Huaxi Holdings Co Ltd reports 36.2% Net Income decline in 2016 and 15.3% Revenue decline
24/06/2016 • About Huaxi Holdings Co Ltd (
$1689) • By InTwits
Huaxi Holdings Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Huaxi Holdings Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 2.6 in FY2016, 7.7 in FY2015, 6.7 in FY2014, 8.7 in FY2013, 2.9 in FY2012
- The company has highly profitable business model: ROIC is at 16.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huaxi Holdings Co Ltd ($1689) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 265.8 | 279.0 | 264.8 | 298.1 | 252.4 | -15.3% |
| Gross Profit | 50.4 | 78.5 | 108.4 | 111.9 | 94.2 | -15.8% |
| SG&A | 17.0 | 24.5 | 39.5 | 31.1 | 34.9 | 12.3% |
| EBITDA | 38.5 | 59.1 | 71.8 | 86.7 | 64.8 | -25.2% |
| Net Income | 29.7 | 44.7 | 56.6 | 70.7 | 45.1 | -36.2% |
Balance Sheet
|
|---|
| Cash | 27.0 | 46.6 | 53.2 | 137.9 | 140.6 | 2.0% |
| Short Term Debt | 57.0 | 50.4 | 52.6 | 52.8 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 2.9 | 8.7 | 6.7 | 7.7 | 2.6 | -66.4% |
Ratios
|
|---|
| Revenue growth | 25.3% | 5.0% | -5.1% | 12.5% | -15.3% | |
| EBITDA growth | 132.4% | 53.5% | 21.6% | 20.8% | -25.2% | |
| Gross Margin | 19.0% | 28.2% | 40.9% | 37.5% | 37.3% | -0.2% |
| EBITDA Margin | 14.5% | 21.2% | 27.1% | 29.1% | 25.7% | -3.4% |
| Net Income Margin | 11.2% | 16.0% | 21.4% | 23.7% | 17.9% | -5.8% |
| SG&A, % of revenue | 6.4% | 8.8% | 14.9% | 10.4% | 13.8% | 3.4% |
| CAPEX, % of revenue | 1.1% | 3.1% | 2.5% | 2.6% | 1.0% | -1.6% |
| ROIC | 21.4% | 28.5% | 26.2% | 23.6% | 16.6% | -7.0% |
| ROE | 33.7% | 35.2% | 29.6% | 25.8% | 14.4% | -11.3% |
| Net Debt/EBITDA | 0.8x | 0.1x | -0.0x | -1.0x | -2.2x | -1.2x |
Revenue and profitability
Huaxi Holdings Co Ltd's Revenue dropped on 15.3%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.4 pp from 29.1% to 25.7% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased on 3.4 pp from 10.4% to 13.8% in FY2016.
Net Income marign decreased on 5.8 pp from 23.7% to 17.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Huaxi Holdings Co Ltd had CAPEX/Revenue of 1.0%. Huaxi Holdings Co Ltd showed decline in CAPEX/Revenue of 2.1 pp from 3.1% in FY2013 to 1.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at good ROIC (16.62%) and ROE (14.43%). ROIC decreased on 7.0 pp from 23.6% to 16.6% in FY2016. ROE dropped on 11.3 pp from 25.8% to 14.4% in FY2016.
Leverage (Debt)
The company paid down all the debt in FY2016. Cash increased slightly on 2.0%.
