Wisdom Holdings Group reports 81.7% Net Income decline and 34.6 pp EBITDA Margin decline from 44.4% to 9.8%
31/03/2016 • About Wisdom Holdings Group (
$1661) • By InTwits
Wisdom Holdings Group reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.8% in 2015, 44.4% in 2014, 45.1% in 2013, 32.4% in 2012, 25.0% in 2011
- Wisdom Holdings Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has potentially unprofitable business model: ROIC is at 5.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wisdom Holdings Group ($1661) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 471.4 | 557.2 | 694.3 | 804.3 | 681.4 | -15.3% |
| Gross Profit | 145.2 | 217.0 | 342.8 | 374.1 | 181.9 | -51.4% |
| SG&A | 30.9 | 40.9 | 61.8 | 72.7 | 143.7 | 97.6% |
| EBITDA | 118.0 | 180.6 | 313.3 | 357.2 | 67.0 | -81.2% |
| Net Income | 85.6 | 131.9 | 231.5 | 278.0 | 50.8 | -81.7% |
Balance Sheet
|
|---|
| Cash | 136.5 | 99.5 | 819.9 | 598.5 | 522.3 | -12.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 4.3 | 2.9 | 4.8 | 4.2 | 3.3 | -20.7% |
Ratios
|
|---|
| Revenue growth | 58.1% | 18.2% | 24.6% | 15.8% | -15.3% | |
| EBITDA growth | 47.7% | 53.0% | 73.4% | 14.0% | -81.2% | |
| Gross Margin | 30.8% | 38.9% | 49.4% | 46.5% | 26.7% | -19.8% |
| EBITDA Margin | 25.0% | 32.4% | 45.1% | 44.4% | 9.8% | -34.6% |
| Net Income Margin | 18.2% | 23.7% | 33.3% | 34.6% | 7.5% | -27.1% |
| SG&A, % of revenue | 6.6% | 7.3% | 8.9% | 9.0% | 21.1% | 12.0% |
| CAPEX, % of revenue | 0.9% | 0.5% | 0.7% | 0.5% | 0.5% | -0.0% |
| ROIC | 62.7% | 68.6% | 42.1% | 28.8% | 5.1% | -23.7% |
| ROE | 48.9% | 54.9% | 34.2% | 24.5% | 4.4% | -20.1% |
| Net Debt/EBITDA | -1.2x | -0.6x | -2.6x | -1.7x | -7.8x | -6.1x |
Revenue and profitability
The company's Revenue dropped on 15.3% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 34.6 pp from 44.4% to 9.8% in 2015.
Gross Margin dropped on 19.8 pp from 46.5% to 26.7% in 2015. SG&A as a % of Revenue jumped on 12.0 pp from 9.0% to 21.1% in 2015.
Net Income marign dropped on 27.1 pp from 34.6% to 7.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Wisdom Holdings Group had CAPEX/Revenue of 0.49%. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 0.57%.
Return on investment
The company operates at low ROIC (5.10%) and ROE (4.41%). ROIC dropped on 23.7 pp from 28.8% to 5.1% in 2015. ROE dropped on 20.1 pp from 24.5% to 4.4% in 2015.
Leverage (Debt)
The company has no debt. Cash dropped on 12.7% in 2015.
