China Information Technology Development Ltd CAPEX surged on 9,648% in 2015 and Revenue jumped on 20.3%
31/03/2016 • About China Information Technology Development Ltd (
$8178) • By InTwits
China Information Technology Development Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Information Technology Development Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.4%
- China Information Technology Development Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -22.7%0
- China Information Technology Development Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.6%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 11.3 in 2015, 0.12 in 2014, 0.20 in 2013, 2.3 in 2012, 1.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Information Technology Development Ltd ($8178) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 90.337 | 56.414 | 18.333 | 23.097 | 27.793 | 20.3% |
| Gross Profit | 30.014 | 29.583 | 9.289 | 7.215 | 12.607 | 74.7% |
| SG&A | | 35.173 | 19.450 | 23.559 | 35.304 | 49.9% |
| EBITDA | -20.710 | -6.383 | -17.372 | -10.455 | 5.895 | -156.4% |
| Net Income | -1.284 | -7.986 | -9.066 | 1.049 | -105.462 | -10,153.6% |
Balance Sheet
|
|---|
| Cash | 133.821 | 156.335 | 73.961 | 207.622 | 119.229 | -42.6% |
| Short Term Debt | 81.129 | 10.656 | 1.269 | 0.251 | 0.732 | 191.6% |
| Long Term Debt | 0.000 | 21.312 | 0.000 | 0.469 | 0.205 | -56.3% |
Cash flow
|
|---|
| Capex | 1.516 | 2.331 | 0.204 | 0.116 | 11.308 | 9,648.3% |
Ratios
|
|---|
| Revenue growth | -23.7% | -37.6% | -67.5% | 26.0% | 20.3% | |
| EBITDA growth | 727.7% | -69.2% | 172.2% | -39.8% | -156.4% | |
| Gross Margin | 33.2% | 52.4% | 50.7% | 31.2% | 45.4% | 14.1% |
| EBITDA Margin | -22.9% | -11.3% | -94.8% | -45.3% | 21.2% | 66.5% |
| Net Income Margin | -1.4% | -14.2% | -49.5% | 4.5% | -379.5% | -384.0% |
| SG&A, % of revenue | | 62.3% | 106.1% | 102.0% | 127.0% | 25.0% |
| CAPEX, % of revenue | 1.7% | 4.1% | 1.1% | 0.5% | 40.7% | 40.2% |
| ROIC | -11.2% | -4.4% | -11.1% | -5.1% | 1.4% | 6.5% |
| ROE | -1.4% | -7.1% | -7.1% | 0.5% | -31.8% | -32.3% |
| Net Debt/EBITDA | | | | | -20.1x | -20.1x |
Revenue and profitability
The company's Revenue jumped on 20.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 2.0 pp from -16.6% to -14.6% in FY2015.
Gross Margin jumped on 14.1 pp from 31.2% to 45.4% in 2015. SG&A as a % of Revenue jumped on 25.0 pp from 102% to 127% in 2015.
Net Income marign dropped on 384 pp from 4.5% to -379% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 40.7% in 2015. CAPEX/Revenue surged on 36.6 pp from 4.1% in 2012 to 40.7% in 2015. Average CAPEX/Revenue for the last three years was 14.1%.China Information Technology Development Ltd has spent a lot to CAPEX (192% of EBITDA) to secure its growth.
Return on investment
The company operates at low but positive ROIC (1.43%) and negative ROE (-31.76%). ROIC increased on 6.5 pp from -5.1% to 1.4% in 2015. ROE dropped on 32.3 pp from 0.49% to -31.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -20.1x and Debt / EBITDA is 0.2x. Net Debt / EBITDA dropped20.1x from to -20.1x in 2015. Debt jumped on 30.1% in 2015 while cash dropped on 42.6% in 2015.
