Sound Global Ltd reports 10.3% revenue growth in FY2015 and 3.2 pp EBITDA Margin decline from 24.0% to 20.7%
31/03/2016 • About Sound Global Ltd (
$967) • By InTwits
Sound Global Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has business model with low profitability: ROIC is at 9.3%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is -0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sound Global Ltd ($967) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,288 | 2,652 | 3,163 | 3,558 | 3,925 | 10.3% |
| Gross Profit | 722 | 800 | 968 | 1,086 | 1,157 | 6.5% |
| SG&A | 143 | 156 | 173 | 198 | 250 | 26.5% |
| EBITDA | 584 | 641 | 753 | 852 | 813 | -4.6% |
| Net Income | 414 | 428 | 433 | 503 | 455 | -9.4% |
Balance Sheet
|
|---|
| Cash | 2,074 | 2,912 | 3,534 | 1,968 | 1,722 | -12.5% |
| Short Term Debt | 1,130 | 465 | 776 | 2,355 | 2,709 | 15.0% |
| Long Term Debt | 540 | 2,369 | 2,989 | 1,273 | 1,285 | 1.0% |
Cash flow
|
|---|
| Capex | 5 | 5 | 6 | 10 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 29.6% | 15.9% | 19.2% | 12.5% | 10.3% | |
| EBITDA growth | 48.0% | 9.8% | 17.3% | 13.2% | -4.6% | |
| Gross Margin | 31.6% | 30.2% | 30.6% | 30.5% | 29.5% | -1.1% |
| EBITDA Margin | 25.5% | 24.2% | 23.8% | 24.0% | 20.7% | -3.2% |
| Net Income Margin | 18.1% | 16.1% | 13.7% | 14.1% | 11.6% | -2.5% |
| SG&A, % of revenue | 6.3% | 5.9% | 5.5% | 5.6% | 6.4% | 0.8% |
| CAPEX, % of revenue | 0.2% | 0.2% | 0.2% | 0.3% | | -0.3% |
| ROIC | 15.0% | 12.8% | 11.5% | 10.8% | 9.3% | -1.5% |
| ROE | 19.6% | 17.3% | 15.0% | 13.6% | 10.2% | -3.5% |
| Net Debt/EBITDA | -0.7x | -0.1x | 0.3x | 1.9x | 2.8x | 0.8x |
Revenue and profitability
The company's Revenue jumped on 10.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.9 pp from 41.4% to 35.4% in 2015.
Gross Margin decreased slightly on 1.1 pp from 30.5% to 29.5% in FY2015. SG&A as a % of Revenue increased slightly on 0.81 pp from 5.6% to 6.4% in FY2015.
Net Income marign decreased on 2.5 pp from 14.1% to 11.6% in FY2015.
Return on investment
The company operates at low ROIC (9.28%) and ROE (10.17%). ROIC decreased slightly on 1.5 pp from 10.8% to 9.3% in FY2015. ROE decreased on 3.5 pp from 13.6% to 10.2% in FY2015.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 4.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.8x from 1.9x to 2.8x in FY2015. Debt jumped on 10.1% in FY2015 while cash dropped on 12.5% in FY2015.
