Sino-I Technology Ltd Net Income surged on 141% in 2015 and EBITDA Margin increased on 9.8 pp from -6.3% to 3.6%
31/03/2016 • About Sino-I Technology Ltd (
$250) • By InTwits
Sino-I Technology Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sino-I Technology Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.3%
- Sino-I Technology Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -5.1%0
- Sino-I Technology Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.5%. At the same time it's a lot of higher than industry average of 4.2%.
- CAPEX is quite volatile: 48.6 in 2015, 31.8 in 2014, 86.6 in 2013, 61.6 in 2012, 163 in 2011
- The company has unprofitable business model: ROIC is at -1.3%
- It operates with high leverage: Net Debt/EBITDA is 4.1x while industry average is 3.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sino-I Technology Ltd ($250) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 792.0 | 659.1 | 683.4 | 784.8 | 808.3 | 3.0% |
| Gross Profit | 587.9 | 496.2 | 565.0 | 618.3 | 669.0 | 8.2% |
| SG&A | 603.5 | 489.6 | 489.4 | 608.2 | 602.8 | -0.9% |
| EBITDA | -125.0 | -63.7 | 17.6 | -49.1 | 29.0 | -159.0% |
| Net Income | -157.4 | -59.9 | -28.8 | -115.4 | 47.9 | -141.5% |
Balance Sheet
|
|---|
| Cash | 40.2 | 16.6 | 65.8 | 58.1 | 128.4 | 121.1% |
| Short Term Debt | 134.0 | 247.6 | 231.1 | 314.0 | 246.2 | -21.6% |
| Long Term Debt | 0.3 | 0.2 | 0.1 | 0.8 | 0.4 | -44.3% |
Cash flow
|
|---|
| Capex | 163.4 | 61.6 | 86.6 | 31.8 | 48.6 | 53.2% |
Ratios
|
|---|
| Revenue growth | 11.2% | -16.8% | 3.7% | 14.8% | 3.0% | |
| EBITDA growth | 660.2% | -49.0% | -127.6% | -379.4% | -159.0% | |
| Gross Margin | 74.2% | 75.3% | 82.7% | 78.8% | 82.8% | 4.0% |
| EBITDA Margin | -15.8% | -9.7% | 2.6% | -6.3% | 3.6% | 9.8% |
| Net Income Margin | -19.9% | -9.1% | -4.2% | -14.7% | 5.9% | 20.6% |
| SG&A, % of revenue | 76.2% | 74.3% | 71.6% | 77.5% | 74.6% | -2.9% |
| CAPEX, % of revenue | 20.6% | 9.3% | 12.7% | 4.0% | 6.0% | 2.0% |
| ROIC | -10.6% | -6.3% | -3.5% | -8.2% | -1.3% | 6.9% |
| ROE | -8.0% | -3.2% | -1.6% | -6.5% | 2.8% | 9.3% |
| Net Debt/EBITDA | | | 9.4x | | 4.1x | 4.1x |
Revenue and profitability
The company's Revenue increased on 3.0% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.8 pp from -6.3% to 3.6% in 2015.
Gross Margin increased on 4.0 pp from 78.8% to 82.8% in 2015. SG&A as a % of Revenue decreased on 2.9 pp from 77.5% to 74.6% in 2015.
Net Income marign jumped on 20.6 pp from -14.7% to 5.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
Sino-I Technology Ltd's CAPEX/Revenue was 6.0% in 2015. Sino-I Technology Ltd's CAPEX/Revenue decreased on 3.3 pp from 9.3% in 2012 to 6.0% in 2015. Average CAPEX/Revenue for the last three years was 7.6%.The company investments to CAPEX were large: 168% of EBITDA.
Return on investment
The company operates at negative ROIC (-1.31%) and low but positive ROE (2.77%). ROIC increased on 6.9 pp from -8.2% to -1.3% in 2015. ROE increased on 9.3 pp from -6.5% to 2.8% in 2015.
Leverage (Debt)
Debt level is 4.1x Net Debt / EBITDA and 8.5x Debt / EBITDA. Net Debt / EBITDA surged4.1x from to 4.1x in 2015. Debt dropped on 21.7% in 2015 while cash surged on 121% in 2015.
