Alco Holdings Ltd reports 343% Net Income growth in 2016 and 12.4% Revenue growth
22/06/2016 • About Alco Holdings Ltd (
$328) • By InTwits
Alco 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: 11.9% in FY2016, 5.7% in FY2015, 1.2% in FY2014, 4.5% in FY2013, 4.7% in FY2012
- Alco Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 38.3%.
- CAPEX is quite volatile: 70.1 in FY2016, 34.4 in FY2015, 119 in FY2014, 25.5 in FY2013, 20.9 in FY2012
- The company has highly profitable business model: ROIC is at 14.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Alco Holdings Ltd ($328) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,769 | 1,866 | 2,291 | 2,563 | 2,879 | 12.4% |
| Gross Profit | 302 | 179 | 130 | 287 | 498 | 73.6% |
| SG&A | 210 | 153 | 148 | 167 | 192 | 14.6% |
| EBITDA | 131 | 84 | 29 | 147 | 342 | 133.0% |
| Net Income | 80 | 58 | -19 | 114 | 506 | 342.9% |
Balance Sheet
|
|---|
| Cash | 1,015 | 1,232 | 924 | 888 | 1,592 | 79.2% |
| Short Term Debt | 0 | 70 | 80 | 52 | 10 | -81.2% |
| Long Term Debt | 200 | 130 | 50 | 0 | 223 | |
Cash flow
|
|---|
| Capex | 21 | 26 | 119 | 34 | 70 | 103.7% |
Ratios
|
|---|
| Revenue growth | -10.2% | -32.6% | 22.8% | 11.8% | 12.4% | |
| EBITDA growth | -52.9% | -36.4% | -65.8% | 413.6% | 133.0% | |
| Gross Margin | 10.9% | 9.6% | 5.7% | 11.2% | 17.3% | 6.1% |
| EBITDA Margin | 4.7% | 4.5% | 1.2% | 5.7% | 11.9% | 6.2% |
| Net Income Margin | 2.9% | 3.1% | -0.8% | 4.5% | 17.6% | 13.1% |
| SG&A, % of revenue | 7.6% | 8.2% | 6.5% | 6.5% | 6.7% | 0.1% |
| CAPEX, % of revenue | 0.8% | 1.4% | 5.2% | 1.3% | 2.4% | 1.1% |
| ROIC | 3.0% | 1.3% | -0.8% | 5.4% | 14.5% | 9.1% |
| ROE | 4.2% | 3.1% | -1.0% | 6.0% | 25.9% | 19.8% |
| Net Debt/EBITDA | -6.2x | -12.3x | -27.8x | -5.7x | -4.0x | 1.7x |
Revenue and profitability
The company's Revenue surged on 12.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.0 pp from 20.5% to 16.4% in FY2016.
Gross Margin increased on 6.1 pp from 11.2% to 17.3% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign jumped on 13.1 pp from 4.5% to 17.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Alco Holdings Ltd had CAPEX/Revenue of 2.4%. Alco Holdings Ltd showed small growth in CAPEX/Revenue of 1.1 pp from 1.4% in FY2013 to 2.4% in FY2016. For the last three years the average CAPEX/Revenue was 3.0%.
Return on investment
The company operates at high and attractive ROE (25.87%) while ROIC is a bit lower (14.47%). ROIC increased on 9.1 pp from 5.4% to 14.5% in FY2016. ROE surged on 19.8 pp from 6.0% to 25.9% in FY2016.
Leverage (Debt)
Debt level is -4.0x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.7x from -5.7x to -4.0x in FY2016. Debt surged on 351% while cash surged on 79.2%.
Appendix 1: Peers in Home Furnishings
Below we provide Alco Holdings Ltd benchmarking against other companies in Home Furnishings industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BEP International Holdings Ltd ($2326) | | -41.5% | 46.2% | 187.9% | 258.0% |
| 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 (27 companies) | 1.1% | 6.6% | 1.7% | -2.4% | 2.7% |
|---|
| Alco Holdings Ltd ($328) | | -32.6% | 22.8% | 11.8% | 12.4% |
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% | 25.6% |
| |
|---|
| Median (27 companies) | 20.3% | 18.7% | 17.1% | 16.7% | 21.9% |
|---|
| Alco Holdings Ltd ($328) | 10.9% | 9.6% | 5.7% | 11.2% | 17.3% |
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% | |
| Skyworth Digital Holdings Ltd ($751) | 6.0% | 6.1% | 5.7% | 11.3% | 8.5% |
| 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% | |
| |
|---|
| Median (26 companies) | 6.0% | 4.8% | 4.7% | 3.1% | 6.8% |
|---|
| Alco Holdings Ltd ($328) | 4.7% | 4.5% | 1.2% | 5.7% | 11.9% |
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 (27 companies) | 1.5% | 2.2% | 2.8% | 2.2% | 3.7% |
|---|
| Alco Holdings Ltd ($328) | 0.8% | 1.4% | 5.2% | 1.3% | 2.4% |
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% | |
| Skyworth Digital Holdings Ltd ($751) | 11.6% | 13.4% | 10.9% | 23.0% | 13.7% |
| BEP International Holdings Ltd ($2326) | 90.3% | 4.7% | -4.5% | 17.6% | 29.4% |
| Tonly Electronics Holdings Ltd ($1249) | 4.2% | 7.1% | 15.9% | 11.7% | |
| |
|---|
| Median (27 companies) | 4.2% | 5.1% | 5.0% | 0.9% | 8.5% |
|---|
| Alco Holdings Ltd ($328) | 3.0% | 1.3% | -0.8% | 5.4% | 14.5% |
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 | 3.9x |
| TCL Multimedia Technology Holdings Ltd ($1070) | -0.3x | -2.3x | 0.7x | 0.5x | |
| Skyworth Digital Holdings Ltd ($751) | 1.2x | 1.5x | 1.2x | -0.2x | 0.9x |
| |
|---|
| Median (16 companies) | -0.3x | -0.9x | -1.3x | -0.9x | 3.9x |
|---|
| Alco Holdings Ltd ($328) | -6.2x | -12.3x | -27.8x | -5.7x | -4.0x |
