China Fortune Financial Group Ltd reports 9.1% revenue growth in FY2016 and 61.3 pp EBITDA Margin growth from -110% to -48.3%
23/06/2016 • About China Fortune Financial Group Ltd (
$290) • By InTwits
China Fortune Financial Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Fortune Financial Group Ltd doesn't have a profitable business model yet: FY2016 ROIC is -7.0%
- The company operates at negative EBITDA Margin: -48.3%
- China Fortune Financial Group 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 -68.1%0
- China Fortune Financial Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.0%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 1.5 in FY2016, 2.1 in FY2015, 0.20 in FY2014, 4.2 in FY2013, 10.8 in FY2012
- The company has unprofitable business model: ROIC is at -7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Fortune Financial Group Ltd ($290) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 47.354 | 46.810 | 51.140 | 45.083 | 49.207 | 9.1% |
| Gross Profit | 43.284 | 43.872 | 46.864 | 40.110 | 34.401 | -14.2% |
| SG&A | | 41.160 | 36.889 | 39.202 | 44.218 | 12.8% |
| EBITDA | -24.073 | -33.478 | -32.415 | -49.432 | -23.789 | |
| Net Income | -69.602 | -69.002 | -15.254 | -156.732 | -42.301 | |
Balance Sheet
|
|---|
| Cash | 107.484 | 104.131 | 206.365 | 187.067 | 181.972 | -2.7% |
| Short Term Debt | 85.752 | 52.954 | 41.242 | 81.413 | 10.772 | -86.8% |
| Long Term Debt | 40.046 | 67.230 | 76.040 | 98.493 | 117.689 | 19.5% |
Cash flow
|
|---|
| Capex | 10.793 | 4.174 | 0.202 | 2.083 | 1.528 | -26.6% |
Ratios
|
|---|
| Revenue growth | -37.1% | -1.1% | 9.3% | -11.8% | 9.1% | |
| EBITDA growth | -723.0% | 39.1% | -3.2% | 52.5% | -51.9% | |
| Gross Margin | 91.4% | 93.7% | 91.6% | 89.0% | 69.9% | -19.1% |
| EBITDA Margin | -50.8% | -71.5% | -63.4% | -109.6% | -48.3% | 61.3% |
| Net Income Margin | -147.0% | -147.4% | -29.8% | -347.7% | -86.0% | 261.7% |
| SG&A, % of revenue | | 87.9% | 72.1% | 87.0% | 89.9% | 2.9% |
| CAPEX, % of revenue | 22.8% | 8.9% | 0.4% | 4.6% | 3.1% | -1.5% |
| ROIC | -5.5% | -7.3% | -7.5% | -11.3% | -7.0% | 4.3% |
| ROE | -20.7% | -20.9% | -5.0% | -67.5% | -32.1% | 35.4% |
Revenue and profitability
The company's Revenue increased on 9.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 632 pp from -166% to -798% in FY2016.
Gross Margin dropped on 19.1 pp from 89.0% to 69.9% in FY2016. SG&A as a % of Revenue increased on 2.9 pp from 87.0% to 89.9% in FY2016.
Net Income marign jumped on 262 pp from -348% to -86.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.1%. China Fortune Financial Group Ltd showed decline in CAPEX/Revenue of 5.8 pp from 8.9% in FY2013 to 3.1% in FY2016. For the last three years the average CAPEX/Revenue was 2.7%.
Return on investment
The company operates at negative ROIC (-7.02%) and ROE (-32.13%). ROIC increased on 4.3 pp from -11.3% to -7.0% in FY2016. ROE surged on 35.4 pp from -67.5% to -32.1% in FY2016.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 28.6% while cash decreased on 2.7%.
