Hanison Construction Holdings Ltd Net Income jumped on 51.6% and Revenue jumped on 25.2%
08/06/2016 • About Hanison Construction Holdings Ltd (
$896) • By InTwits
Hanison Construction Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.3% in FY2016, 7.6% in FY2015, 2.8% in FY2014, 6.9% in FY2013, 3.0% in FY2012
- Hanison Construction Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's in pair with industry average of 6.7%.
- CAPEX is quite volatile: 31.6 in FY2016, 13.5 in FY2015, 6.9 in FY2014, 341 in FY2013, 2.9 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hanison Construction Holdings Ltd ($896) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,235 | 1,554 | 1,627 | 2,095 | 2,623 | 25.2% |
| Gross Profit | 164 | 264 | 249 | 387 | 379 | -2.3% |
| SG&A | | 166 | 158 | 236 | 294 | 24.4% |
| EBITDA | 37 | 107 | 46 | 160 | 112 | -29.9% |
| Net Income | 128 | 188 | 156 | 419 | 636 | 51.6% |
Balance Sheet
|
|---|
| Cash | 185 | 293 | 323 | 301 | 1,221 | 305.5% |
| Short Term Debt | 734 | 811 | 699 | 691 | 765 | 10.6% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 3 | 341 | 7 | 14 | 32 | 133.9% |
Ratios
|
|---|
| Revenue growth | 70.7% | 25.9% | 4.6% | 28.8% | 25.2% | |
| EBITDA growth | -201.9% | 188.8% | -56.8% | 247.2% | -29.9% | |
| Gross Margin | 13.3% | 17.0% | 15.3% | 18.5% | 14.4% | -4.1% |
| EBITDA Margin | 3.0% | 6.9% | 2.8% | 7.6% | 4.3% | -3.4% |
| Net Income Margin | 10.4% | 12.1% | 9.6% | 20.0% | 24.2% | 4.2% |
| SG&A, % of revenue | | 10.7% | 9.7% | 11.3% | 11.2% | -0.1% |
| CAPEX, % of revenue | 0.2% | 21.9% | 0.4% | 0.6% | 1.2% | 0.6% |
| ROIC | 1.9% | 5.2% | 1.9% | 6.7% | 3.5% | -3.2% |
| ROE | 12.9% | 16.6% | 12.1% | 27.1% | 28.6% | 1.5% |
| Net Debt/EBITDA | 14.9x | 4.9x | 8.2x | 2.4x | -4.1x | -6.5x |
Revenue and profitability
The company's Revenue jumped on 25.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.7 pp from 17.5% to 13.8% in FY2016.
Gross Margin decreased on 4.1 pp from 18.5% to 14.4% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased on 4.2 pp from 20.0% to 24.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Hanison Construction Holdings Ltd's CAPEX/Revenue was 1.2% in FY2016. Hanison Construction Holdings Ltd showed big decline in CAPEX/Revenue of 20.7 pp from 21.9% in FY2013 to 1.2% in FY2016. For the last three years the average CAPEX/Revenue was 0.76%.
Return on investment
The company operates at good ROE (28.63%) while ROIC is low (3.52%). ROIC decreased on 3.2 pp from 6.7% to 3.5% in FY2016. ROE increased slightly on 1.5 pp from 27.1% to 28.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -4.1x and Debt / EBITDA is 6.8x. Net Debt / EBITDA dropped on 6.5x from 2.4x to -4.1x in FY2016. Debt surged on 10.6% while cash surged on 305%.
Appendix 1: Peers in Engineering&Construction
Below you can find Hanison Construction Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | -39.1% | -76.8% | -55.8% | 592.3% | |
| Vision Fame International Holding Ltd ($1315) | -9.9% | 45.9% | -10.5% | 105.6% | |
| Sino Credit Holdings Ltd ($628) | -13.8% | | | 97.4% | |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (40 companies) | 12.7% | 22.8% | 20.8% | 9.9% | 14.3% |
|---|
| Hanison Construction Holdings Ltd ($896) | | 25.9% | 4.6% | 28.8% | 25.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | |
| China National Culture Group Ltd ($745) | 0.9% | 12.1% | 10.3% | 32.3% | |
| Kingbo Strike Ltd ($1421) | 32.4% | 44.4% | 40.3% | 30.7% | |
| |
|---|
| Median (35 companies) | 17.5% | 15.3% | 15.4% | 15.6% | 17.5% |
|---|
| Hanison Construction Holdings Ltd ($896) | 13.3% | 17.0% | 15.3% | 18.5% | 14.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | |
| |
|---|
| Median (40 companies) | 10.0% | 9.6% | 9.1% | 8.3% | 16.9% |
|---|
| Hanison Construction Holdings Ltd ($896) | 3.0% | 6.9% | 2.8% | 7.6% | 4.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | |
| |
|---|
| Median (40 companies) | 2.5% | 2.5% | 1.7% | 2.1% | 14.0% |
|---|
| Hanison Construction Holdings Ltd ($896) | 0.2% | 21.9% | 0.4% | 0.6% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | |
| Broad Greenstate International Co Ltd ($1253) | 33.2% | 85.1% | 51.2% | 26.0% | |
| China Saite Group Co Ltd ($153) | 64.0% | 53.2% | 35.3% | 24.5% | |
| CNQC International Holdings Ltd ($1240) | 12.2% | 22.3% | 40.4% | 21.8% | |
| |
|---|
| Median (42 companies) | 6.5% | 5.4% | 4.1% | 3.1% | 4.7% |
|---|
| Hanison Construction Holdings Ltd ($896) | 1.9% | 5.2% | 1.9% | 6.7% | 3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (34 companies) | 0.9x | 0.3x | 0.4x | 2.1x | 5.8x |
|---|
| Hanison Construction Holdings Ltd ($896) | 14.9x | 4.9x | 8.2x | 2.4x | -4.1x |