Appendix 1: Peers in Internet
Below you can find Sino-I Technology Ltd benchmarking vs. other companies in Internet 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 |
|---|
| Asian Capital Resources Holdings Ltd ($8025) | | -5.6% | | | 1,114.6% |
| China Public Procurement Ltd ($1094) | | 5,077.0% | -67.5% | 1,258.9% | 105.7% |
| Ourgame International Holdings Ltd ($6899) | | 33.7% | 14.8% | 101.3% | 61.8% |
| Media Asia Group Holdings Ltd ($8075) | | 1,124.6% | 275.6% | 3.6% | 55.9% |
| Tai Shing International Holdings Ltd ($8103) | | 61.3% | -35.9% | -4.9% | 48.5% |
| |
|---|
| Median (20 companies) | 29.9% | 13.2% | 12.6% | 11.3% | 9.8% |
|---|
| Sino-I Technology Ltd ($250) | | -16.8% | 3.7% | 14.8% | 3.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | 73.0% | 86.7% | 83.5% | 86.2% | 82.1% |
| China Digital Culture Group Ltd ($8175) | 62.1% | 64.3% | 78.6% | 65.2% | 72.7% |
| Prosten Technology Holdings Ltd ($8026) | 76.3% | 52.4% | 47.8% | 50.8% | 67.1% |
| SUNeVision Holdings Ltd ($8008) | 51.4% | 53.5% | 60.5% | 64.7% | 65.6% |
| Pacific Online Ltd ($543) | 69.1% | 71.0% | 70.5% | 67.3% | 64.8% |
| |
|---|
| Median (17 companies) | 62.1% | 65.0% | 63.4% | 61.3% | 50.9% |
|---|
| Sino-I Technology Ltd ($250) | 74.2% | 75.3% | 82.7% | 78.8% | 82.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 61.1% | 64.2% | 71.6% | 71.6% | 72.4% |
| China Digital Culture Group Ltd ($8175) | -12.1% | -66.7% | 22.5% | 40.8% | 46.6% |
| Tencent Holdings Ltd ($700) | 48.2% | 38.4% | 34.7% | 42.5% | 43.5% |
| Tradelink Electronic Commerce Ltd ($536) | 42.1% | 38.6% | 33.8% | 33.1% | 31.1% |
| GET Holdings Ltd ($8380) | -182.0% | -237.7% | 56.8% | 66.4% | 28.5% |
| |
|---|
| Median (20 companies) | 13.8% | 7.1% | 22.5% | 15.6% | 11.1% |
|---|
| Sino-I Technology Ltd ($250) | -15.8% | -9.7% | 2.6% | -6.3% | 3.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asian Capital Resources Holdings Ltd ($8025) | 0.0% | 0.0% | | 12.2% | 14.0% |
| SUNeVision Holdings Ltd ($8008) | 14.2% | 7.6% | 10.2% | 62.8% | 12.4% |
| Tencent Holdings Ltd ($700) | 14.2% | 9.0% | 8.1% | 5.5% | 8.2% |
| Ourgame International Holdings Ltd ($6899) | 4.5% | 1.8% | 3.1% | 1.7% | 6.4% |
| Capinfo Co Ltd ($1075) | 1.6% | 17.3% | 13.1% | 9.7% | 4.3% |
| |
|---|
| Median (20 companies) | 8.0% | 3.2% | 2.7% | 2.0% | 0.8% |
|---|
| Sino-I Technology Ltd ($250) | 20.6% | 9.3% | 12.7% | 4.0% | 6.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tencent Holdings Ltd ($700) | 33.4% | 29.5% | 26.7% | 29.1% | 24.3% |
| Pacific Online Ltd ($543) | 41.7% | 37.9% | 36.4% | 28.6% | 21.6% |
| Tradelink Electronic Commerce Ltd ($536) | 19.5% | 22.4% | 18.2% | 17.4% | 16.7% |
| SUNeVision Holdings Ltd ($8008) | 9.9% | 10.8% | 13.3% | 14.4% | 15.3% |
| Ourgame International Holdings Ltd ($6899) | | 42.8% | 33.3% | 17.5% | 12.7% |
| |
|---|
| Median (21 companies) | -0.8% | -1.4% | 4.0% | 0.1% | 2.1% |
|---|
| Sino-I Technology Ltd ($250) | -10.6% | -6.3% | -3.5% | -8.2% | -1.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tai Shing International Holdings Ltd ($8103) | | | | | 82.7x |
| GET Holdings Ltd ($8380) | | | -1.1x | -1.0x | 0.7x |
| Tencent Holdings Ltd ($700) | -0.1x | -0.2x | -0.2x | -0.2x | 0.5x |
| SUNeVision Holdings Ltd ($8008) | -2.7x | -2.2x | -2.0x | -1.5x | -1.2x |
| China Digital Culture Group Ltd ($8175) | | | -2.2x | -0.4x | -1.5x |
| |
|---|
| Median (13 companies) | -1.7x | -1.4x | -1.2x | -1.5x | -2.0x |
|---|
| Sino-I Technology Ltd ($250) | | | 9.4x | | 4.1x |