Appendix 1: Peers in Holding Companies-Divers
Below we provide Wisdom Holdings Group benchmarking against other companies in Holding Companies-Divers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Beijing Development HK Ltd ($154) | | 12.5% | | | 1,048.9% |
| CIAM Group Ltd ($378) | | -62.2% | 47.9% | -40.0% | 211.5% |
| Melco International Development Ltd ($200) | | 16.5% | 21.7% | 3.0% | 134.9% |
| New Century Group Hong Kong Ltd ($234) | | -68.9% | 326.7% | -70.3% | 118.2% |
| Greater China Holdings Ltd ($431) | | -35.8% | -72.1% | 67.3% | 110.3% |
| |
|---|
| Median (41 companies) | -3.5% | 11.4% | 3.3% | 12.6% | 7.2% |
|---|
| Wisdom Holdings Group ($1661) | | 18.2% | 24.6% | 15.8% | -15.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| New Century Group Hong Kong Ltd ($234) | 76.7% | 27.3% | 85.2% | 82.8% | 91.5% |
| Melco International Development Ltd ($200) | 72.0% | 63.1% | 52.9% | 54.5% | 79.4% |
| CIAM Group Ltd ($378) | | | | | 75.8% |
| Emperor International Holdings Ltd ($163) | 74.5% | 71.3% | 64.9% | 79.2% | 75.3% |
| Heng Fai Enterprises Ltd ($185) | 89.3% | 89.0% | 89.5% | 58.3% | 74.7% |
| |
|---|
| Median (37 companies) | 27.9% | 32.9% | 34.6% | 30.8% | 37.5% |
|---|
| Wisdom Holdings Group ($1661) | 30.8% | 38.9% | 49.4% | 46.5% | 26.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| New Century Group Hong Kong Ltd ($234) | 82.5% | -5.5% | 78.8% | 58.3% | 85.0% |
| Emperor International Holdings Ltd ($163) | 224.8% | 180.7% | 131.8% | 100.6% | 73.9% |
| Pioneer Global Group Ltd ($224) | 111.2% | -0.5% | -9.9% | -11.6% | 64.3% |
| C C Land Holdings Ltd ($1224) | 22.0% | 27.0% | 23.6% | 24.6% | 55.7% |
| China Merchants Holdings International Co Ltd ($144) | 63.7% | 56.4% | 50.8% | 45.2% | 55.7% |
| |
|---|
| Median (41 companies) | 5.2% | 1.7% | 1.9% | 5.6% | 4.8% |
|---|
| Wisdom Holdings Group ($1661) | 25.0% | 32.4% | 45.1% | 44.4% | 9.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Heng Fai Enterprises Ltd ($185) | 217.5% | 4.8% | 77.1% | 310.0% | 458.1% |
| Chinney Investments Ltd ($216) | 37.6% | 17.5% | 103.4% | 111.3% | 230.9% |
| China Investments Holdings Ltd ($132) | 20.7% | 4.8% | 81.9% | 382.2% | 222.5% |
| Goldin Properties Holdings Ltd ($283) | | 2,178.4% | 1,190.0% | 50.1% | 202.4% |
| Emperor International Holdings Ltd ($163) | 93.5% | 100.9% | 48.5% | 105.9% | 110.6% |
| |
|---|
| Median (41 companies) | 4.9% | 2.7% | 3.8% | 7.0% | 9.2% |
|---|
| Wisdom Holdings Group ($1661) | 0.9% | 0.5% | 0.7% | 0.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| C C Land Holdings Ltd ($1224) | 4.5% | 7.4% | 5.3% | 7.9% | 15.0% |
| Chinney Alliance Group Ltd ($385) | 3.4% | 6.4% | 8.1% | 13.6% | 15.0% |
| Top Spring International Holdings Ltd ($3688) | 27.9% | 15.6% | 6.9% | 7.3% | 8.0% |
| New Century Group Hong Kong Ltd ($234) | 8.6% | -1.7% | 11.7% | 1.7% | 7.3% |
| Chuang's China Investments Ltd ($298) | -0.9% | 22.9% | 1.5% | 2.2% | 6.1% |
| |
|---|
| Median (41 companies) | 0.3% | -0.2% | -0.2% | 0.5% | 0.2% |
|---|
| Wisdom Holdings Group ($1661) | 62.7% | 68.6% | 42.1% | 28.8% | 5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinney Investments Ltd ($216) | 111.3x | 10.3x | 63.7x | 48.6x | 93.7x |
| Multifield International Holdings Ltd ($898) | 12.0x | 3.2x | 7.3x | 3.0x | 55.9x |
| CIAM Group Ltd ($378) | -48.0x | | | | 32.6x |
| Chuang's Consortium International Ltd ($367) | 2.2x | 0.7x | 5.0x | | 23.9x |
| Pioneer Global Group Ltd ($224) | 7.9x | | | | 10.9x |
| |
|---|
| Median (22 companies) | 3.1x | 2.6x | 3.1x | 3.2x | 2.9x |
|---|
| Wisdom Holdings Group ($1661) | -1.2x | -0.6x | -2.6x | -1.7x | -7.8x |
