Huabao International Holdings Ltd Net Income dropped on 27.0% in 2016 and Revenue decreased on 9.2%
22/06/2016 • About Huabao International Holdings Ltd (
$336) • By InTwits
Huabao International Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Huabao International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's in pair with industry average of 9.6%.
- CAPEX is quite volatile: 137 in FY2016, 154 in FY2015, 162 in FY2014, 335 in FY2013, 597 in FY2012
- The company has highly profitable business model: ROIC is at 17.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huabao International Holdings Ltd ($336) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,311 | 3,646 | 4,237 | 4,326 | 3,928 | -9.2% |
| Gross Profit | 2,336 | 2,519 | 2,998 | 3,025 | 2,705 | -10.6% |
| SG&A | 340 | 457 | 582 | 713 | 907 | 27.3% |
| EBITDA | 2,111 | 2,156 | 2,544 | 2,522 | 2,010 | -20.3% |
| Net Income | 1,750 | 1,716 | 1,977 | 1,987 | 1,450 | -27.0% |
Balance Sheet
|
|---|
| Cash | 2,287 | 1,886 | 2,375 | 2,674 | 3,184 | 19.1% |
| Short Term Debt | 928 | 465 | 530 | 750 | 18 | -97.6% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 597 | 335 | 162 | 154 | 137 | -11.0% |
Ratios
|
|---|
| Revenue growth | 16.1% | 10.1% | 16.2% | 2.1% | -9.2% | |
| EBITDA growth | 11.5% | 2.1% | 18.0% | -0.8% | -20.3% | |
| Gross Margin | 70.5% | 69.1% | 70.8% | 69.9% | 68.9% | -1.1% |
| EBITDA Margin | 63.8% | 59.1% | 60.0% | 58.3% | 51.2% | -7.1% |
| Net Income Margin | 52.9% | 47.1% | 46.7% | 45.9% | 36.9% | -9.0% |
| SG&A, % of revenue | 10.3% | 12.5% | 13.7% | 16.5% | 23.1% | 6.6% |
| CAPEX, % of revenue | 18.0% | 9.2% | 3.8% | 3.6% | 3.5% | -0.1% |
| ROIC | 28.7% | 25.2% | 26.2% | 23.3% | 17.1% | -6.2% |
| ROE | 30.8% | 25.2% | 24.8% | 22.3% | 15.0% | -7.3% |
| Net Debt/EBITDA | -0.6x | -0.7x | -0.7x | -0.8x | -1.6x | -0.8x |
Revenue and profitability
Huabao International Holdings Ltd's Revenue decreased on 9.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.1 pp from 17.7% to 21.7% in FY2016.
Gross Margin decreased slightly on 1.1 pp from 69.9% to 68.9% in FY2016. SG&A as a % of Revenue increased on 6.6 pp from 16.5% to 23.1% in FY2016.
Net Income marign decreased on 9.0 pp from 45.9% to 36.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Huabao International Holdings Ltd had CAPEX/Revenue of 3.5%. Huabao International Holdings Ltd showed decline in CAPEX/Revenue of 5.7 pp from 9.2% in FY2013 to 3.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at good ROIC (17.06%) and ROE (14.98%). ROIC decreased on 6.2 pp from 23.3% to 17.1% in FY2016. ROE decreased on 7.3 pp from 22.3% to 15.0% in FY2016.
Leverage (Debt)
Debt level is -1.6x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from -0.8x to -1.6x in FY2016. Debt dropped on 97.6% while cash surged on 19.1%.
Management team
Huabao International Holdings Ltd's CEO Chu Lam Yiu has spent 5 years at the company.
