China Strategic Holdings Ltd reports 54.9% Net Income growth while 42.7% Revenue decline
31/03/2016 • About China Strategic Holdings Ltd (
$235) • By InTwits
China Strategic Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Strategic Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -0.8%
- The company operates at negative EBITDA Margin: -7.3%
- China Strategic Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -27.6% for the sames years0
- China Strategic Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has unprofitable business model: ROIC is at -0.8%
- It operates with high leverage: Net Debt/EBITDA is 6.2x 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 Strategic Holdings Ltd ($235) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 9.3 | 5.7 | 109.5 | 417.6 | 239.5 | -42.7% |
| Gross Profit | 4.0 | 0.6 | 12.9 | 30.7 | 33.6 | 9.3% |
| SG&A | | 42.0 | 43.1 | 45.4 | 53.9 | 18.7% |
| EBITDA | -67.8 | -90.8 | -27.3 | -11.9 | -17.5 | 47.2% |
| Net Income | -70.1 | -90.6 | -15.4 | 377.0 | 584.1 | 54.9% |
Balance Sheet
|
|---|
| Cash | 630.6 | 243.6 | 180.1 | 302.5 | 372.0 | 23.0% |
| Short Term Debt | 97.0 | 113.5 | 111.7 | 0.0 | 101.1 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.0 | 0.0 | 0.0 | 2.5 | 1.6 | -36.1% |
Ratios
|
|---|
| Revenue growth | -24.1% | -39.2% | 1,832.6% | 281.4% | -42.7% | |
| EBITDA growth | 10.5% | 34.1% | -69.9% | -56.5% | 47.2% | |
| Gross Margin | 43.3% | 11.4% | 11.7% | 7.4% | 14.0% | 6.7% |
| EBITDA Margin | -727.1% | -1,603.6% | -25.0% | -2.8% | -7.3% | -4.5% |
| Net Income Margin | -752.6% | -1,599.5% | -14.1% | 90.3% | 243.9% | 153.7% |
| SG&A, % of revenue | | 740.9% | 39.4% | 10.9% | 22.5% | 11.6% |
| CAPEX, % of revenue | 0.0% | 0.0% | 0.0% | 0.6% | 0.7% | 0.1% |
| ROIC | -8.3% | -12.0% | -4.0% | -1.3% | -0.8% | 0.5% |
| ROE | -9.3% | -13.5% | -2.5% | 40.4% | 25.2% | -15.1% |
Revenue and profitability
The company's Revenue dropped on 42.7% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 4.5 pp from -2.8% to -7.3% in 2015.
Gross Margin increased on 6.7 pp from 7.4% to 14.0% in 2015. SG&A as a % of Revenue jumped on 11.6 pp from 10.9% to 22.5% in 2015.
Net Income marign surged on 154 pp from 90.3% to 244% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.68% in 2015. The company showed small growth in CAPEX/Revenue0.68 pp from 0% in 2012 to 0.68% in 2015.
Return on investment
The company operates at negative ROIC (-0.77%) and low but positive ROE (25.23%). ROIC increased slightly on 0.54 pp from -1.3% to -0.77% in 2015. ROE dropped on 15.1 pp from 40.4% to 25.2% in 2015.
Leverage (Debt)
Debt level is 6.2x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt surged while cash jumped on 23.0% in 2015.
