Eternity Investment Ltd reports 1,074% CAPEX growth and 108% Revenue growth
31/03/2016 • About Eternity Investment Ltd (
$764) • By InTwits
Eternity Investment Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eternity Investment Ltd doesn't have a profitable business model yet: 2015 ROIC is -2.2%
- The company operates at negative EBITDA Margin: -30.0%
- EBITDA Margin is quite volatile: -30.0% in 2015, 37.9% in 2014, -93.4% in 2013, 66.5% in 2012, 73.8% in 2011
- Eternity Investment Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 10.2 in 2015, 0.87 in 2014, 0.013 in 2013, 21.7 in 2012, 0.0020 in 2011
- The company has unprofitable business model: ROIC is at -2.2%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is -41.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Eternity Investment Ltd ($764) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 79.2 | 67.4 | 25.8 | 88.7 | 184.8 | 108.4% |
| Gross Profit | 79.2 | | | 76.8 | 89.0 | 15.9% |
| SG&A | | | 50.0 | 45.6 | 91.7 | 101.0% |
| EBITDA | 58.4 | 44.8 | -24.1 | 33.6 | -55.4 | -264.8% |
| Net Income | -155.3 | 206.3 | 97.2 | 238.1 | 105.3 | -55.8% |
Balance Sheet
|
|---|
| Cash | 217.6 | 298.0 | 662.2 | 384.8 | 509.3 | 32.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 10.4 | 59.1 | 469.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 155.0 | 1,408,563.6% |
Cash flow
|
|---|
| Capex | 0.0 | 21.7 | 0.0 | 0.9 | 10.2 | 1,074.3% |
Ratios
|
|---|
| Revenue growth | 1.2% | -14.8% | -61.8% | 243.8% | 108.4% | |
| EBITDA growth | -17.1% | -23.3% | -153.8% | -239.6% | -264.8% | |
| Gross Margin | 100.0% | | | 86.6% | 48.2% | -38.5% |
| EBITDA Margin | 73.8% | 66.5% | -93.4% | 37.9% | -30.0% | -67.9% |
| Net Income Margin | -196.1% | 305.8% | 377.0% | 268.5% | 57.0% | -211.5% |
| SG&A, % of revenue | | | 193.8% | 51.4% | 49.6% | -1.8% |
| CAPEX, % of revenue | 0.0% | 32.1% | 0.1% | 1.0% | 5.5% | 4.5% |
| ROIC | 4.4% | 3.2% | -1.4% | 1.6% | -2.2% | -3.8% |
| ROE | -12.0% | 14.9% | 5.8% | 12.0% | 3.8% | -8.2% |
| Net Debt/EBITDA | -3.7x | -6.6x | | -11.1x | | 11.1x |
Revenue and profitability
The company's Revenue surged on 108% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 67.9 pp from 37.9% to -30.0% in 2015.
Gross Margin dropped on 38.5 pp from 86.6% to 48.2% in 2015. SG&A as a % of Revenue decreased slightly on 1.8 pp from 51.4% to 49.6% in 2015.
Net Income marign dropped on 212 pp from 268% to 57.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 5.5%. Eternity Investment Ltd showed big decline in CAPEX/Revenue of 26.6 pp from 32.1% in 2012 to 5.5% in 2015. It's average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at negative ROIC (-2.20%) and low but positive ROE (3.83%). ROIC decreased on 3.8 pp from 1.6% to -2.2% in 2015. ROE decreased on 8.2 pp from 12.0% to 3.8% in 2015.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA jumped on 11.1x from -11.1x to in 2015. Debt jumped on 1,963% in 2015 while cash jumped on 32.4% in 2015.
