Skyworth Digital Holdings Ltd Net Income dropped on 30.6% in 2016 and EBITDA Margin decreased on 2.9 pp from 11.3% to 8.5%
14/06/2016 • About Skyworth Digital Holdings Ltd (
$751) • By InTwits
Skyworth Digital Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Skyworth Digital Holdings Ltd is a growth stock: FY2016 revenue growth was 6.4%, 5 year revenue CAGR was 11.9% at FY2016 ROIC 13.7%
- Skyworth Digital Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 780 in FY2016, 676 in FY2015, 566 in FY2014, 388 in FY2013, 307 in FY2012
- The company has highly profitable business model: ROIC is at 13.7%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is -0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Skyworth Digital Holdings Ltd ($751) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 28,137 | 37,824 | 39,480 | 40,135 | 42,695 | 6.4% |
| Gross Profit | 5,956 | 7,406 | 7,629 | 8,023 | 9,363 | 16.7% |
| SG&A | 4,492 | 5,599 | 5,989 | 5,957 | 6,115 | 2.7% |
| EBITDA | 1,702 | 2,293 | 2,236 | 4,538 | 3,608 | -20.5% |
| Net Income | 1,252 | 1,501 | 1,254 | 3,128 | 2,170 | -30.6% |
Balance Sheet
|
|---|
| Cash | 2,164 | 2,301 | 3,023 | 3,317 | 5,023 | 51.4% |
| Short Term Debt | 3,568 | 5,581 | 5,156 | 1,274 | 4,950 | 288.5% |
| Long Term Debt | 715 | 225 | 547 | 1,312 | 3,155 | 140.5% |
Cash flow
|
|---|
| Capex | 839 | 1,111 | 1,939 | 1,161 | 1,655 | 42.5% |
Ratios
|
|---|
| Revenue growth | 15.6% | 34.4% | 4.4% | 1.7% | 6.4% | |
| EBITDA growth | -0.2% | 34.7% | -2.5% | 103.0% | -20.5% | |
| Gross Margin | 21.2% | 19.6% | 19.3% | 20.0% | 21.9% | 1.9% |
| EBITDA Margin | 6.0% | 6.1% | 5.7% | 11.3% | 8.5% | -2.9% |
| Net Income Margin | 4.4% | 4.0% | 3.2% | 7.8% | 5.1% | -2.7% |
| SG&A, % of revenue | 16.0% | 14.8% | 15.2% | 14.8% | 14.3% | -0.5% |
| CAPEX, % of revenue | 3.0% | 2.9% | 4.9% | 2.9% | 3.9% | 1.0% |
| ROIC | 11.6% | 13.4% | 10.9% | 23.0% | 13.7% | -9.4% |
| ROE | 16.1% | 16.3% | 12.1% | 25.5% | 15.1% | -10.4% |
| Net Debt/EBITDA | 1.2x | 1.5x | 1.2x | -0.2x | 0.9x | 1.0x |
Revenue and profitability
The company's Revenue increased on 6.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 62.8% to 64.0% in 2016.
Gross Margin increased slightly on 1.9 pp from 20.0% to 21.9% in FY2016. SG&A as a % of Revenue decreased slightly on 0.52 pp from 14.8% to 14.3% in FY2016.
Net Income marign decreased on 2.7 pp from 7.8% to 5.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.9%. CAPEX/Revenue increased slightly on 0.94 pp from 2.9% in FY2013 to 3.9% in FY2016. For the last three years the average CAPEX/Revenue was 3.9%.
Return on investment
The company operates at good ROIC (13.66%) and ROE (15.05%). ROIC decreased on 9.4 pp from 23.0% to 13.7% in FY2016. ROE dropped on 10.4 pp from 25.5% to 15.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 2.2x. Net Debt / EBITDA jumped on 1.0x from -0.2x to 0.9x in FY2016. Debt jumped on 213% while cash jumped on 51.4%.
Management team
The company's CEO is Yang Dongwen. Yang Dongwen has 6 years tenure at the company.