Appendix 1: Peers in Environmental Control
Below you can find Sound Global Ltd benchmarking vs. other companies in Environmental Control 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 |
|---|
| Sky Forever Supply Chain Management Group Ltd ($8047) | | -73.4% | 446.4% | -62.3% | 12,494.5% |
| Pan Asia Environmental Protection Group Ltd ($556) | | -13.7% | 43.1% | -1.8% | 85.0% |
| CT Environmental Group Ltd ($1363) | | -18.7% | 23.1% | 112.9% | 75.4% |
| ELL Environmental Holdings Ltd ($1395) | | 5.3% | 38.8% | 30.9% | 70.8% |
| Ozner Water International Holding Ltd ($2014) | | 183.9% | 38.5% | 27.2% | 45.7% |
| |
|---|
| Median (24 companies) | | -0.2% | 18.1% | 23.6% | 3.1% |
|---|
| Sound Global Ltd ($967) | | 15.9% | 19.2% | 12.5% | 10.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EverChina International Holdings Co Ltd ($202) | 40.2% | 51.8% | 53.4% | 95.3% | 95.4% |
| Ozner Water International Holding Ltd ($2014) | 56.7% | 64.5% | 67.8% | 65.4% | 58.9% |
| CT Environmental Group Ltd ($1363) | 57.7% | 65.8% | 63.1% | 56.4% | 49.9% |
| Kangda International Environmental Co Ltd ($6136) | 46.0% | 44.2% | 38.3% | 40.0% | 47.6% |
| China Water Affairs Group Ltd ($855) | 42.7% | 44.0% | 43.1% | 41.8% | 47.3% |
| |
|---|
| Median (23 companies) | 37.9% | 39.0% | 30.5% | 32.2% | 34.1% |
|---|
| Sound Global Ltd ($967) | 31.6% | 30.2% | 30.6% | 30.5% | 29.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 52.2% | 63.6% | 62.8% | 58.7% | 64.6% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 55.9% | 57.5% | 56.6% | 57.8% | 57.9% |
| China Everbright International Ltd ($257) | 37.3% | 44.6% | 40.7% | 43.6% | 44.1% |
| China Water Affairs Group Ltd ($855) | 38.8% | 38.2% | 38.1% | 37.1% | 40.3% |
| Kangda International Environmental Co Ltd ($6136) | 37.9% | 37.1% | 33.6% | 32.4% | 36.6% |
| |
|---|
| Median (24 companies) | 10.3% | 9.9% | 10.8% | 3.1% | 13.1% |
|---|
| Sound Global Ltd ($967) | 25.5% | 24.2% | 23.8% | 24.0% | 20.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chaoyue Group Ltd ($147) | 3.8% | | 18.1% | 9.2% | 100.9% |
| Ozner Water International Holding Ltd ($2014) | 179.8% | 94.9% | 102.2% | 148.5% | 90.9% |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 25.4% | 13.2% | 10.6% | 41.7% | 88.1% |
| Green Energy Group Ltd ($979) | 7.5% | 169.0% | 270.8% | 41.9% | 59.0% |
| CT Environmental Group Ltd ($1363) | 31.8% | 65.0% | 27.1% | 51.4% | 40.5% |
| |
|---|
| Median (24 companies) | 10.8% | 12.9% | 13.0% | 8.8% | 5.5% |
|---|
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 34.4% | 25.9% | 20.5% | 20.8% | 20.1% |
| China Everbright International Ltd ($257) | 11.1% | 10.4% | 11.2% | 10.5% | 10.8% |
| Baguio Green Group Ltd ($1397) | | 20.1% | 29.2% | 9.6% | 9.0% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 7.4% | 7.1% | 6.8% | 7.8% | 8.8% |
| Kangda International Environmental Co Ltd ($6136) | | 12.5% | 11.8% | 10.7% | 8.8% |
| |
|---|
| Median (24 companies) | 2.3% | 0.5% | 4.0% | 2.5% | 3.2% |
|---|
| Sound Global Ltd ($967) | 15.0% | 12.8% | 11.5% | 10.8% | 9.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kangda International Environmental Co Ltd ($6136) | 5.1x | 4.4x | 5.1x | 4.8x | 5.2x |
| China Water Affairs Group Ltd ($855) | 2.8x | 2.6x | 2.7x | 3.2x | 3.4x |
| Dynagreen Environmental Protection Group Co Ltd ($1330) | 0.4x | 3.2x | | | 3.2x |
| China Everbright International Ltd ($257) | 2.8x | 2.1x | 0.5x | 1.5x | 2.6x |
| Dongjiang Environmental Co Ltd ($895) | 1.0x | -1.7x | -1.5x | 0.9x | 2.5x |
| |
|---|
| Median (15 companies) | 1.2x | 2.3x | 0.4x | 0.9x | 1.2x |
|---|
| Sound Global Ltd ($967) | -0.7x | -0.1x | 0.3x | 1.9x | 2.8x |