Appendix 1: Peers in Packaging&Containers
Below you can find Huaxi Holdings Co Ltd benchmarking vs. other companies in Packaging&Containers 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 |
|---|
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 34.9% | 17.5% | -6.5% | 69.5% | |
| Hao Tian Development Group Ltd ($474) | 14.8% | | | 51.0% | |
| Jin Cai Holdings Co Ltd ($1250) | 2.1% | -6.3% | -3.1% | 40.8% | |
| Huajun Holdings Ltd ($377) | 11.2% | 3.3% | 3.4% | 10.4% | |
| Starlite Holdings Ltd ($403) | | 5.0% | 2.0% | 9.3% | 1.8% |
| |
|---|
| Median (19 companies) | 4.2% | 5.3% | 0.8% | 2.9% | 1.8% |
|---|
| Huaxi Holdings Co Ltd ($1689) | | 5.0% | -5.1% | 12.5% | -15.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 36.6% | 39.1% | 37.7% | 44.7% | |
| China For You Group Co Ltd ($572) | 12.4% | | 34.6% | 31.9% | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 34.3% | 36.5% | 32.8% | 31.4% | |
| Kith Holdings Ltd ($1201) | 30.8% | 31.9% | 31.4% | 30.5% | |
| China Aluminum Cans Holdings Ltd ($6898) | 33.3% | 37.2% | 28.5% | 30.3% | |
| |
|---|
| Median (18 companies) | 20.9% | 19.8% | 21.7% | 21.8% | 22.1% |
|---|
| Huaxi Holdings Co Ltd ($1689) | 19.0% | 28.2% | 40.9% | 37.5% | 37.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 27.9% | 30.7% | 27.4% | 26.3% | |
| Greatview Aseptic Packaging Co Ltd ($468) | 25.9% | 23.1% | 21.6% | 23.4% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 14.6% | 17.2% | 18.7% | 21.6% | |
| Kith Holdings Ltd ($1201) | 21.6% | 19.4% | 20.1% | 20.5% | |
| Jin Cai Holdings Co Ltd ($1250) | 33.2% | 26.1% | 27.6% | 19.8% | |
| |
|---|
| Median (19 companies) | 11.9% | 13.8% | 12.2% | 11.0% | 10.6% |
|---|
| Huaxi Holdings Co Ltd ($1689) | 14.5% | 21.2% | 27.1% | 29.1% | 25.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 0.0% | 0.0% | 3.0% | 122.3% | |
| Sheen Tai Holdings Grp Co Ltd ($1335) | 3.7% | 1.2% | 3.1% | 42.2% | |
| Hao Tian Development Group Ltd ($474) | 81.6% | | 13.0% | 25.4% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 19.7% | 13.7% | 13.1% | 17.1% | |
| Kith Holdings Ltd ($1201) | 3.7% | 4.8% | 3.3% | 13.3% | |
| |
|---|
| Median (19 companies) | 6.9% | 5.0% | 4.1% | 5.5% | 1.9% |
|---|
| Huaxi Holdings Co Ltd ($1689) | 1.1% | 3.1% | 2.5% | 2.6% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greatview Aseptic Packaging Co Ltd ($468) | 20.2% | 18.9% | 15.7% | 17.7% | |
| China Aluminum Cans Holdings Ltd ($6898) | 19.7% | 14.6% | 20.2% | 17.1% | |
| Kith Holdings Ltd ($1201) | 6.9% | 5.6% | 7.8% | 12.2% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 7.2% | 8.7% | 8.0% | 9.2% | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 8.1% | 6.4% | 4.9% | 8.0% | |
| |
|---|
| Median (19 companies) | 7.7% | 6.4% | 5.4% | 4.4% | 13.3% |
|---|
| Huaxi Holdings Co Ltd ($1689) | 21.4% | 28.5% | 26.2% | 23.6% | 16.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Haijing Holdings Ltd ($1106) | 6.4x | 6.1x | 6.2x | 10.1x | |
| Huajun Holdings Ltd ($377) | 0.0x | 0.3x | 0.7x | 9.9x | |
| Zhengye International Holdings Co Ltd ($3363) | 6.2x | 6.4x | 7.8x | 5.5x | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 9.4x | 6.7x | 7.4x | 4.4x | |
| Jin Bao Bao Holdings Ltd ($1239) | -1.7x | -1.7x | -1.2x | 4.2x | |
| |
|---|
| Median (16 companies) | 1.2x | 0.9x | 0.7x | 2.2x | -0.6x |
|---|
| Huaxi Holdings Co Ltd ($1689) | 0.8x | 0.1x | -0.0x | -1.0x | -2.2x |
