28.0% | 29.3% | 15.0% | 24.3% | 9.2% |
| Net Debt/EBITDA | -2.1x | -2.0x | -1.3x | 12.5x | 7.6x | -5.0x |
Revenue and profitability
China Electronics Corp Holdings Co Ltd's Revenue decreased on 6.5% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.8 pp from 25.0% to 26.8% in 2015.
Gross Margin increased slightly on 0.73 pp from 42.8% to 43.5% in 2015. SG&A as a % of Revenue increased on 4.3 pp from 25.3% to 29.5% in 2015.
Net Income marign increased on 9.6 pp from 12.6% to 22.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.1% in 2015. China Electronics Corp Holdings Co Ltd showed CAPEX/Revenue growth of 5.3 pp from 1.8% in 2012 to 7.1% in 2015. Average CAPEX/Revenue for the last three years was 14.1%.
Return on investment
The company operates at good ROE (24.25%) while ROIC is low (5.42%). ROIC decreased on 2.3 pp from 7.7% to 5.4% in 2015. ROE increased on 9.2 pp from 15.0% to 24.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.6x and Debt / EBITDA is 9.6x. Net Debt / EBITDA dropped on 5.0x from 12.5x to 7.6x in 2015. Debt dropped on 31.7% in 2015 while cash jumped on 30.4% in 2015.
Appendix 1: Peers in Telecommunications
Below we provide China Electronics Corp Holdings Co Ltd benchmarking against other companies in Telecommunications 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 |
|---|
| Hong Kong Television Network Ltd ($1137) | | | 107.4% | -82.2% | 8,010.0% |
| Hanny Holdings Ltd ($275) | | 236.4% | 131.2% | -85.2% | 349.3% |
| CCT Fortis Holdings Ltd ($138) | | -24.1% | -55.3% | -71.3% | 207.1% |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | | -8.5% | -45.9% | -56.2% | 111.6% |
| China Trends Holdings Ltd ($8171) | | 167.0% | -70.2% | -16.7% | 106.0% |
| |
|---|
| Median (53 companies) | 118.6% | 8.9% | 8.3% | 8.4% | 4.3% |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | | 16.1% | 14.4% | 2.3% | -6.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HKBN Ltd ($1310) | | | 84.3% | 86.5% | 86.9% |
| Netel Technology Holdings Ltd ($8256) | 40.8% | 27.9% | 42.1% | 54.9% | 72.3% |
| Great World Co Holdings Ltd ($8003) | 34.2% | -11.0% | 43.0% | 45.5% | 67.9% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | 61.0% |
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% |
| |
|---|
| Median (47 companies) | 27.3% | 21.9% | 24.3% | 25.0% | 22.0% |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | 33.1% | 39.1% | 44.9% | 42.8% | 43.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | 82.4% |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | 78.8% |
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
| HKBN Ltd ($1310) | | | 39.2% | 40.1% | 39.0% |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | 36.0% |
| |
|---|
| Median (53 companies) | 9.9% | 9.0% | 6.4% | 7.3% | 9.2% |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | 14.3% | 20.4% | 16.5% | 25.0% | 26.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | 115.8% |
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | 79.4% |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | 52.8% |
| China Unicom Hong Kong Ltd ($762) | 37.2% | 34.9% | 24.7% | 24.4% | 31.9% |
| China Fiber Optic Network System Group Ltd ($3777) | 24.5% | 4.8% | 16.3% | 13.1% | 31.9% |
| |
|---|
| Median (53 companies) | 3.0% | 2.5% | 3.0% | 3.2% | 2.7% |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | 7.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Coolpad Group Ltd ($2369) | 7.2% | 8.1% | 6.0% | 9.6% | 29.1% |
| SmarTone Telecommunications Holdings Ltd ($315) | 30.2% | 37.2% | 23.1% | 12.8% | 17.7% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | 13.4% |
| |
|---|
| Median (54 companies) | 7.1% | 6.6% | 5.9% | 6.2% | 5.9% |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | 23.2% | 31.0% | 14.8% | 7.7% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | 44.8x |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | 31.7x |
| China Ground Source Energy Industry Group Ltd ($8128) | -0.6x | -1.6x | 3.5x | 14.3x | 11.3x |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | 5.6x |
| Beijing Digital Telecom Co Ltd ($6188) | 2.1x | 2.4x | 3.5x | 2.9x | 4.1x |
| |
|---|
| Median (39 companies) | -0.2x | -0.1x | 0.8x | 0.7x | 0.3x |
|---|
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | 7.6x |