Appendix 1: Peers in Chemicals
Below we provide Huabao International Holdings Ltd benchmarking against other companies in Chemicals 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 |
|---|
| Bestway International Holdings Ltd ($718) | | -62.1% | 330.3% | 238.4% | 14,591.4% |
| China First Chemical Holdings Ltd ($2121) | 6.2% | -6.8% | -18.0% | 72.5% | |
| Strong Petrochemical Holdings Ltd ($852) | 40.8% | 87.9% | -60.8% | 42.3% | |
| Ko Yo Chemical Group Ltd ($827) | -5.6% | -0.6% | 2.3% | 40.8% | |
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 16.0% | 63.5% | -7.7% | 36.6% | |
| |
|---|
| Median (31 companies) | 2.1% | 8.5% | 1.8% | -3.7% | 14,591.4% |
|---|
| Huabao International Holdings Ltd ($336) | | 10.1% | 16.2% | 2.1% | -9.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | 46.8% | 48.6% | 47.8% | 48.9% | |
| Bestway International Holdings Ltd ($718) | 5.1% | 4.6% | 8.6% | 40.4% | 7.1% |
| Bracell Ltd ($1768) | 30.5% | 37.3% | 37.3% | 38.4% | |
| Shaanxi Northwest New Technology Industry Co Ltd ($8258) | 28.7% | 30.9% | 30.0% | 37.9% | |
| Infinity Chemical Holdings Co Ltd ($640) | 25.4% | 28.0% | 29.8% | 33.2% | |
| |
|---|
| Median (31 companies) | 18.9% | 17.3% | 16.8% | 18.6% | 7.1% |
|---|
| Huabao International Holdings Ltd ($336) | 70.5% | 69.1% | 70.8% | 69.9% | 68.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bracell Ltd ($1768) | 22.3% | 30.8% | 38.2% | 35.9% | |
| Yingde Gases Group Co Ltd ($2168) | 29.4% | 29.8% | 32.3% | 33.4% | |
| Tiande Chemical Holdings Ltd ($609) | 25.5% | 27.3% | 25.1% | 27.8% | |
| Century Sunshine Group Holdings Ltd ($509) | 24.2% | 28.1% | 27.6% | 26.1% | |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 8.2% | 18.3% | 18.0% | 22.2% | |
| |
|---|
| Median (31 companies) | 12.3% | 11.8% | 10.7% | 11.1% | 5.0% |
|---|
| Huabao International Holdings Ltd ($336) | 63.8% | 59.1% | 60.0% | 58.3% | 51.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Landing International Development Ltd ($582) | 7.2% | 29.6% | 419.5% | 247.4% | |
| China Zenith Chemical Group Ltd ($362) | 147.3% | 55.7% | 67.4% | 152.2% | |
| Smartac Group China Holdings Ltd ($395) | 14.0% | 4.7% | 49.3% | 52.4% | |
| China Flavors & Fragrances Co Ltd ($3318) | 15.8% | 20.1% | 42.4% | 35.8% | |
| Ko Yo Chemical Group Ltd ($827) | 45.2% | 43.2% | 20.7% | 27.5% | |
| |
|---|
| Median (31 companies) | 6.8% | 8.5% | 5.8% | 8.1% | 1.1% |
|---|
| Huabao International Holdings Ltd ($336) | 18.0% | 9.2% | 3.8% | 3.6% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tiande Chemical Holdings Ltd ($609) | 26.2% | 29.4% | 20.7% | 20.6% | |
| Sinopec Shanghai Petrochemical Co Ltd ($338) | -6.9% | 8.1% | -2.4% | 16.5% | |
| Century Sunshine Group Holdings Ltd ($509) | 11.3% | 15.9% | 16.4% | 13.3% | |
| Infinity Chemical Holdings Co Ltd ($640) | 11.1% | 10.2% | 8.8% | 12.7% | |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | -1.3% | 2.6% | 5.9% | 11.6% | |
| |
|---|
| Median (31 companies) | 6.9% | 7.7% | 5.6% | 4.8% | 4.2% |
|---|
| Huabao International Holdings Ltd ($336) | 28.7% | 25.2% | 26.2% | 23.3% | 17.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ko Yo Chemical Group Ltd ($827) | 8.8x | 22.0x | | 141.5x | |
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.2x | 4.6x | 18.1x | 13.5x | |
| Sinofert Holdings Ltd ($297) | 2.9x | 32.4x | 5.0x | 8.4x | |
| Ngai Hing Hong Co Ltd ($1047) | 11.7x | 5.3x | 5.4x | 5.3x | |
| China XLX Fertiliser Ltd ($1866) | 2.6x | 5.1x | 5.8x | 5.1x | |
| |
|---|
| Median (26 companies) | 1.6x | 2.2x | 1.4x | 2.0x | 7.0x |
|---|
| Huabao International Holdings Ltd ($336) | -0.6x | -0.7x | -0.7x | -0.8x | -1.6x |
