Cosmos Machinery Enterprises Ltd EBITDA dropped on 34.8% in 2015 and Revenue decreased on 3.9%
31/03/2016 • About Cosmos Machinery Enterprises Ltd (
$118) • By InTwits
Cosmos Machinery Enterprises Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cosmos Machinery Enterprises Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.1%
- EBITDA Margin is quite volatile: 2.5% in 2015, 3.7% in 2014, 0.1% in 2013, 3.8% in 2012, 4.9% in 2011
- Cosmos Machinery Enterprises Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's in pair with industry average of 5.8%.
- CAPEX is quite volatile: 35.7 in 2015, 113 in 2014, 60.4 in 2013, 70.1 in 2012, 215 in 2011
- The company has unprofitable business model: ROIC is at -1.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cosmos Machinery Enterprises Ltd ($118) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,417 | 2,122 | 2,465 | 2,493 | 2,395 | -3.9% |
| Gross Profit | 401 | 364 | 348 | 434 | 379 | -12.6% |
| SG&A | 363 | 380 | 437 | 442 | 439 | -0.6% |
| EBITDA | 119 | 81 | 3 | 92 | 60 | -34.8% |
| Net Income | 27 | -24 | 108 | -33 | -50 | 48.9% |
Balance Sheet
|
|---|
| Cash | 227 | 209 | 451 | 353 | 354 | 0.3% |
| Short Term Debt | 356 | 372 | 451 | 487 | 535 | 9.9% |
| Long Term Debt | 25 | 15 | 5 | 63 | 53 | -15.9% |
Cash flow
|
|---|
| Capex | 215 | 70 | 60 | 113 | 36 | -68.4% |
Ratios
|
|---|
| Revenue growth | -0.4% | -12.2% | 16.2% | 1.1% | -3.9% | |
| EBITDA growth | -26.5% | -31.7% | -96.1% | 2,802.0% | -34.8% | |
| Gross Margin | 16.6% | 17.1% | 14.1% | 17.4% | 15.8% | -1.6% |
| EBITDA Margin | 4.9% | 3.8% | 0.1% | 3.7% | 2.5% | -1.2% |
| Net Income Margin | 1.1% | -1.1% | 4.4% | -1.3% | -2.1% | -0.7% |
| SG&A, % of revenue | 15.0% | 17.9% | 17.7% | 17.7% | 18.3% | 0.6% |
| CAPEX, % of revenue | 8.9% | 3.3% | 2.5% | 4.5% | 1.5% | -3.0% |
| ROIC | 2.6% | 0.2% | -3.8% | 0.3% | -1.1% | -1.4% |
| ROE | 2.0% | -1.7% | 7.6% | -2.3% | -3.6% | -1.3% |
| Net Debt/EBITDA | 1.3x | 2.2x | 1.7x | 2.1x | 3.9x | 1.8x |
Revenue and profitability
The company's Revenue decreased on 3.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.59 pp from 13.1% to 13.7% in 2015.
Gross Margin decreased slightly on 1.6 pp from 17.4% to 15.8% in 2015. SG&A as a % of Revenue increased slightly on 0.62 pp from 17.7% to 18.3% in 2015.
