Global Link Communications Holdings Ltd reports 22.8% revenue decline in FY2016 and 10.8 pp EBITDA Margin growth from -53.8% to -43.0%
21/06/2016 • About Global Link Communications Holdings Ltd (
$8060) • By InTwits
Global Link Communications Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Global Link Communications Holdings Ltd is a company in decline: FY2016 revenue growth was -22.8%, 5 years revenue CAGR was -12.2%
- The company operates at negative EBITDA Margin: -43.0%
- Global Link Communications Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -20.0%0
- Global Link Communications Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has unprofitable business model: ROIC is at -30.9%
- It operates with high leverage: Net Debt/EBITDA is -1.0x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Global Link Communications Holdings Ltd ($8060) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 79.4 | 121.1 | 68.1 | 75.4 | 58.2 | -22.8% |
| Gross Profit | 24.3 | 38.3 | 14.2 | 1.7 | 1.5 | -14.9% |
| SG&A | 20.2 | 20.4 | 30.2 | 21.0 | 21.6 | 2.8% |
| EBITDA | 12.0 | 24.2 | -50.9 | -40.6 | -25.0 | |
| Net Income | 13.4 | 19.3 | -56.8 | -42.5 | -28.8 | |
Balance Sheet
|
|---|
| Cash | 42.0 | 31.7 | 29.3 | 18.7 | 12.5 | -33.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.9 | 0.0 | 0.1 | 1.7 | 0.3 | -82.8% |
Ratios
|
|---|
| Revenue growth | -28.8% | 52.6% | -43.7% | 10.7% | -22.8% | |
| EBITDA growth | -63.7% | 101.6% | -310.5% | -20.3% | -38.4% | |
| Gross Margin | 30.6% | 31.6% | 20.8% | 2.3% | 2.6% | 0.2% |
| EBITDA Margin | 15.1% | 20.0% | -74.7% | -53.8% | -43.0% | 10.8% |
| Net Income Margin | 16.9% | 15.9% | -83.4% | -56.3% | -49.5% | 6.8% |
| SG&A, % of revenue | 25.5% | 16.8% | 44.3% | 27.9% | 37.2% | 9.3% |
| CAPEX, % of revenue | 1.2% | 0.0% | 0.2% | 2.2% | 0.5% | -1.7% |
| ROIC | 8.1% | 15.5% | -37.7% | -38.0% | -30.9% | 7.1% |
| ROE | 10.8% | 13.5% | -45.5% | -46.1% | -39.9% | 6.2% |
| Net Debt/EBITDA | -3.5x | -1.3x | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 22.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.8 pp from -53.8% to -43.0% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased on 9.3 pp from 27.9% to 37.2% in FY2016.
Net Income marign increased on 6.8 pp from -56.3% to -49.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.49%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.96%.
Return on investment
The company operates at negative ROIC (-30.92%) and ROE (-39.95%). ROIC increased on 7.1 pp from -38.0% to -30.9% in FY2016. ROE increased on 6.2 pp from -46.1% to -39.9% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 33.2%.
