Epicurean and Co Ltd EBITDA dropped on 40.4% and EBITDA Margin decreased slightly on 0.73 pp from 2.3% to 1.6%
27/06/2016 • About Epicurean and Co Ltd (
$8213) • By InTwits
Epicurean and Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Epicurean and Co Ltd doesn't have a profitable business model yet: FY2016 ROIC is -16.9%
- EBITDA Margin is quite volatile: 1.6% in FY2016, 2.3% in FY2015, 1.4% in FY2014, 5.4% in FY2013, 4.0% in FY2012
- Epicurean and Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.3%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 102 in FY2016, 395 in FY2015, 523 in FY2014, 1,141 in FY2013, 682 in FY2012
- The company has unprofitable business model: ROIC is at -16.9%
- It operates with high leverage: Net Debt/EBITDA is 13.9x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Epicurean and Co Ltd ($8213) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 89.3 | 255.1 | 414.6 | 506.0 | 442.9 | -12.5% |
| Gross Profit | 60.5 | 171.6 | 279.2 | 346.0 | 298.5 | -13.7% |
| EBITDA | 3.6 | 13.8 | 5.9 | 11.5 | 6.9 | -40.4% |
| Net Income | -16.0 | -17.9 | -27.7 | -36.6 | -38.7 | |
Balance Sheet
|
|---|
| Cash | 30.2 | 34.0 | 27.2 | 49.6 | 40.0 | -19.5% |
| Short Term Debt | 38.3 | 19.1 | 20.5 | 188.3 | 96.8 | -48.6% |
| Long Term Debt | 0.0 | 80.2 | 79.4 | 0.0 | 38.7 | |
Cash flow
|
|---|
| Capex | 22.6 | 26.6 | 42.7 | 27.7 | 21.9 | -21.0% |
Ratios
|
|---|
| Revenue growth | 177.0% | 185.7% | 62.6% | 22.0% | -12.5% | |
| EBITDA growth | -7.6% | 283.8% | -56.9% | 94.5% | -40.4% | |
| Gross Margin | 67.8% | 67.3% | 67.3% | 68.4% | 67.4% | -1.0% |
| EBITDA Margin | 4.0% | 5.4% | 1.4% | 2.3% | 1.6% | -0.7% |
| Net Income Margin | -17.9% | -7.0% | -6.7% | -7.2% | -8.7% | -1.5% |
| CAPEX, % of revenue | 25.3% | 10.4% | 10.3% | 5.5% | 4.9% | -0.5% |
| ROIC | -7.2% | -2.4% | -13.9% | -16.4% | -16.9% | -0.5% |
| ROE | -51.2% | -36.7% | -61.7% | | | 0.0% |
| Net Debt/EBITDA | 2.3x | 4.7x | 12.3x | 12.0x | 13.9x | 1.9x |
Revenue and profitability
Epicurean and Co Ltd's Revenue dropped on 12.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 8.3% to 12.3% in FY2016.
Gross Margin decreased slightly on 0.98 pp from 68.4% to 67.4% in FY2016.
Net Income marign decreased slightly on 1.5 pp from -7.2% to -8.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 4.9%. The company's CAPEX/Revenue decreased on 5.5 pp from 10.4% in FY2013 to 4.9% in FY2016. It's average CAPEX/Revenue for the last three years was 6.9%.The company has spent a lot to CAPEX (318% of EBITDA) which didn't stop revenue from falling.
Leverage (Debt)
Debt level is 13.9x Net Debt / EBITDA and 19.7x Debt / EBITDA. Net Debt / EBITDA surged on 1.9x from 12.0x to 13.9x in FY2016. Debt dropped on 28.0% while cash dropped on 19.5%.
