GreaterChina Professional Services Ltd reports 248 pp EBITDA Margin growth from -198% to 49.6% in 2016 in 2016 and 19.8% Revenue growth
24/06/2016 • About GreaterChina Professional Services Ltd (
$8193) • By InTwits
GreaterChina Professional Services Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- GreaterChina Professional Services Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 7.0%.
- CAPEX is quite volatile: 0.85 in FY2016, 1.2 in FY2015, 0.30 in FY2014, 0.28 in FY2013, 0.86 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
GreaterChina Professional Services Ltd ($8193) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 68.336 | 96.231 | 88.871 | 45.983 | 55.079 | 19.8% |
| Gross Profit | 48.340 | 66.711 | 65.907 | 25.578 | 32.349 | 26.5% |
| SG&A | | 36.420 | 38.770 | 46.219 | 46.759 | 1.2% |
| EBITDA | 13.368 | 34.220 | 27.210 | -91.046 | 27.331 | |
| Net Income | 10.323 | 26.929 | 31.282 | -127.602 | -3.473 | |
Balance Sheet
|
|---|
| Cash | 37.073 | 19.458 | 4.024 | 17.004 | 23.729 | 39.5% |
| Short Term Debt | 0.144 | 0.162 | 0.167 | 1.644 | 1.563 | -4.9% |
| Long Term Debt | 0.342 | 0.167 | 0.000 | 96.217 | 49.420 | -48.6% |
Cash flow
|
|---|
| Capex | 0.857 | 0.282 | 0.298 | 1.191 | 0.846 | -29.0% |
Ratios
|
|---|
| Revenue growth | 22.8% | 40.8% | -7.6% | -48.3% | 19.8% | |
| EBITDA growth | -53.7% | 156.0% | -20.5% | -434.6% | -130.0% | |
| Gross Margin | 70.7% | 69.3% | 74.2% | 55.6% | 58.7% | 3.1% |
| EBITDA Margin | 19.6% | 35.6% | 30.6% | -198.0% | 49.6% | 247.6% |
| Net Income Margin | 15.1% | 28.0% | 35.2% | -277.5% | -6.3% | 271.2% |
| SG&A, % of revenue | | 37.8% | 43.6% | 100.5% | 84.9% | -15.6% |
| CAPEX, % of revenue | 1.3% | 0.3% | 0.3% | 2.6% | 1.5% | -1.1% |
| ROIC | 18.1% | 29.2% | 19.1% | -39.8% | 5.4% | 45.2% |
| ROE | 15.6% | 25.0% | 23.5% | -89.0% | -1.0% | 88.0% |
| Net Debt/EBITDA | -2.7x | -0.6x | -0.1x | | 1.0x | 1.0x |
Revenue and profitability
GreaterChina Professional Services Ltd's Revenue surged on 19.8%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 632 pp from -166% to -798% in FY2016.
Gross Margin increased on 3.1 pp from 55.6% to 58.7% in FY2016. SG&A as a % of Revenue dropped on 15.6 pp from 101% to 84.9% in FY2016.
Net Income marign surged on 271 pp from -277% to -6.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 1.5%. CAPEX/Revenue increased slightly on 1.2 pp from 0.29% in FY2013 to 1.5% in FY2016. Average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at low but positive ROIC (5.39%) and negative ROE (-1.00%). ROIC jumped on 45.2 pp from -39.8% to 5.4% in FY2016. ROE jumped on 88.0 pp from -89.0% to -1.00% in FY2016.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA surged1.0x from to 1.0x in FY2016. Debt dropped on 47.9% while cash surged on 39.5%.
Appendix 1: Peers in Diversified Finan Serv
Below we provide GreaterChina Professional Services 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) | 1.2% | 14.9% | 27.6% | 25.3% | 10.6% |
|---|
| GreaterChina Professional Services Ltd ($8193) | | 40.8% | -7.6% | -48.3% | 19.8% |
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% | 84.4% | 89.9% | 91.7% | 69.9% |
|---|
| GreaterChina Professional Services Ltd ($8193) | 70.7% | 69.3% | 74.2% | 55.6% | 58.7% |
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) | 22.2% | 37.2% | 47.9% | 32.4% | 56.4% |
|---|
| GreaterChina Professional Services Ltd ($8193) | 19.6% | 35.6% | 30.6% | -198.0% | 49.6% |
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) | 2.1% | 1.9% | 1.1% | 1.5% | 0.9% |
|---|
| GreaterChina Professional Services Ltd ($8193) | 1.3% | 0.3% | 0.3% | 2.6% | 1.5% |
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) | 3.9% | 4.0% | 4.8% | 3.6% | 6.6% |
|---|
| GreaterChina Professional Services Ltd ($8193) | 18.1% | 29.2% | 19.1% | -39.8% | 5.4% |
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) | -0.5x | 0.3x | 0.1x | -0.0x | 3.0x |
|---|