Net Income marign decreased slightly on 0.73 pp from -1.3% to -2.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Cosmos Machinery Enterprises Ltd had CAPEX/Revenue of 1.5%. CAPEX/Revenue decreased slightly on 1.8 pp from 3.3% in 2012 to 1.5% in 2015. It's average CAPEX/Revenue for the last three years was 2.8%.Cosmos Machinery Enterprises Ltd invested a big chunk of EBITDA (59.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-1.10%) and ROE (-3.57%). ROIC decreased slightly on 1.4 pp from 0.33% to -1.1% in 2015. ROE decreased slightly on 1.3 pp from -2.3% to -3.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.9x and Debt / EBITDA is 9.8x. Net Debt / EBITDA surged on 1.8x from 2.1x to 3.9x in 2015. Debt increased on 6.9% in 2015 while cash showed almost no change in 2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find Cosmos Machinery Enterprises Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | | 2.6% | -8.9% | 37.3% | 52.8% |
| North Asia Strategic Holdings Ltd ($8080) | | -52.2% | -29.1% | 23.7% | 42.6% |
| Huazhang Technology Holding Ltd ($1673) | | 131.6% | 9.5% | 22.9% | 23.5% |
| Sinoref Holdings Ltd ($1020) | | -0.2% | -42.2% | 29.2% | 19.9% |
| LK Technology Holdings Ltd ($558) | | 15.7% | -15.0% | 3.7% | 18.5% |
| |
|---|
| Median (21 companies) | 13.1% | -3.6% | -4.2% | -1.5% | -5.6% |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | | -12.2% | 16.2% | 1.1% | -3.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 38.3% | 49.1% | 51.7% | 54.9% | 65.5% |
| Renheng Enterprise Holdings Ltd ($3628) | 36.4% | 44.3% | 44.8% | 45.4% | 48.9% |
| Haitian International Holdings Ltd ($1882) | 29.7% | 30.1% | 31.6% | 32.4% | 33.0% |
| CHTC Fong's Industries Co Ltd ($641) | 26.5% | 24.4% | 30.0% | 32.3% | 31.2% |
| Good Friend International Holdings Inc ($2398) | 23.3% | 20.1% | 22.9% | 26.5% | 27.1% |
| |
|---|
| Median (21 companies) | 24.2% | 24.4% | 22.6% | 20.0% | 21.0% |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | 16.6% | 17.1% | 14.1% | 17.4% | 15.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 18.5% | 24.0% | 26.9% | 28.0% | 28.5% |
| Haitian International Holdings Ltd ($1882) | 20.5% | 19.7% | 20.7% | 21.9% | 22.8% |
| Renheng Enterprise Holdings Ltd ($3628) | 22.9% | 24.7% | 23.9% | 20.7% | 17.3% |
| Huazhang Technology Holding Ltd ($1673) | 3.1% | 11.6% | 11.2% | 12.5% | 11.3% |
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | 9.9% |
| |
|---|
| Median (21 companies) | 9.7% | 10.9% | 8.7% | 8.7% | 5.7% |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | 4.9% | 3.8% | 0.1% | 3.7% | 2.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 1.3% | 2.3% | 10.1% | 7.8% | 31.9% |
| Honghua Group Ltd ($196) | 9.9% | 11.5% | 14.6% | 6.8% | 27.3% |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 14.9% | 20.5% | 20.3% | 11.6% | 15.6% |
| Shenji Group Kunming Machine Tool Co Ltd ($300) | 9.2% | 9.5% | 6.7% | 5.0% | 8.3% |
| Haitian International Holdings Ltd ($1882) | 2.1% | 4.2% | 6.8% | 6.3% | 6.3% |
| |
|---|
| Median (21 companies) | 5.3% | 4.2% | 4.3% | 4.2% | 2.4% |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | 8.9% | 3.3% | 2.5% | 4.5% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Haitian International Holdings Ltd ($1882) | 26.8% | 19.8% | 21.2% | 19.4% | 16.3% |
| Huazhang Technology Holding Ltd ($1673) | | 29.6% | 16.2% | 16.3% | 16.2% |
| Jingwei Textile Machinery ($350) | 23.3% | 19.4% | 20.9% | 17.4% | 14.9% |
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | 5.9% |
| Shanghai Prime Machinery Co Ltd ($2345) | 5.4% | 2.5% | 2.8% | 2.5% | 5.8% |
| |
|---|
| Median (21 companies) | 9.9% | 7.9% | 4.3% | 3.0% | 1.9% |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | 2.6% | 0.2% | -3.8% | 0.3% | -1.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.9x | 3.0x | 11.4x | 5.6x | 129.4x |
| Honghua Group Ltd ($196) | 0.1x | 1.2x | 3.2x | 5.2x | 14.2x |
| First Tractor Co Ltd ($38) | 1.1x | 0.5x | 2.5x | 9.2x | 6.3x |
| LK Technology Holdings Ltd ($558) | 0.9x | 2.5x | 5.1x | 4.9x | 4.6x |
| CHTC Fong's Industries Co Ltd ($641) | 3.4x | | 2.2x | 2.5x | 3.5x |
| |
|---|
| Median (16 companies) | -0.5x | -1.1x | -1.0x | -0.6x | 1.4x |
|---|
| Cosmos Machinery Enterprises Ltd ($118) | 1.3x | 2.2x | 1.7x | 2.1x | 3.9x |
