Chen Hsong Holdings EBITDA dropped on 123% and Revenue dropped on 20.4%
27/06/2016 • About Chen Hsong Holdings (
$57) • By InTwits
Chen Hsong Holdings reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Chen Hsong Holdings is a company in decline: FY2016 revenue growth was -20.4%, 5 years revenue CAGR was -12.4%
- EBITDA Margin is declining: -1.7% in FY2016 vs. 6.0% in FY2015 vs. 10.9% in FY2012
- EBITDA Margin is quite volatile: -1.7% in FY2016, 6.0% in FY2015, 8.5% in FY2014, 8.8% in FY2013, 10.9% in FY2012
- Chen Hsong Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's in pair with industry average of 6.2%.
- CAPEX is quite volatile: 29.9 in FY2016, 37.6 in FY2015, 122 in FY2014, 114 in FY2013, 107 in FY2012
- The company has unprofitable business model: ROIC is at -2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chen Hsong Holdings ($57) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,838 | 1,794 | 1,846 | 1,568 | 1,248 | -20.4% |
| Gross Profit | 437 | 422 | 417 | 330 | 242 | -26.6% |
| SG&A | | 305 | 320 | 270 | 251 | -7.2% |
| EBITDA | 200 | 158 | 158 | 94 | -22 | -122.8% |
| Net Income | 160 | 104 | 81 | 20 | -173 | -950.3% |
Balance Sheet
|
|---|
| Cash | 694 | 752 | 794 | 879 | 776 | -11.7% |
| Short Term Debt | 213 | 232 | 290 | 297 | 105 | -64.5% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 107 | 114 | 122 | 38 | 30 | -20.5% |
Ratios
|
|---|
| Revenue growth | -24.1% | -2.4% | 2.9% | -15.1% | -20.4% | |
| EBITDA growth | -38.5% | -21.3% | 0.0% | -40.1% | -122.8% | |
| Gross Margin | 23.8% | 23.5% | 22.6% | 21.0% | 19.4% | -1.6% |
| EBITDA Margin | 10.9% | 8.8% | 8.5% | 6.0% | -1.7% | -7.7% |
| Net Income Margin | 8.7% | 5.8% | 4.4% | 1.3% | -13.9% | -15.2% |
| SG&A, % of revenue | | 17.0% | 17.3% | 17.2% | 20.1% | 2.9% |
| CAPEX, % of revenue | 5.8% | 6.3% | 6.6% | 2.4% | 2.4% | -0.0% |
| ROIC | 4.6% | 2.9% | 2.6% | 0.8% | -2.8% | -3.5% |
| ROE | 5.8% | 3.7% | 2.8% | 0.7% | -6.2% | -6.9% |
| Net Debt/EBITDA | -2.4x | -3.3x | -3.2x | -6.2x | | 6.2x |
Revenue and profitability
Chen Hsong Holdings's Revenue dropped on 20.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 0.18% to 2.2% in FY2016.
Gross Margin decreased slightly on 1.6 pp from 21.0% to 19.4% in FY2016. SG&A as a % of Revenue increased on 2.9 pp from 17.2% to 20.1% in FY2016.
Net Income marign dropped on 15.2 pp from 1.3% to -13.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Chen Hsong Holdings had CAPEX/Revenue of 2.4%. CAPEX/Revenue decreased on 3.9 pp from 6.3% in FY2013 to 2.4% in FY2016. It's average level of CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at negative ROIC (-2.79%) and ROE (-6.24%). ROIC decreased on 3.5 pp from 0.76% to -2.8% in FY2016. ROE decreased on 6.9 pp from 0.70% to -6.2% in FY2016.
Leverage (Debt)
Debt level is -1.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA surged on 6.2x from -6.2x to in FY2016. Debt dropped on 64.5% while cash dropped on 11.7%.
