Deson Development International Holdings reports 195% EBITDA decline in 2016 while 6.4% Revenue growth
21/06/2016 • About Deson Development International Holdings (
$262) • By InTwits
Deson Development International Holdings reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Deson Development International Holdings doesn't have a profitable business model yet: FY2016 ROIC is -1.0%
- EBITDA Margin is quite volatile: -2.3% in FY2016, 2.6% in FY2015, 2.5% in FY2014, 7.4% in FY2013, 9.8% in FY2012
- Deson Development International Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has unprofitable business model: ROIC is at -1.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Deson Development International Holdings ($262) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 817.6 | 788.1 | 984.2 | 850.2 | 904.4 | 6.4% |
| Gross Profit | 147.9 | 133.1 | 102.0 | 81.0 | 82.1 | 1.4% |
| SG&A | | | | 126.4 | 101.3 | -19.8% |
| EBITDA | 79.9 | 58.2 | 24.2 | 22.1 | -20.9 | -194.5% |
| Net Income | 72.2 | 49.1 | 145.7 | 94.5 | 141.0 | 49.2% |
Balance Sheet
|
|---|
| Cash | 33.5 | 97.9 | 129.5 | 78.4 | 57.7 | -26.4% |
| Short Term Debt | 323.8 | 231.5 | 304.5 | 521.6 | 653.8 | 25.3% |
| Long Term Debt | 14.9 | 150.2 | 157.0 | 597.7 | 560.0 | -6.3% |
Cash flow
|
|---|
| Capex | 1.0 | 1.1 | 0.6 | 0.7 | 1.0 | 40.0% |
Ratios
|
|---|
| Revenue growth | 83.1% | -3.6% | 24.9% | -13.6% | 6.4% | |
| EBITDA growth | 719.3% | -27.2% | -58.4% | -8.7% | -194.5% | |
| Gross Margin | 18.1% | 16.9% | 10.4% | 9.5% | 9.1% | -0.4% |
| EBITDA Margin | 9.8% | 7.4% | 2.5% | 2.6% | -2.3% | -4.9% |
| Net Income Margin | 8.8% | 6.2% | 14.8% | 11.1% | 15.6% | 4.5% |
| SG&A, % of revenue | | | | 14.9% | 11.2% | -3.7% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | 0.0% |
| ROIC | 6.5% | 4.1% | 1.2% | 0.8% | -1.0% | -1.8% |
| ROE | 10.0% | 6.1% | 16.0% | 8.9% | 11.2% | 2.3% |
| Net Debt/EBITDA | 3.8x | 4.9x | 13.7x | 47.0x | | -47.0x |
Revenue and profitability
The company's Revenue increased on 6.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.6 pp from 1.6% to 6.2% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 3.7 pp from 14.9% to 11.2% in FY2016.
Net Income marign increased on 4.5 pp from 11.1% to 15.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Deson Development International Holdings had CAPEX/Revenue of 0.11%. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.085%.
Return on investment
The company operates at negative ROIC (-1.04%) and low but positive ROE (11.22%). ROIC decreased slightly on 1.8 pp from 0.76% to -1.0% in FY2016. ROE increased on 2.3 pp from 8.9% to 11.2% in FY2016.
Leverage (Debt)
Debt level is -5.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 47.0x from 47.0x to in FY2016. Debt increased on 8.5% while cash dropped on 26.4%.
Appendix 1: Peers in Engineering&Construction
Below you can find Deson Development International Holdings 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 (41 companies) | 12.7% | 24.5% | 20.3% | 10.5% | 1.5% |
|---|
| Deson Development International Holdings ($262) | | -3.6% | 24.9% | -13.6% | 6.4% |
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 (36 companies) | 14.9% | 15.2% | 15.4% | 16.0% | 14.1% |
|---|
| Deson Development International Holdings ($262) | 18.1% | 16.9% | 10.4% | 9.5% | 9.1% |
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 (41 companies) | 10.0% | 9.7% | 9.1% | 8.0% | 4.6% |
|---|
| Deson Development International Holdings ($262) | 9.8% | 7.4% | 2.5% | 2.6% | -2.3% |
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% | 47.3% |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | 19.7% |
| |
|---|
| Median (41 companies) | 2.4% | 3.9% | 1.7% | 2.0% | 2.7% |
|---|
| Deson Development International Holdings ($262) | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% |
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 (43 companies) | 5.8% | 5.7% | 4.3% | 5.4% | 3.5% |
|---|
| Deson Development International Holdings ($262) | 6.5% | 4.1% | 1.2% | 0.8% | -1.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 | |
| Chun Wo Development Holdings Ltd ($711) | 14.3x | 8.1x | 12.6x | 15.9x | 10.5x |
| |
|---|
| Median (35 companies) | 0.8x | 0.2x | 0.3x | 1.9x | 0.8x |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
