Chun Wo Development Holdings Ltd Net Debt / EBITDA dropped on 5.3x from 15.9x to 10.5x in 2016 while EBITDA jumped on 30.8%
15/06/2016 • About Chun Wo Development Holdings Ltd (
$711) • By InTwits
Chun Wo Development 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: 1.9% in FY2016, 1.5% in FY2015, 2.0% in FY2014, 3.8% in FY2013, 2.3% in FY2012
- Chun Wo Development Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has potentially unprofitable business model: ROIC is at 3.4%
- It operates with high leverage: Net Debt/EBITDA is 10.5x while industry average is 3.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chun Wo Development Holdings Ltd ($711) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,193 | 4,892 | 6,551 | 8,317 | 8,542 | 2.7% |
| Gross Profit | 229 | 440 | 415 | 471 | 489 | 3.7% |
| SG&A | 238 | 305 | 314 | 359 | 378 | 5.2% |
| EBITDA | 74 | 184 | 130 | 122 | 159 | 30.8% |
| Net Income | 52 | 78 | 93 | 103 | 302 | 194.5% |
Balance Sheet
|
|---|
| Cash | 415 | 608 | 821 | 703 | 1,005 | 43.1% |
| Short Term Debt | 1,258 | 1,747 | 2,199 | 2,320 | 1,740 | -25.0% |
| Long Term Debt | 213 | 359 | 260 | 313 | 945 | 201.9% |
Cash flow
|
|---|
| Capex | 10 | 43 | 60 | 39 | 32 | -19.4% |
Ratios
|
|---|
| Revenue growth | 6.4% | 53.2% | 33.9% | 27.0% | 2.7% | |
| EBITDA growth | -323.1% | 149.6% | -29.5% | -6.4% | 30.8% | |
| Gross Margin | 7.2% | 9.0% | 6.3% | 5.7% | 5.7% | 0.1% |
| EBITDA Margin | 2.3% | 3.8% | 2.0% | 1.5% | 1.9% | 0.4% |
| Net Income Margin | 1.6% | 1.6% | 1.4% | 1.2% | 3.5% | 2.3% |
| SG&A, % of revenue | 7.5% | 6.2% | 4.8% | 4.3% | 4.4% | 0.1% |
| CAPEX, % of revenue | 0.3% | 0.9% | 0.9% | 0.5% | 0.4% | -0.1% |
| ROIC | 2.3% | 5.0% | 3.1% | 2.7% | 3.4% | 0.7% |
| ROE | 3.7% | 5.2% | 5.9% | 6.4% | 17.3% | 11.0% |
| Net Debt/EBITDA | 14.3x | 8.1x | 12.6x | 15.9x | 10.5x | -5.3x |
Revenue and profitability
Chun Wo Development Holdings Ltd's Revenue increased on 2.7%. EBITDA Margin showed almost no change in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased on 2.3 pp from 1.2% to 3.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Chun Wo Development Holdings Ltd had CAPEX/Revenue of 0.37%. CAPEX/Revenue decreased slightly on 0.52 pp from 0.89% in FY2013 to 0.37% in FY2016. It's average CAPEX/Revenue for the last three years was 0.59%.
Return on investment
The company operates at good ROE (17.32%) while ROIC is low (3.39%). ROIC increased slightly on 0.67 pp from 2.7% to 3.4% in FY2016. ROE jumped on 11.0 pp from 6.4% to 17.3% in FY2016.
Leverage (Debt)
Debt level is 10.5x Net Debt / EBITDA and 16.9x Debt / EBITDA. Net Debt / EBITDA dropped on 5.3x from 15.9x to 10.5x in FY2016. Debt increased slightly on 2.0% while cash jumped on 43.1%.
Appendix 1: Peers in Engineering&Construction
Below you can find Chun Wo Development 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) | 12.8% | 22.8% | 18.8% | 9.9% | 7.4% |
|---|
| Chun Wo Development Holdings Ltd ($711) | | 53.2% | 33.9% | 27.0% | 2.7% |
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% | 16.9% | 15.4% | 16.3% | 16.0% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 7.2% | 9.0% | 6.3% | 5.7% | 5.7% |
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% | 8.8% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 2.3% | 3.8% | 2.0% | 1.5% | 1.9% |
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% | 47.3% |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | |
| |
|---|
| Median (40 companies) | 2.5% | 3.3% | 1.7% | 2.1% | 8.9% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 0.3% | 0.9% | 0.9% | 0.5% | 0.4% |
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% | 5.5% | 4.1% | 4.4% | 3.2% |
|---|
| Chun Wo Development Holdings Ltd ($711) | 2.3% | 5.0% | 3.1% | 2.7% | 3.4% |
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 | 2.7x |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (34 companies) | 0.9x | 0.3x | 0.4x | 2.1x | 2.7x |
|---|
| Chun Wo Development Holdings Ltd ($711) | 14.3x | 8.1x | 12.6x | 15.9x | 10.5x |
