Good Friend International Holdings Inc reports 54.5% Net Income decline and 23.8% Revenue decline
31/03/2016 • About Good Friend International Holdings Inc (
$2398) • By InTwits
Good Friend International Holdings Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Good Friend International Holdings Inc is a company in decline: 2015 revenue growth was -23.8%, 5 years revenue CAGR was -6.3%
- Good Friend International Holdings Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 20.9%.
- CAPEX is quite volatile: 5.8 in 2015, 4.2 in 2014, 4.8 in 2013, 16.9 in 2012, 61.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Good Friend International Holdings Inc ($2398) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,884 | 1,541 | 1,350 | 1,300 | 990 | -23.8% |
| Gross Profit | 439 | 309 | 310 | 345 | 268 | -22.3% |
| SG&A | | 261 | 234 | 229 | 238 | 4.1% |
| EBITDA | 221 | 103 | 123 | 168 | 99 | -41.4% |
| Net Income | 154 | 42 | 37 | 101 | 46 | -54.5% |
Balance Sheet
|
|---|
| Cash | 140 | 110 | 236 | 165 | 102 | -38.3% |
| Short Term Debt | 364 | 373 | 368 | 402 | 409 | 1.6% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 61 | 17 | 5 | 4 | 6 | 37.8% |
Ratios
|
|---|
| Revenue growth | 37.1% | -18.2% | -12.4% | -3.7% | -23.8% | |
| EBITDA growth | 16.9% | -53.4% | 19.3% | 36.8% | -41.4% | |
| Gross Margin | 23.3% | 20.1% | 22.9% | 26.5% | 27.1% | 0.5% |
| EBITDA Margin | 11.7% | 6.7% | 9.1% | 12.9% | 9.9% | -3.0% |
| Net Income Margin | 8.2% | 2.7% | 2.7% | 7.8% | 4.7% | -3.1% |
| SG&A, % of revenue | | 16.9% | 17.3% | 17.6% | 24.1% | 6.5% |
| CAPEX, % of revenue | 3.3% | 1.1% | 0.4% | 0.3% | 0.6% | 0.3% |
| ROIC | 20.0% | 6.5% | 8.7% | 12.1% | 5.9% | -6.2% |
| ROE | 23.6% | 6.3% | 5.5% | 14.5% | 6.3% | -8.2% |
| Net Debt/EBITDA | 1.0x | 2.6x | 1.1x | 1.4x | 3.1x | 1.7x |
Revenue and profitability
Good Friend International Holdings Inc's Revenue dropped on 23.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 97.9 pp from 104% to 202% in 2015.
Gross Margin increased slightly on 0.53 pp from 26.5% to 27.1% in 2015. SG&A as a % of Revenue increased on 6.5 pp from 17.6% to 24.1% in 2015.
Net Income marign decreased on 3.1 pp from 7.8% to 4.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.59%. The company's CAPEX/Revenue decreased slightly on 0.51 pp from 1.1% in 2012 to 0.59% in 2015. Average CAPEX/Revenue for the last three years was 0.42%.
Return on investment
The company operates at low ROIC (5.92%) and ROE (6.27%). ROIC decreased on 6.2 pp from 12.1% to 5.9% in 2015. ROE decreased on 8.2 pp from 14.5% to 6.3% in 2015.
Leverage (Debt)
Debt level is 3.1x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA surged on 1.7x from 1.4x to 3.1x in 2015. Debt increased slightly on 1.6% in 2015 while cash dropped on 38.3% in 2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find Good Friend International Holdings Inc 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% | -2.4% | 1.1% | -3.9% |
|---|
| Good Friend International Holdings Inc ($2398) | | -18.2% | -12.4% | -3.7% | -23.8% |
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% |
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 45.5% | 59.7% | 58.3% | 48.6% | 26.7% |
| |
|---|
| Median (21 companies) | 24.2% | 24.4% | 21.5% | 18.7% | 20.9% |
|---|
| Good Friend International Holdings Inc ($2398) | 23.3% | 20.1% | 22.9% | 26.5% | 27.1% |
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% |
| Shanghai Prime Machinery Co Ltd ($2345) | 9.6% | 7.8% | 8.9% | 7.7% | 9.2% |
| |
|---|
| Median (21 companies) | 9.6% | 10.9% | 8.6% | 8.5% | 5.7% |
|---|
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | 9.9% |
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) | 6.1% | 4.2% | 4.3% | 4.5% | 2.4% |
|---|
| Good Friend International Holdings Inc ($2398) | 3.3% | 1.1% | 0.4% | 0.3% | 0.6% |
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% |
| Shanghai Prime Machinery Co Ltd ($2345) | 5.4% | 2.5% | 2.8% | 2.5% | 5.8% |
| Renheng Enterprise Holdings Ltd ($3628) | 23.7% | 17.0% | 12.8% | 6.9% | 4.8% |
| |
|---|
| Median (21 companies) | 9.8% | 7.9% | 4.0% | 2.6% | 1.4% |
|---|
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | 5.9% |
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 |
| Cosmos Machinery Enterprises Ltd ($118) | 1.3x | 2.2x | 1.7x | 2.1x | 3.9x |
| |
|---|
| Median (16 companies) | -0.5x | -1.1x | -1.0x | -0.6x | 1.4x |
|---|
| Good Friend International Holdings Inc ($2398) | 1.0x | 2.6x | 1.1x | 1.4x | 3.1x |
