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Oi Wah Pawnshop Credit Holdings Ltd demonstrated healthy growth over the last few years

01/06/2016 • About Oi Wah Pawnshop Credit Holdings Ltd ($1319) • By InTwits

Oi Wah Pawnshop Credit Holdings Ltd is a fast-growing stock in Diversified Finan Serv industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Oi Wah Pawnshop Credit Holdings Ltd showed fast growth in the last financial year. The company's revenue surged on 22.0% in FY2016. At the same time Oi Wah Pawnshop Credit Holdings Ltd well managed its profitability and showed even faster growth in EBITDA of 22.4% for the same period.

In the last 3 years the company showed fast revenue growth of 37.7% from FY2013 to FY2016 annualy. EBITDA surged on 45.8% from FY2013 to FY2016 annualy.

Oi Wah Pawnshop Credit Holdings Ltd ($1319) financials for the last 5 years

mln. HKD FY2012 FY2013 FY2014 FY2015 FY2016
Revenue6773100157191
Revenue growth, %9.0%36.5%56.6%22.0%
SG&A, %
EBITDA404361108133
EBITDA growth, %5.9%41.8%78.6%22.4%
EBITDA margin, %60.0%58.3%60.6%69.0%69.3%
Net Income3323418091
Net Income margin, % 49.6%31.0%41.0%51.1%47.8%
 
CAPEX01000
CAPEX/Revenue, %0.645%0.934%0.165%0.151%0.0523%
Debt469194288446
Cash1020124749
Net Debt/EBITDA-0.2x1.1x3.0x2.2x3.0x
 
ROIC, %32.7%20.7%14.0%15.3%12.5%
ROE, %28.1%13.8%15.9%20.6%16.3%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. Oi Wah Pawnshop Credit Holdings Ltd showed almost no change in EBITDA margin of 0.300 pp from 69% to 69.3% in FY2016. In the last 3 years the company showed fast EBITDA margin growth of 11 pp from 58.3% in FY2013 to 69.3% in FY2016.

We call Oi Wah Pawnshop Credit Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 12.5%. Three years ago it was higher at 20.7%. It's average ROIC for the last three years was 13.9%.

The company's Net Income margin decreased on 3.30 pp from 51.1% to 47.8% in FY2016. In the last 3 years Oi Wah Pawnshop Credit Holdings Ltd's Net Income margin surged on 16.8 pp from 31% in FY2013 to 47.8% in FY2016.

Oi Wah Pawnshop Credit Holdings Ltd operates at ROE of 16.3%. Average ROE for the last three years was 17.6%.

Capital expenditures (CAPEX)


Oi Wah Pawnshop Credit Holdings Ltd's CAPEX/Revenue was 0.0523% in FY2016. Oi Wah Pawnshop Credit Holdings Ltd's CAPEX/Revenue dropped on 0.882 pp from 0.934% in FY2013 to 0.0523% in FY2016. It's average CAPEX/Revenue for the last three years was 0.123%.

Leverage (Debt)


Having such a fast growth profile Oi Wah Pawnshop Credit Holdings Ltd keeps medium debt level at 3.0x Net Debt/EBITDA. In the last 3 years Oi Wah Pawnshop Credit Holdings Ltd's leverage surged on 1.85x from 1.15x in FY2013 to 2.99x in FY2016.

Valuation vs. comparable companies


At the end of trading day today Oi Wah Pawnshop Credit Holdings Ltd traded at 10.3x EV/EBITDA which is 68.9% lower than 33.1x Diversified Finan Serv peer group avearge calculated on the basis of 72 companies. At the end of trading day today Oi Wah Pawnshop Credit Holdings Ltd traded at 10.6x P/E which is 86.5% lower than 78.1x Diversified Finan Serv peer group avearge calculated on the basis of 19 companies.

Peers in Diversified Finan Serv


Below you can find Oi Wah Pawnshop Credit Holdings Ltd benchmarking vs. other companies in Diversified Finan Serv 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
China Smarter Energy Group Holdings Ltd ($1004)-4.0%-23.1%-87.3%1,860.5%
Crown International Corp Ltd ($727)225.8%-75.0%117.4%802.5%
Global Strategic Group Ltd ($8007)-3.9%2.1%806.3%681.2%
Upbest Group Ltd ($335)-38.5%-61.8%24.1%208.1%
GF Securities Co Ltd ($1776)16.3%31.8%75.0%163.9%
 
Median (64 companies)4.5%19.3%26.5%24.0%17.8%
Oi Wah Pawnshop Credit Holdings Ltd ($1319)9.0%36.5%56.6%22.0%


Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Roma Group Ltd ($8072)99.4%98.7%
First China Financial Network Holdings Ltd ($8123)93.4%94.5%97.4%
China Smarter Energy Group Holdings Ltd ($1004)6.2%4.0%46.9%96.9%
Chinese Strategic Holdings Ltd ($8089)99.1%97.9%97.0%96.6%
Allied Group Ltd ($373)95.1%94.4%93.6%92.2%
 
Median (12 companies)64.2%75.1%88.2%90.3%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
China Smarter Energy Group Holdings Ltd ($1004)-282.7%-373.2%-1,524.9%212.2%
China Aircraft Leasing Group Holdings Ltd ($1848)91.3%86.4%92.9%107.0%
Get Nice Holdings Ltd ($64)2.6%153.4%92.7%83.9%
Hong Kong Exchanges and Clearing Ltd ($388)81.6%73.4%75.7%82.1%
Hong Kong Finance Group Co Ltd ($1273)76.9%67.5%65.2%74.8%
 
Median (66 companies)18.8%36.2%47.2%31.4%39.2%
Oi Wah Pawnshop Credit Holdings Ltd ($1319)60.0%58.3%60.6%69.0%69.3%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
China Aircraft Leasing Group Holdings Ltd ($1848)351.0%0.1%33.3%64.6%
Willie International Holdings Ltd ($273)0.3%0.8%58.0%
China Assurance Finance Group Ltd ($8090)94.7%68.9%53.3%51.0%
AID Partners Capital Holdings Ltd ($8088)4.1%2.9%28.4%26.6%
Hongkong Chinese Ltd ($655)0.1%25.6%
 
Median (65 companies)2.1%1.9%1.1%1.5%0.8%
Oi Wah Pawnshop Credit Holdings Ltd ($1319)0.6%0.9%0.2%0.2%0.1%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Hong Kong Exchanges and Clearing Ltd ($388)29.1%20.1%21.5%29.1%
China Smarter Energy Group Holdings Ltd ($1004)-19.4%-23.0%-14.0%22.5%
Emperor Capital Group Ltd ($717)5.1%12.8%13.1%14.6%
Roma Group Ltd ($8072)19.6%43.7%107.8%13.3%9.8%
Orient Securities International Holdings Ltd ($8001)10.6%13.3%12.1%12.4%
 
Median (69 companies)3.9%4.0%4.8%3.5%8.2%
Oi Wah Pawnshop Credit Holdings Ltd ($1319)32.7%20.7%14.0%15.3%12.5%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Hoifu Energy Group Ltd ($7)62.5x
South China Financial Holdings Ltd ($619)56.9x
Bright Smart Securities & Commodities Group Ltd ($1428)2.1x10.3x9.3x39.3x
Far East Horizon Ltd ($3360)16.9x21.7x20.0x20.8x
Quam Ltd ($952)58.9x15.9x4.1x14.8x
 
Median (49 companies)-0.7x0.1x-0.1x-0.1x3.0x
Oi Wah Pawnshop Credit Holdings Ltd ($1319)-0.2x1.1x3.0x2.2x3.0x