China Seven Star Holdings Ltd revenue jumped on 195% in 2015 and EBITDA Margin jumped on 43.0 pp from -61.3% to -18.3%
31/03/2016 • About China Seven Star Holdings Ltd (
$245) • By InTwits
China Seven Star Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Seven Star Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.5%
- The company operates at negative EBITDA Margin: -18.3%
- EBITDA Margin is quite volatile: -18.3% in 2015, -61.3% in 2014, -18.0% in 2013, 90.6% in 2012, 79.2% in 2011
- China Seven Star Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has unprofitable business model: ROIC is at -1.5%
- It operates with high leverage: Net Debt/EBITDA is 2.7x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Seven Star Holdings Ltd ($245) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 578.0 | 616.9 | 112.2 | 68.1 | 201.1 | 195.3% |
| Gross Profit | -15.4 | 68.0 | 3.8 | 0.8 | 1.8 | 116.4% |
| SG&A | | 91.8 | 39.9 | 36.4 | 32.2 | -11.3% |
| EBITDA | 457.9 | 559.1 | -20.2 | -41.7 | -36.7 | -12.0% |
| Net Income | -19.0 | 3.3 | -1.8 | -30.1 | -28.6 | -5.2% |
Balance Sheet
|
|---|
| Cash | 40.7 | 62.0 | 40.9 | 29.6 | 5,062.5 | 17,022.0% |
| Short Term Debt | 638.8 | 30.3 | 4.5 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 1.9 | 0.6 | 0.1 | 0.0 | 0.2 | |
Ratios
|
|---|
| Revenue growth | -0.2% | 6.7% | -81.8% | -39.3% | 195.3% | |
| EBITDA growth | 77.1% | 22.1% | -103.6% | 106.0% | -12.0% | |
| Gross Margin | -2.7% | 11.0% | 3.3% | 1.2% | 0.9% | -0.3% |
| EBITDA Margin | 79.2% | 90.6% | -18.0% | -61.3% | -18.3% | 43.0% |
| Net Income Margin | -3.3% | 0.5% | -1.6% | -44.3% | -14.2% | 30.1% |
| SG&A, % of revenue | | 14.9% | 35.6% | 53.4% | 16.0% | -37.4% |
| CAPEX, % of revenue | 0.3% | 0.1% | 0.0% | 0.0% | 0.1% | 0.1% |
| ROIC | -7.6% | 8.7% | -49.8% | -343.1% | -1.5% | 341.7% |
| ROE | -6.5% | 1.2% | -0.7% | -11.8% | -1.0% | 10.8% |
| Net Debt/EBITDA | 1.3x | -0.1x | | | | 0.0x |
Revenue and profitability
The company's Revenue jumped on 195% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 43.0 pp from -61.3% to -18.3% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue dropped on 37.4 pp from 53.4% to 16.0% in 2015.
Net Income marign jumped on 30.1 pp from -44.3% to -14.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Seven Star Holdings Ltd had CAPEX/Revenue of 0.11%. The company's CAPEX/Revenue showed almost no change from 2012 to 2015.
Return on investment
The company operates at negative ROIC (-1.47%) and ROE (-1.03%). ROIC surged on 342 pp from -343% to -1.5% in 2015. ROE jumped on 10.8 pp from -11.8% to -1.0% in 2015.
Leverage (Debt)
The company has no debt. Cash surged on 17,022% in 2015.
Appendix 1: Peers in Commercial Services
Below we provide China Seven Star Holdings Ltd benchmarking against other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | | 99.1% | 14.9% | -88.3% | 271.8% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Celebrate International Holdings Ltd ($8212) | | -90.1% | 1,437.6% | -6.3% | 117.0% |
| Haier Healthwise Holdings Ltd ($348) | | -22.0% | -50.1% | -7.5% | 101.1% |
| CAR Inc ($699) | | 96.4% | 68.0% | 30.3% | 42.1% |
| |
|---|
| Median (65 companies) | | 8.0% | 8.6% | 9.9% | 4.0% |
|---|
| China Seven Star Holdings Ltd ($245) | | 6.7% | -81.8% | -39.3% | 195.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | 89.6% |
| Winto Group Holdings Ltd ($8238) | 91.8% | 90.2% | 93.4% | 92.0% | 88.4% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| Nirvana Asia Ltd ($1438) | 65.6% | 68.3% | 69.6% | 70.5% | 75.7% |
| |
|---|
| Median (60 companies) | 34.1% | 32.2% | 31.1% | 31.8% | 31.9% |
|---|
| China Seven Star Holdings Ltd ($245) | -2.7% | 11.0% | 3.3% | 1.2% | 0.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | 61.6% | 84.9% | 75.9% | 80.9% |
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | 73.6% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| CAR Inc ($699) | 31.6% | 43.6% | 30.1% | 43.1% | 67.4% |
| Jiangsu Expressway Co Ltd ($177) | 60.8% | 57.0% | 60.7% | 59.3% | 61.5% |
| |
|---|
| Median (65 companies) | 17.1% | 17.5% | 16.0% | 12.9% | 10.1% |
|---|
| China Seven Star Holdings Ltd ($245) | 79.2% | 90.6% | -18.0% | -61.3% | -18.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 11.5% | 21.3% | 9.0% | 13.9% | 47.4% |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | 45.8% |
| Shenzhen International Holdings Ltd ($152) | 28.3% | 23.0% | 22.1% | 20.9% | 35.0% |
| Celebrate International Holdings Ltd ($8212) | 140.9% | 211.7% | 12.0% | 6.2% | 34.2% |
| China Maple Leaf Educational Systems Ltd ($1317) | 39.5% | 25.7% | 50.9% | 21.1% | 32.8% |
| |
|---|
| Median (65 companies) | 3.6% | 3.1% | 4.0% | 3.2% | 3.9% |
|---|
| China Seven Star Holdings Ltd ($245) | 0.3% | 0.1% | 0.0% | 0.0% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| 1010 Printing Group Ltd ($1127) | 14.4% | 13.5% | 20.8% | 17.8% | 19.9% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | 19.8% |
| iOne Holdings Ltd ($982) | 17.9% | 12.5% | 11.1% | 9.4% | 19.2% |
| CAR Inc ($699) | | 5.2% | 2.7% | 12.2% | 19.0% |
| |
|---|
| Median (65 companies) | 5.2% | 6.3% | 6.4% | 5.8% | 3.3% |
|---|
| China Seven Star Holdings Ltd ($245) | -7.6% | 8.7% | -49.8% | -343.1% | -1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | | 22.2x |
| Kai Yuan Holdings Ltd ($1215) | -15.6x | -143.8x | -0.7x | | 18.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | 6.2x |
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | 5.5x |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| |
|---|
| Median (43 companies) | -0.1x | 0.0x | -0.7x | -0.5x | -0.6x |
|---|