Appendix 1: Peers in Software
Below you can find Global Link Communications Holdings Ltd benchmarking vs. other companies in Software 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 |
|---|
| Yunbo Digital Synergy Group Ltd ($8050) | | 241.6% | -31.9% | 348.0% | 99.6% |
| Pizu Group Holdings Ltd ($8053) | 40.3% | -42.9% | 1,742.9% | 157.9% | |
| China Eco-Farming Ltd ($8166) | -23.6% | -7.7% | 21.8% | 155.5% | |
| Aurum Pacific China Group Ltd ($8148) | | | 50.0% | 92.7% | |
| Kingsoft Corp Ltd ($3888) | 38.3% | 54.0% | 54.2% | 69.4% | |
| |
|---|
| Median (36 companies) | 19.9% | 11.2% | 21.8% | 5.5% | -2.6% |
|---|
| Global Link Communications Holdings Ltd ($8060) | | 52.6% | -43.7% | 10.7% | -22.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Bio Cassava Holdings Ltd ($8129) | 90.4% | 97.4% | 98.4% | 98.3% | |
| Chanjet Information Technology Co Ltd ($1588) | 89.2% | 91.3% | 92.4% | 91.4% | |
| China Binary Sale Technology Ltd ($8255) | 63.5% | 68.5% | 67.7% | 85.9% | |
| Kingdee International Software Group Co Ltd ($268) | 65.0% | 75.3% | 82.5% | 81.5% | |
| Tian Ge Interactive Holdings Ltd ($1980) | 88.5% | 87.6% | 84.8% | 77.7% | |
| |
|---|
| Median (35 companies) | 46.5% | 43.1% | 43.4% | 43.6% | 41.2% |
|---|
| Global Link Communications Holdings Ltd ($8060) | 30.6% | 31.6% | 20.8% | 2.3% | 2.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| International Entertainment Corp ($1009) | 50.8% | 64.0% | 54.9% | 62.0% | |
| Sinosoft Technology Group Ltd ($1297) | 62.6% | 54.9% | 57.2% | 59.0% | |
| China Binary Sale Technology Ltd ($8255) | 35.1% | 35.4% | 44.4% | 50.5% | |
| Boyaa Interactive International Ltd ($434) | 38.5% | 25.8% | 30.7% | 47.6% | |
| TravelSky Technology Ltd ($696) | 38.1% | 35.8% | 31.9% | 41.1% | |
| |
|---|
| Median (36 companies) | 9.8% | 11.1% | 13.7% | 10.3% | 2.8% |
|---|
| Global Link Communications Holdings Ltd ($8060) | 15.1% | 20.0% | -74.7% | -53.8% | -43.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NetDragon Websoft Inc ($777) | 21.1% | 34.6% | 54.6% | 42.9% | |
| China Information Technology Development Ltd ($8178) | 4.1% | 1.1% | 0.5% | 40.7% | |
| Aurum Pacific China Group Ltd ($8148) | | 2.9% | 7.5% | 20.6% | |
| TravelSky Technology Ltd ($696) | 8.9% | 21.7% | 18.1% | 18.1% | |
| Kingsoft Corp Ltd ($3888) | 4.3% | 3.8% | 14.3% | 11.1% | |
| |
|---|
| Median (36 companies) | 1.5% | 2.0% | 3.6% | 2.3% | 0.3% |
|---|
| Global Link Communications Holdings Ltd ($8060) | 1.2% | 0.0% | 0.2% | 2.2% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pizu Group Holdings Ltd ($8053) | -21.8% | -13.4% | -6.8% | 120.0% | |
| IGG Inc ($8002) | | 55.9% | 41.4% | 25.9% | |
| Boyaa Interactive International Ltd ($434) | 75.3% | 21.3% | 20.0% | 21.4% | |
| Sinosoft Technology Group Ltd ($1297) | 34.0% | 21.9% | 20.2% | 20.8% | |
| ITE Holdings Ltd ($8092) | -15.0% | 10.6% | 16.8% | 19.8% | 4.1% |
| |
|---|
| Median (36 companies) | 4.7% | 5.8% | 5.6% | 2.2% | 4.1% |
|---|
| Global Link Communications Holdings Ltd ($8060) | 8.1% | 15.5% | -37.7% | -38.0% | -30.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Epicurean and Co Ltd ($8213) | 2.3x | 4.7x | 12.3x | 12.0x | |
| Sing Lee Software Group Ltd ($8076) | | | 6.2x | 4.4x | |
| Century Sage Scientific Holdings Ltd ($1450) | 0.2x | 0.0x | -0.2x | 1.8x | |
| Microsoft Corp ($4338) | | | 0.4x | 1.2x | 1.4x |
| Chinasoft International Ltd ($354) | -0.7x | 0.7x | 1.5x | 0.7x | |
| |
|---|
| Median (21 companies) | -1.0x | -1.9x | -1.5x | -1.0x | -3.8x |
|---|