Appendix 1: Peers in Machinery-Diversified
Below you can find Chen Hsong Holdings benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 2.6% | -8.9% | 37.3% | 52.8% | |
| North Asia Strategic Holdings Ltd ($8080) | | -29.1% | 23.7% | 42.6% | -3.9% |
| Huazhang Technology Holding Ltd ($1673) | 131.6% | 9.5% | 22.9% | 23.5% | |
| Sinoref Holdings Ltd ($1020) | -0.2% | -42.2% | 29.2% | 19.9% | |
| LK Technology Holdings Ltd ($558) | 15.7% | -15.0% | 3.7% | 18.5% | |
| |
|---|
| Median (20 companies) | -3.6% | -4.7% | -0.2% | -4.8% | -3.9% |
|---|
| Chen Hsong Holdings ($57) | | -2.4% | 2.9% | -15.1% | -20.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 49.1% | 51.7% | 54.9% | 65.5% | |
| Renheng Enterprise Holdings Ltd ($3628) | 44.3% | 44.8% | 45.4% | 48.9% | |
| Haitian International Holdings Ltd ($1882) | 30.1% | 31.6% | 32.4% | 33.0% | |
| CHTC Fong's Industries Co Ltd ($641) | 24.4% | 30.0% | 32.3% | 31.2% | |
| Good Friend International Holdings Inc ($2398) | 20.1% | 22.9% | 26.5% | 27.1% | |
| |
|---|
| Median (20 companies) | 25.3% | 22.1% | 19.3% | 20.8% | 14.6% |
|---|
| Chen Hsong Holdings ($57) | 23.8% | 23.5% | 22.6% | 21.0% | 19.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 24.0% | 26.9% | 28.0% | 28.5% | |
| Haitian International Holdings Ltd ($1882) | 19.7% | 20.7% | 21.9% | 22.8% | |
| Renheng Enterprise Holdings Ltd ($3628) | 24.7% | 23.9% | 20.7% | 17.3% | |
| Huazhang Technology Holding Ltd ($1673) | 11.6% | 11.2% | 12.5% | 11.3% | |
| Good Friend International Holdings Inc ($2398) | 6.7% | 9.1% | 12.9% | 9.9% | |
| |
|---|
| Median (20 companies) | 9.7% | 8.6% | 8.2% | 4.1% | -1.0% |
|---|
| Chen Hsong Holdings ($57) | 10.9% | 8.8% | 8.5% | 6.0% | -1.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 2.3% | 10.1% | 7.8% | 31.9% | |
| Honghua Group Ltd ($196) | 11.5% | 14.6% | 6.8% | 27.3% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 20.5% | 20.3% | 11.6% | 15.6% | |
| Shenji Group Kunming Machine Tool Co Ltd ($300) | 9.5% | 6.7% | 5.0% | 8.3% | |
| Haitian International Holdings Ltd ($1882) | 4.2% | 6.8% | 6.3% | 6.3% | |
| |
|---|
| Median (20 companies) | 4.2% | 3.9% | 4.4% | 2.8% | |
|---|
| Chen Hsong Holdings ($57) | 5.8% | 6.3% | 6.6% | 2.4% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Haitian International Holdings Ltd ($1882) | 19.8% | 21.2% | 19.4% | 16.3% | |
| Huazhang Technology Holding Ltd ($1673) | 29.6% | 16.2% | 16.3% | 16.2% | |
| Jingwei Textile Machinery ($350) | 19.4% | 20.9% | 17.4% | 14.9% | |
| Good Friend International Holdings Inc ($2398) | 6.5% | 8.7% | 12.1% | 5.9% | |
| Shanghai Prime Machinery Co Ltd ($2345) | 2.5% | 2.8% | 2.5% | 5.8% | |
| |
|---|
| Median (20 companies) | 7.5% | 4.2% | 2.8% | 1.7% | -1.7% |
|---|
| Chen Hsong Holdings ($57) | 4.6% | 2.9% | 2.6% | 0.8% | -2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 3.0x | 11.4x | 5.6x | 129.4x | |
| Honghua Group Ltd ($196) | 1.2x | 3.2x | 5.2x | 14.2x | |
| First Tractor Co Ltd ($38) | 0.5x | 2.5x | 9.2x | 6.3x | |
| LK Technology Holdings Ltd ($558) | 2.5x | 5.1x | 4.9x | 4.6x | |
| Cosmos Machinery Enterprises Ltd ($118) | 2.2x | 1.7x | 2.1x | 3.9x | |
| |
|---|
| Median (15 companies) | -0.6x | 0.2x | 0.2x | 3.1x | |
|---|
| Chen Hsong Holdings ($57) | -2.4x | -3.3x | -3.2x | -6.2x | |