Appendix 1: Peers in Diversified Finan Serv
Below we provide China Fortune Financial Group Ltd benchmarking against other companies in Diversified Finan Serv 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 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -4.0% | -23.1% | -87.3% | 1,860.5% | |
| Crown International Corp Ltd ($727) | 225.8% | -75.0% | 117.4% | 802.5% | |
| Global Strategic Group Ltd ($8007) | -3.9% | 2.1% | 806.3% | 681.2% | |
| Upbest Group Ltd ($335) | -38.5% | -61.8% | 24.1% | 208.1% | |
| GF Securities Co Ltd ($1776) | 16.3% | 31.8% | 75.0% | 163.9% | |
| |
|---|
| Median (64 companies) | 4.5% | 19.3% | 27.6% | 25.3% | 17.0% |
|---|
| China Fortune Financial Group Ltd ($290) | | -1.1% | 9.3% | -11.8% | 9.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Roma Group Ltd ($8072) | | | 99.4% | 98.7% | |
| First China Financial Network Holdings Ltd ($8123) | 93.4% | | 94.5% | 97.4% | |
| China Smarter Energy Group Holdings Ltd ($1004) | 6.2% | 4.0% | 46.9% | 96.9% | |
| Chinese Strategic Holdings Ltd ($8089) | 99.1% | 97.9% | 97.0% | 96.6% | |
| Allied Group Ltd ($373) | 95.1% | 94.4% | 93.6% | 92.2% | |
| |
|---|
| Median (11 companies) | 57.7% | 72.7% | 81.8% | 91.7% | |
|---|
| China Fortune Financial Group Ltd ($290) | 91.4% | 93.7% | 91.6% | 89.0% | 69.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -282.7% | -373.2% | -1,524.9% | 212.2% | |
| China Aircraft Leasing Group Holdings Ltd ($1848) | 91.3% | 86.4% | 92.9% | 107.0% | |
| Get Nice Holdings Ltd ($64) | 2.6% | 153.4% | 92.7% | 83.9% | |
| Hong Kong Exchanges and Clearing Ltd ($388) | 81.6% | 73.4% | 75.7% | 82.1% | |
| Hong Kong Finance Group Co Ltd ($1273) | 76.9% | 67.5% | 65.2% | 74.8% | 70.3% |
| |
|---|
| Median (66 companies) | 23.0% | 37.2% | 47.9% | 32.4% | 56.4% |
|---|
| China Fortune Financial Group Ltd ($290) | -50.8% | -71.5% | -63.4% | -109.6% | -48.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Aircraft Leasing Group Holdings Ltd ($1848) | 351.0% | 0.1% | 33.3% | 64.6% | |
| Willie International Holdings Ltd ($273) | | 0.3% | 0.8% | 58.0% | |
| China Assurance Finance Group Ltd ($8090) | 94.7% | 68.9% | 53.3% | 51.0% | |
| AID Partners Capital Holdings Ltd ($8088) | 4.1% | 2.9% | 28.4% | 26.6% | |
| Hongkong Chinese Ltd ($655) | | | 0.1% | 25.6% | |
| |
|---|
| Median (65 companies) | 1.9% | 1.8% | 1.1% | 1.5% | 0.3% |
|---|
| China Fortune Financial Group Ltd ($290) | 22.8% | 8.9% | 0.4% | 4.6% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong Exchanges and Clearing Ltd ($388) | 29.1% | 20.1% | 21.5% | 29.1% | |
| China Smarter Energy Group Holdings Ltd ($1004) | -19.4% | -23.0% | -14.0% | 22.5% | |
| Oi Wah Pawnshop Credit Holdings Ltd ($1319) | 32.7% | 20.7% | 14.0% | 15.3% | 12.5% |
| Emperor Capital Group Ltd ($717) | 5.1% | 12.8% | 13.1% | 14.6% | |
| Roma Group Ltd ($8072) | 19.6% | 43.7% | 107.8% | 13.3% | 9.8% |
| |
|---|
| Median (69 companies) | 4.4% | 4.2% | 4.9% | 3.6% | 9.8% |
|---|
| China Fortune Financial Group Ltd ($290) | -5.5% | -7.3% | -7.5% | -11.3% | -7.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hoifu Energy Group Ltd ($7) | | | | 62.5x | |
| South China Financial Holdings Ltd ($619) | | | | 56.9x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 2.1x | 10.3x | 9.3x | 39.3x | 4.3x |
| Far East Horizon Ltd ($3360) | 16.9x | 21.7x | 20.0x | 20.8x | |
| Quam Ltd ($952) | 58.9x | 15.9x | 4.1x | 14.8x | |
| |
|---|
| Median (50 companies) | -0.6x | 0.1x | -0.0x | -0.0x | 3.2x |
|---|