Appendix 1: Peers in Software
Below you can find Epicurean and Co Ltd benchmarking vs. other companies in Software 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 |
|---|
| Yunbo Digital Synergy Group Ltd ($8050) | | 241.6% | -31.9% | 348.0% | 99.6% |
| Pizu Group Holdings Ltd ($8053) | | -42.9% | 1,742.9% | 157.9% | 235.2% |
| China Eco-Farming Ltd ($8166) | -23.6% | -7.7% | 21.8% | 155.5% | |
| ICO Group Ltd ($8140) | | -11.1% | -3.1% | 104.9% | 29.8% |
| Aurum Pacific China Group Ltd ($8148) | | | 50.0% | 92.7% | |
| |
|---|
| Median (37 companies) | 19.9% | 11.1% | 20.9% | 7.8% | 13.6% |
|---|
| Epicurean and Co Ltd ($8213) | | 185.7% | 62.6% | 22.0% | -12.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Bio Cassava Holdings Ltd ($8129) | 90.4% | 97.4% | 98.4% | 98.3% | |
| Chanjet Information Technology Co Ltd ($1588) | 89.2% | 91.3% | 92.4% | 91.4% | |
| China Binary Sale Technology Ltd ($8255) | 63.5% | 68.5% | 67.7% | 85.9% | |
| Kingdee International Software Group Co Ltd ($268) | 65.0% | 75.3% | 82.5% | 81.5% | |
| Tian Ge Interactive Holdings Ltd ($1980) | 88.5% | 87.6% | 84.8% | 77.7% | |
| |
|---|
| Median (36 companies) | 40.0% | 38.6% | 39.7% | 41.4% | 27.8% |
|---|
| Epicurean and Co Ltd ($8213) | 67.8% | 67.3% | 67.3% | 68.4% | 67.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| International Entertainment Corp ($1009) | 50.8% | 64.0% | 54.9% | 62.0% | 45.5% |
| Sinosoft Technology Group Ltd ($1297) | 62.6% | 54.9% | 57.2% | 59.0% | |
| China Binary Sale Technology Ltd ($8255) | 35.1% | 35.4% | 44.4% | 50.5% | |
| Boyaa Interactive International Ltd ($434) | 38.5% | 25.8% | 30.7% | 47.6% | |
| TravelSky Technology Ltd ($696) | 38.1% | 35.8% | 31.9% | 41.1% | |
| |
|---|
| Median (37 companies) | 11.1% | 14.0% | 11.1% | 9.8% | 5.4% |
|---|
| Epicurean and Co Ltd ($8213) | 4.0% | 5.4% | 1.4% | 2.3% | 1.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NetDragon Websoft Inc ($777) | 21.1% | 34.6% | 54.6% | 42.9% | |
| China Information Technology Development Ltd ($8178) | 4.1% | 1.1% | 0.5% | 40.7% | |
| Aurum Pacific China Group Ltd ($8148) | | 2.9% | 7.5% | 20.6% | |
| TravelSky Technology Ltd ($696) | 8.9% | 21.7% | 18.1% | 18.1% | |
| Kingsoft Corp Ltd ($3888) | 4.3% | 3.8% | 14.3% | 11.1% | |
| |
|---|
| Median (37 companies) | 1.3% | 1.6% | 3.1% | 2.0% | 0.8% |
|---|
| Epicurean and Co Ltd ($8213) | 25.3% | 10.4% | 10.3% | 5.5% | 4.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pizu Group Holdings Ltd ($8053) | -21.8% | -13.4% | -6.8% | 120.0% | 51.7% |
| ICO Group Ltd ($8140) | | 43.5% | 6.8% | 37.7% | 27.1% |
| IGG Inc ($8002) | | 55.9% | 41.4% | 25.9% | |
| Boyaa Interactive International Ltd ($434) | 75.3% | 21.3% | 20.0% | 21.4% | |
| Sinosoft Technology Group Ltd ($1297) | 34.0% | 21.9% | 20.2% | 20.8% | |
| |
|---|
| Median (37 companies) | 5.6% | 6.7% | 6.8% | 2.3% | 7.0% |
|---|
| Epicurean and Co Ltd ($8213) | -7.2% | -2.4% | -13.9% | -16.4% | -16.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sing Lee Software Group Ltd ($8076) | | | 6.2x | 4.4x | |
| Century Sage Scientific Holdings Ltd ($1450) | 0.2x | 0.0x | -0.2x | 1.8x | |
| Microsoft Corp ($4338) | | | 0.4x | 1.2x | 1.4x |
| Chinasoft International Ltd ($354) | -0.7x | 0.7x | 1.5x | 0.7x | |
| China Technology Solar Power Holdings Ltd ($8111) | | 7.4x | 3.3x | 0.2x | 0.9x |
| |
|---|
| Median (21 companies) | -1.1x | -1.7x | -1.8x | -1.2x | -0.4x |
|---|
| Epicurean and Co Ltd ($8213) | 2.3x | 4.7x | 12.3x | 12.0x | 13.9x |