Appendix 1: Peers in Housewares
Below you can find China Strategic Holdings Ltd benchmarking vs. other companies in Housewares 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 |
|---|
| International Housewares Retail Co Ltd ($1373) | | 19.0% | 23.7% | 16.6% | 11.7% |
| World Houseware Holdings Ltd ($713) | | -4.8% | -7.4% | -0.4% | 0.2% |
| China Creative Home Group Ltd ($1678) | | 20.5% | 23.4% | 17.9% | -9.0% |
| Perfectech International Holdings Ltd ($765) | | -21.9% | -3.5% | -9.3% | -12.2% |
| Bolina Holding Co Ltd ($1190) | | 24.6% | 11.8% | -5.2% | -17.3% |
| |
|---|
| Median (5 companies) | | 19.0% | 11.8% | -0.4% | -9.0% |
|---|
| China Strategic Holdings Ltd ($235) | | -39.2% | 1,832.6% | 281.4% | -42.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| International Housewares Retail Co Ltd ($1373) | 42.4% | 44.5% | 46.1% | 46.5% | 46.3% |
| Bolina Holding Co Ltd ($1190) | 46.3% | 47.7% | 46.8% | 43.5% | 39.9% |
| China Creative Home Group Ltd ($1678) | 41.2% | 44.2% | 44.3% | 40.4% | 36.9% |
| Perfectech International Holdings Ltd ($765) | 16.7% | 23.9% | 26.6% | 25.1% | 22.7% |
| World Houseware Holdings Ltd ($713) | 8.8% | 13.1% | 10.3% | 10.8% | 14.6% |
| |
|---|
| Median (5 companies) | 41.2% | 44.2% | 44.3% | 40.4% | 36.9% |
|---|
| China Strategic Holdings Ltd ($235) | 43.3% | 11.4% | 11.7% | 7.4% | 14.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Creative Home Group Ltd ($1678) | 33.1% | 36.0% | 33.8% | 32.6% | 28.5% |
| Bolina Holding Co Ltd ($1190) | 36.5% | 37.8% | 34.0% | 28.7% | 20.4% |
| International Housewares Retail Co Ltd ($1373) | 8.8% | 9.8% | 9.6% | 8.5% | 6.7% |
| Perfectech International Holdings Ltd ($765) | 7.3% | 14.6% | 14.9% | 11.7% | 4.6% |
| World Houseware Holdings Ltd ($713) | 2.1% | 7.1% | 3.4% | 2.4% | 4.2% |
| |
|---|
| Median (5 companies) | 8.8% | 14.6% | 14.9% | 11.7% | 6.7% |
|---|
| China Strategic Holdings Ltd ($235) | -727.1% | -1,603.6% | -25.0% | -2.8% | -7.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Creative Home Group Ltd ($1678) | 3.3% | 1.2% | 2.4% | 42.0% | 13.1% |
| World Houseware Holdings Ltd ($713) | 2.2% | 3.6% | 6.2% | 12.4% | 5.1% |
| International Housewares Retail Co Ltd ($1373) | 1.6% | 2.7% | 3.0% | 2.0% | 3.9% |
| Perfectech International Holdings Ltd ($765) | 5.5% | 2.3% | 16.2% | 19.8% | 2.9% |
| Bolina Holding Co Ltd ($1190) | 12.3% | 5.2% | 4.4% | 1.8% | 0.6% |
| |
|---|
| Median (5 companies) | 3.3% | 2.7% | 4.4% | 12.4% | 3.9% |
|---|
| China Strategic Holdings Ltd ($235) | 0.0% | 0.0% | 0.0% | 0.6% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Creative Home Group Ltd ($1678) | 37.6% | 38.8% | 28.1% | 23.6% | 15.3% |
| International Housewares Retail Co Ltd ($1373) | | 44.7% | 38.4% | 20.3% | 11.8% |
| Bolina Holding Co Ltd ($1190) | 51.7% | 38.8% | 24.7% | 16.8% | 8.5% |
| Perfectech International Holdings Ltd ($765) | 5.4% | 11.7% | 11.8% | 7.6% | 0.5% |
| World Houseware Holdings Ltd ($713) | -3.0% | 1.6% | -1.9% | -2.8% | -1.8% |
| |
|---|
| Median (5 companies) | 21.5% | 38.8% | 24.7% | 16.8% | 8.5% |
|---|
| China Strategic Holdings Ltd ($235) | -8.3% | -12.0% | -4.0% | -1.3% | -0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| World Houseware Holdings Ltd ($713) | 4.9x | 1.4x | 4.7x | 11.7x | 7.4x |
| China Creative Home Group Ltd ($1678) | 0.2x | -0.4x | -2.3x | -1.4x | -1.8x |
| Bolina Holding Co Ltd ($1190) | 0.2x | -1.7x | -1.1x | -1.9x | -2.4x |
| International Housewares Retail Co Ltd ($1373) | -0.7x | -0.2x | -0.3x | -2.7x | -2.8x |
| Perfectech International Holdings Ltd ($765) | -1.4x | -1.8x | -1.7x | -0.7x | -4.4x |
| |
|---|
| Median (5 companies) | 0.2x | -0.4x | -1.1x | -1.4x | -2.4x |
|---|