Appendix 1: Peers in Investment Companies
Below you can find Eternity Investment Ltd benchmarking vs. other companies in Investment Companies 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 |
|---|
| CK Hutchison Holdings Ltd ($1) | | -41.8% | -11.4% | -90.8% | 10,576.1% |
| UBA Investments Ltd ($768) | | | | -32.2% | 4,559.4% |
| Capital VC Ltd ($2324) | | | | 489.2% | 861.9% |
| Prosperity Investment Holdings Ltd ($310) | | | 20.9% | -48.8% | 559.5% |
| China Innovation Investment Ltd ($1217) | | | | | 517.9% |
| |
|---|
| Median (21 companies) | | 14.9% | 5.5% | 9.5% | 103.3% |
|---|
| Eternity Investment Ltd ($764) | | -14.8% | -61.8% | 243.8% | 108.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Properties Investment Holdings Ltd ($736) | 10.6% | 47.5% | 40.8% | 46.2% | 87.2% |
| City e-Solutions Ltd ($557) | 69.0% | 81.1% | 81.5% | 81.6% | 79.1% |
| AVIC Joy Holdings HK Ltd ($260) | 20.4% | 19.5% | 20.9% | 14.0% | 16.3% |
| Infinity Financial Group Holdings Ltd ($1152) | 24.3% | 19.0% | 17.5% | 22.4% | 15.8% |
| Harmonic Strait Financial Holdings Ltd ($33) | 16.9% | 40.8% | 8.4% | 11.8% | 9.0% |
| |
|---|
| Median (6 companies) | 20.4% | 30.2% | 19.2% | 18.2% | 16.1% |
|---|
| Eternity Investment Ltd ($764) | 100.0% | | | 86.6% | 48.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Capital VC Ltd ($2324) | -2,944.6% | | 36.7% | 93.1% | 99.3% |
| Harmony Asset Ltd ($428) | | 39.8% | | | 95.7% |
| Unity Investments Holdings Ltd ($913) | | | 89.0% | 90.8% | 95.7% |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 39.4% | | 101.3% | 85.9% | 85.8% |
| China Development Bank International Investment Ltd ($1062) | -544.1% | -74.4% | 26.1% | 69.2% | 85.6% |
| |
|---|
| Median (24 companies) | 4.6% | 7.1% | -5.5% | 1.0% | 11.1% |
|---|
| Eternity Investment Ltd ($764) | 73.8% | 66.5% | -93.4% | 37.9% | -30.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Properties Investment Holdings Ltd ($736) | 215.9% | 55.3% | 3.0% | 20.8% | 58.1% |
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 2.2% | | 13.7% | 17.1% | 39.8% |
| Heritage International Holdings Ltd ($412) | | | 10.9% | 7.4% | 37.9% |
| Opes Asia Development Ltd ($810) | | | 11.3% | 76.1% | 25.0% |
| CK Hutchison Holdings Ltd ($1) | 3.9% | 0.7% | 1.0% | 503.6% | 13.5% |
| |
|---|
| Median (24 companies) | 2.5% | 0.7% | 0.6% | 0.2% | 0.6% |
|---|
| Eternity Investment Ltd ($764) | 0.0% | 32.1% | 0.1% | 1.0% | 5.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Capital VC Ltd ($2324) | -5.0% | | | 21.8% | 100.7% |
| Harmony Asset Ltd ($428) | -14.0% | 3.2% | -13.7% | -15.4% | 88.0% |
| Build King Holdings Ltd ($240) | 11.0% | -2.5% | 3.5% | 13.4% | 18.3% |
| Unity Investments Holdings Ltd ($913) | -69.6% | -36.2% | 26.4% | 47.4% | 17.5% |
| UBA Investments Ltd ($768) | 11.0% | -22.2% | -1.9% | -8.6% | 13.2% |
| |
|---|
| Median (38 companies) | -5.0% | -3.1% | -2.2% | -5.2% | -2.6% |
|---|
| Eternity Investment Ltd ($764) | 4.4% | 3.2% | -1.4% | 1.6% | -2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Langham Hospitality Investments and Langham Hospitality Investments Ltd ($1270) | 9.3x | | 12.5x | 9.5x | 11.2x |
| CK Hutchison Holdings Ltd ($1) | 1.8x | 1.9x | 0.6x | 7.2x | 5.5x |
| China Financial International Investments Ltd ($721) | -2.0x | | | | 2.4x |
| Harmony Asset Ltd ($428) | | -3.2x | | | -0.1x |
| Capital VC Ltd ($2324) | | | 2.2x | -1.2x | -0.2x |
| |
|---|
| Median (15 companies) | -0.6x | -1.1x | 0.0x | -0.4x | -0.9x |
|---|
