Finet Group Ltd revenue dropped on 42.0% and EBITDA Margin dropped on 142 pp from -183% to -326%
25/06/2016 • About Finet Group Ltd (
$8317) • By InTwits
Finet Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Finet Group Ltd is a company in decline: FY2016 revenue growth was -42.0%, 5 years revenue CAGR was -19.9%
- The company operates at negative EBITDA Margin: -325.7%
- Finet 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 -130.3%0
- Finet Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.7%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: 1.7 in FY2016, 1.6 in FY2015, 6.2 in FY2014, 2.7 in FY2013, 2.8 in FY2012
- The company has unprofitable business model: ROIC is at -30.3%
- It operates with high leverage: Net Debt/EBITDA is 10.7x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Finet Group Ltd ($8317) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 27.167 | 29.491 | 23.880 | 19.292 | 11.183 | -42.0% |
| Gross Profit | 17.843 | 14.968 | 11.576 | 8.635 | 3.277 | -62.0% |
| SG&A | 43.173 | 40.260 | 40.611 | 45.805 | 47.665 | 4.1% |
| EBITDA | -22.177 | -23.877 | -26.877 | -35.346 | -36.422 | |
| Net Income | -20.553 | 27.047 | -19.305 | -36.214 | -35.957 | |
Balance Sheet
|
|---|
| Cash | 41.136 | 19.576 | 69.701 | 43.650 | 25.718 | -41.1% |
| Short Term Debt | 16.201 | 14.687 | 12.967 | 11.552 | 10.138 | -12.2% |
| Long Term Debt | 2.291 | 1.985 | 0.000 | 0.000 | 13.930 | |
Cash flow
|
|---|
| Capex | 2.794 | 2.686 | 6.208 | 1.612 | 1.665 | 3.3% |
Ratios
|
|---|
| Revenue growth | -20.1% | 8.6% | -19.0% | -19.2% | -42.0% | |
| EBITDA growth | 45.7% | 7.7% | 12.6% | 31.5% | 3.0% | |
| Gross Margin | 65.7% | 50.8% | 48.5% | 44.8% | 29.3% | -15.5% |
| EBITDA Margin | -81.6% | -81.0% | -112.6% | -183.2% | -325.7% | -142.5% |
| Net Income Margin | -75.7% | 91.7% | -80.8% | -187.7% | -321.5% | -133.8% |
| SG&A, % of revenue | 158.9% | 136.5% | 170.1% | 237.4% | 426.2% | 188.8% |
| CAPEX, % of revenue | 10.3% | 9.1% | 26.0% | 8.4% | 14.9% | 6.5% |
| ROIC | -20.0% | -15.0% | -16.0% | -24.9% | -30.3% | -5.4% |
| ROE | -19.7% | 17.7% | -12.2% | -27.6% | -35.0% | -7.4% |
Revenue and profitability
The company's Revenue dropped on 42.0%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 142 pp from -183% to -326% in FY2016.
Gross Margin dropped on 15.5 pp from 44.8% to 29.3% in FY2016. SG&A as a % of Revenue surged on 189 pp from 237% to 426% in FY2016.
Net Income marign dropped on 134 pp from -188% to -322% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 14.9% in FY2016. Finet Group Ltd's CAPEX/Revenue increased on 5.8 pp from 9.1% in FY2013 to 14.9% in FY2016. It's average CAPEX/Revenue for the last three years was 16.4%.
Return on investment
The company operates at negative ROIC (-30.29%) and ROE (-34.97%). ROIC decreased on 5.4 pp from -24.9% to -30.3% in FY2016. ROE decreased on 7.4 pp from -27.6% to -35.0% in FY2016.
Leverage (Debt)
Debt level is 10.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt surged on 108% while cash dropped on 41.1%.