Appendix 1: Peers in Home Furnishings
Below you can find Skyworth Digital Holdings Ltd benchmarking vs. other companies in Home Furnishings 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 |
|---|
| BEP International Holdings Ltd ($2326) | 44.7% | -41.5% | 46.2% | 187.9% | |
| See Corp Ltd ($491) | 13.7% | -31.9% | 134.1% | 126.9% | |
| Sunrise China Technology Group Ltd ($8226) | -93.0% | 21.9% | -20.4% | 77.5% | |
| Yuxing InfoTech Investment Holdings Ltd ($8005) | 29.6% | -21.2% | -16.5% | 21.3% | |
| Aupu Group Holding Co Ltd ($477) | 5.7% | 9.0% | 26.4% | 18.5% | |
| |
|---|
| Median (26 companies) | -0.2% | 5.4% | 1.1% | -1.6% | |
|---|
| Skyworth Digital Holdings Ltd ($751) | | 34.4% | 4.4% | 1.7% | 6.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| South East Group Ltd ($726) | 25.5% | 51.6% | 38.8% | 82.4% | |
| Aupu Group Holding Co Ltd ($477) | 48.6% | 45.0% | 47.8% | 48.7% | |
| Grande Holdings Ltd/The ($186) | 23.7% | 25.4% | 29.0% | 27.7% | |
| Samson Holding Ltd ($531) | 25.6% | 25.4% | 27.3% | 27.3% | |
| Gold Peak Industries Holding Ltd ($40) | 25.8% | 23.6% | 24.9% | 25.6% | |
| |
|---|
| Median (26 companies) | 17.3% | 16.8% | 15.9% | 15.7% | |
|---|
| Skyworth Digital Holdings Ltd ($751) | 21.2% | 19.6% | 19.3% | 20.0% | 21.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aupu Group Holding Co Ltd ($477) | 15.3% | 17.6% | 30.1% | 27.0% | |
| Welling Holding Ltd ($382) | 11.9% | 12.8% | 10.8% | 8.6% | |
| Hing Lee HK Holdings Ltd ($396) | -3.0% | 4.3% | 9.4% | 8.2% | |
| Raymond Industrial Ltd ($229) | 7.6% | 7.7% | 7.8% | 6.3% | |
| Allan International Holdings ($684) | 8.0% | 7.6% | 7.6% | 6.3% | |
| |
|---|
| Median (25 companies) | 4.9% | 4.5% | 4.5% | 3.2% | |
|---|
| Skyworth Digital Holdings Ltd ($751) | 6.0% | 6.1% | 5.7% | 11.3% | 8.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| JF Household Furnishings Ltd ($776) | 0.7% | 4.5% | 2.8% | 54.5% | |
| Sunrise China Technology Group Ltd ($8226) | 126.4% | 69.3% | 7.4% | 14.1% | |
| Royale Furniture Holdings Ltd ($1198) | | 14.1% | 16.5% | 10.5% | |
| South East Group Ltd ($726) | 0.0% | 0.0% | 0.0% | 7.9% | |
| Aupu Group Holding Co Ltd ($477) | 1.5% | 6.3% | 5.3% | 5.7% | |
| |
|---|
| Median (26 companies) | 1.5% | 1.9% | 2.7% | 2.1% | |
|---|
| Skyworth Digital Holdings Ltd ($751) | 3.0% | 2.9% | 4.9% | 2.9% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aupu Group Holding Co Ltd ($477) | 14.8% | 17.0% | 32.2% | 32.2% | |
| Mastercraft International Holdings Ltd ($8146) | 54.4% | 38.6% | 36.4% | 23.2% | |
| BEP International Holdings Ltd ($2326) | 90.3% | 4.7% | -4.5% | 17.6% | |
| Tonly Electronics Holdings Ltd ($1249) | 4.2% | 7.1% | 15.9% | 11.7% | |
| Welling Holding Ltd ($382) | 23.5% | 24.3% | 18.7% | 10.7% | |
| |
|---|
| Median (26 companies) | 3.7% | 4.4% | 3.9% | 1.5% | |
|---|
| Skyworth Digital Holdings Ltd ($751) | 11.6% | 13.4% | 10.9% | 23.0% | 13.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kasen International Holdings Ltd ($496) | 2.2x | 3.7x | 44.9x | 20.1x | |
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 1.2x | 0.9x | 1.0x | 6.4x | |
| Gold Peak Industries Holding Ltd ($40) | 10.2x | 3.4x | 3.6x | 2.8x | |
| TCL Multimedia Technology Holdings Ltd ($1070) | -0.3x | -2.3x | 0.7x | 0.5x | |
| Aupu Group Holding Co Ltd ($477) | -0.2x | 0.7x | 0.6x | -0.2x | |
| |
|---|
| Median (16 companies) | -0.3x | -1.1x | -1.9x | -1.3x | |
|---|
| Skyworth Digital Holdings Ltd ($751) | 1.2x | 1.5x | 1.2x | -0.2x | 0.9x |