Appendix 1: Peers in Software
Below you can find China Information Technology Development Ltd benchmarking vs. other companies in Software 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 |
|---|
| Yunbo Digital Synergy Group Ltd ($8050) | | -84.6% | 241.6% | -31.9% | 348.0% |
| Pizu Group Holdings Ltd ($8053) | | 40.3% | -42.9% | 1,742.9% | 157.9% |
| China Eco-Farming Ltd ($8166) | | -23.6% | -7.7% | 21.8% | 155.5% |
| Aurum Pacific China Group Ltd ($8148) | | | | 50.0% | 92.7% |
| Kingsoft Corp Ltd ($3888) | | 38.3% | 54.0% | 54.2% | 69.4% |
| |
|---|
| Median (36 companies) | | 15.6% | 11.4% | 20.9% | 5.5% |
|---|
| China Information Technology Development Ltd ($8178) | | -37.6% | -67.5% | 26.0% | 20.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Bio Cassava Holdings Ltd ($8129) | 90.2% | 90.4% | 97.4% | 98.4% | 98.3% |
| Chanjet Information Technology Co Ltd ($1588) | 91.9% | 89.2% | 91.3% | 92.4% | 91.4% |
| China Binary Sale Technology Ltd ($8255) | 60.0% | 63.5% | 68.5% | 67.7% | 85.9% |
| Kingdee International Software Group Co Ltd ($268) | 70.1% | 65.0% | 75.3% | 82.5% | 81.5% |
| Tian Ge Interactive Holdings Ltd ($1980) | 87.5% | 88.5% | 87.6% | 84.8% | 77.7% |
| |
|---|
| Median (35 companies) | 52.8% | 45.4% | 42.5% | 43.4% | 43.3% |
|---|
| China Information Technology Development Ltd ($8178) | 33.2% | 52.4% | 50.7% | 31.2% | 45.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| International Entertainment Corp ($1009) | 235.1% | 50.8% | 64.0% | 54.9% | 62.0% |
| Sinosoft Technology Group Ltd ($1297) | 55.5% | 62.6% | 54.9% | 57.2% | 59.0% |
| China Binary Sale Technology Ltd ($8255) | 41.3% | 35.1% | 35.4% | 44.4% | 50.5% |
| Boyaa Interactive International Ltd ($434) | 38.9% | 38.5% | 25.8% | 30.7% | 47.6% |
| TravelSky Technology Ltd ($696) | 43.3% | 38.1% | 35.8% | 31.9% | 41.1% |
| |
|---|
| Median (36 companies) | 12.2% | 11.8% | 18.5% | 13.7% | 9.5% |
|---|
| China Information Technology Development Ltd ($8178) | -22.9% | -11.3% | -94.8% | -45.3% | 21.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| NetDragon Websoft Inc ($777) | 13.3% | 21.1% | 34.6% | 54.6% | 42.9% |
| Aurum Pacific China Group Ltd ($8148) | 0.0% | | 2.9% | 7.5% | 20.6% |
| TravelSky Technology Ltd ($696) | 5.8% | 8.9% | 21.7% | 18.1% | 18.1% |
| Kingsoft Corp Ltd ($3888) | 6.8% | 4.3% | 3.8% | 14.3% | 11.1% |
| Beijing Beida Jade Bird Universal Sci-Tech Co Ltd ($8095) | 3.5% | 8.7% | 5.5% | 4.3% | 10.9% |
| |
|---|
| Median (36 companies) | 3.0% | 1.4% | 2.2% | 3.6% | 2.1% |
|---|
| China Information Technology Development Ltd ($8178) | 1.7% | 4.1% | 1.1% | 0.5% | 40.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pizu Group Holdings Ltd ($8053) | -3.2% | -21.8% | -13.4% | -6.8% | 120.0% |
| IGG Inc ($8002) | | | 55.9% | 41.4% | 25.9% |
| Boyaa Interactive International Ltd ($434) | 100.4% | 75.3% | 21.3% | 20.0% | 21.4% |
| Sinosoft Technology Group Ltd ($1297) | 31.6% | 34.0% | 21.9% | 20.2% | 20.8% |
| ITE Holdings Ltd ($8092) | -19.6% | -15.0% | 10.6% | 16.8% | 19.8% |
| |
|---|
| Median (36 companies) | 4.9% | 6.0% | 6.7% | 5.6% | 2.2% |
|---|
| China Information Technology Development Ltd ($8178) | -11.2% | -4.4% | -11.1% | -5.1% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Epicurean and Co Ltd ($8213) | 2.9x | 2.3x | 4.7x | 12.3x | 12.0x |
| Sing Lee Software Group Ltd ($8076) | | | | 6.2x | 4.4x |
| Century Sage Scientific Holdings Ltd ($1450) | -0.3x | 0.2x | 0.0x | -0.2x | 1.8x |
| Microsoft Corp ($4338) | 0.1x | 0.2x | 0.4x | 0.4x | 1.2x |
| Chinasoft International Ltd ($354) | -1.3x | -0.7x | 0.7x | 1.5x | 0.7x |
| |
|---|
| Median (20 companies) | -0.9x | -1.0x | -1.5x | -1.5x | -0.7x |
|---|
| China Information Technology Development Ltd ($8178) | | | | | -20.1x |