Appendix 1: Peers in Commercial Services
Below you can find Finet Group Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 99.1% | 14.9% | -88.3% | 271.8% | |
| China Seven Star Holdings Ltd ($245) | 6.7% | -81.8% | -39.3% | 195.3% | |
| China Smartpay Group Holdings Ltd ($8325) | 60.0% | 274.7% | 75.6% | 124.5% | |
| Celebrate International Holdings Ltd ($8212) | -90.1% | 1,437.6% | -6.3% | 117.0% | |
| Haier Healthwise Holdings Ltd ($348) | -22.0% | -50.1% | -7.5% | 101.1% | |
| |
|---|
| Median (65 companies) | 6.7% | 8.6% | 9.9% | 4.7% | 8.0% |
|---|
| Finet Group Ltd ($8317) | | 8.6% | -19.0% | -19.2% | -42.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HC International Inc ($2280) | 87.5% | 91.9% | 92.5% | 89.6% | |
| Winto Group Holdings Ltd ($8238) | 90.2% | 93.4% | 92.0% | 88.4% | |
| Dingyi Group Investment Ltd ($508) | 75.8% | | 64.5% | 86.0% | |
| Fu Shou Yuan International Group Ltd ($1448) | 80.5% | 80.4% | 80.0% | 77.6% | |
| Nirvana Asia Ltd ($1438) | 68.3% | 69.6% | 70.5% | 75.7% | |
| |
|---|
| Median (60 companies) | 31.6% | 30.7% | 31.0% | 31.2% | 45.5% |
|---|
| Finet Group Ltd ($8317) | 65.7% | 50.8% | 48.5% | 44.8% | 29.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | 61.6% | 84.9% | 75.9% | 80.9% | |
| Shenzhen International Holdings Ltd ($152) | 60.2% | 65.8% | 97.1% | 73.6% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 78.3% | 74.5% | 74.0% | 71.6% | |
| CAR Inc ($699) | 43.6% | 30.1% | 43.1% | 67.4% | |
| Jiangsu Expressway Co Ltd ($177) | 57.0% | 60.7% | 59.3% | 61.5% | |
| |
|---|
| Median (65 companies) | 17.6% | 16.0% | 12.9% | 10.1% | 7.6% |
|---|
| Finet Group Ltd ($8317) | -81.6% | -81.0% | -112.6% | -183.2% | -325.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 21.3% | 9.0% | 13.9% | 47.4% | |
| COSCO Pacific Ltd ($1199) | 96.6% | 66.6% | 43.3% | 45.8% | |
| Shenzhen International Holdings Ltd ($152) | 23.0% | 22.1% | 20.9% | 35.0% | |
| Celebrate International Holdings Ltd ($8212) | 211.7% | 12.0% | 6.2% | 34.2% | |
| China Maple Leaf Educational Systems Ltd ($1317) | 25.7% | 50.9% | 21.1% | 32.8% | |
| |
|---|
| Median (65 companies) | 3.0% | 3.8% | 2.6% | 2.8% | 0.6% |
|---|
| Finet Group Ltd ($8317) | 10.3% | 9.1% | 26.0% | 8.4% | 14.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 51.5% | 26.6% | 30.0% | 29.5% | |
| 1010 Printing Group Ltd ($1127) | 13.5% | 20.8% | 17.8% | 19.9% | |
| China Packaging Holdings Development Ltd ($1439) | 52.0% | 46.6% | 34.1% | 19.8% | |
| iOne Holdings Ltd ($982) | 12.5% | 11.1% | 9.4% | 19.2% | |
| CAR Inc ($699) | 5.2% | 2.7% | 12.2% | 19.0% | |
| |
|---|
| Median (65 companies) | 7.5% | 6.4% | 5.8% | 3.3% | 7.5% |
|---|
| Finet Group Ltd ($8317) | -20.0% | -15.0% | -16.0% | -24.9% | -30.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | 22.2x | |
| Kai Yuan Holdings Ltd ($1215) | -143.8x | -0.7x | | 18.8x | |
| Eagle Legend Asia Ltd ($936) | 4.0x | 4.0x | 3.3x | 6.2x | |
| Sichuan Expressway Co Ltd ($107) | 2.7x | 3.8x | 4.3x | 5.5x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 4.5x | 3.1x | 2.7x | 5.3x | |
| |
|---|
| Median (43 companies) | -0.0x | -0.7x | -0.5x | -0.6x | -2.4x |
|---|
