Upbest Group Ltd reports 64.3% Net Income growth in 2016 while 63.4% Revenue decline
27/06/2016 • About Upbest Group Ltd (
$335) • By InTwits
Upbest Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Upbest Group Ltd is a company in decline: FY2016 revenue growth was -63.4%, 5 years revenue CAGR was -20.0%
- EBITDA Margin is quite volatile: 64.8% in FY2016, 24.9% in FY2015, 52.8% in FY2014, 49.3% in FY2013, 13.3% in FY2012
- Upbest Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has potentially unprofitable business model: ROIC is at 3.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Upbest Group Ltd ($335) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 180.0 | 68.7 | 85.3 | 262.7 | 96.1 | -63.4% |
| EBITDA | 23.9 | 33.9 | 45.1 | 65.5 | 62.3 | -4.8% |
| Net Income | 95.3 | 167.6 | 164.9 | 315.4 | 518.3 | 64.3% |
Balance Sheet
|
|---|
| Cash | 145.8 | 173.0 | 176.8 | 218.2 | 388.6 | 78.1% |
| Short Term Debt | 38.5 | 44.9 | 76.1 | 15.5 | 2.7 | -82.7% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.1 | 0.6 | 0.3 | 0.1 | 0.3 | 136.6% |
Ratios
|
|---|
| Revenue growth | -38.5% | -61.8% | 24.1% | 208.1% | -63.4% | |
| EBITDA growth | -11.9% | 41.4% | 33.1% | 45.3% | -4.8% | |
| EBITDA Margin | 13.3% | 49.3% | 52.8% | 24.9% | 64.8% | 39.9% |
| Net Income Margin | 52.9% | 243.9% | 193.4% | 120.1% | 539.2% | 419.1% |
| CAPEX, % of revenue | 0.0% | 0.8% | 0.3% | 0.1% | 0.3% | 0.3% |
| ROIC | 1.7% | 2.2% | 2.7% | 3.6% | 3.0% | -0.6% |
| ROE | 8.0% | 13.1% | 11.8% | 19.8% | 26.5% | 6.7% |
| Net Debt/EBITDA | -4.5x | -3.8x | -2.2x | -3.1x | -6.2x | -3.1x |
Revenue and profitability
The company's Revenue dropped on 63.4%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 39.9 pp from 24.9% to 64.8% in FY2016.
Net Income marign surged on 419 pp from 120% to 539% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.33%. Upbest Group Ltd's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.23%.
Return on investment
The company operates at good ROE (26.47%) while ROIC is low (3.02%). ROIC decreased slightly on 0.60 pp from 3.6% to 3.0% in FY2016. ROE increased on 6.7 pp from 19.8% to 26.5% in FY2016.
Leverage (Debt)
Debt level is -6.2x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 3.1x from -3.1x to -6.2x in FY2016. Debt dropped on 82.7% while cash surged on 78.1%.
Appendix 1: Peers in Diversified Finan Serv
Below you can find Upbest Group Ltd benchmarking vs. other companies in Diversified Finan Serv 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 |
|---|
| 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% | |
| GF Securities Co Ltd ($1776) | 16.3% | 31.8% | 75.0% | 163.9% | |
| AID Partners Capital Holdings Ltd ($8088) | 0.9% | -79.5% | 655.2% | 162.0% | |
| |
|---|
| Median (64 companies) | 2.8% | 19.3% | 27.6% | 24.0% | 12.0% |
|---|
| Upbest Group Ltd ($335) | | -61.8% | 24.1% | 208.1% | -63.4% |
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 (12 companies) | 64.2% | 75.1% | 88.2% | 90.3% | 64.3% |
|---|
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) | 23.0% | 36.2% | 47.2% | 32.4% | 52.0% |
|---|
| Upbest Group Ltd ($335) | 13.3% | 49.3% | 52.8% | 24.9% | 64.8% |
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% | 1.5% |
|---|
| Upbest Group Ltd ($335) | 0.0% | 0.8% | 0.3% | 0.1% | 0.3% |
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) | 4.4% | 4.2% | 4.9% | 3.5% | 6.0% |
|---|
| Upbest Group Ltd ($335) | 1.7% | 2.2% | 2.7% | 3.6% | 3.0% |
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 (49 companies) | -0.5x | 0.3x | 0.1x | 0.0x | 2.0x |
|---|
| Upbest Group Ltd ($335) | -4.5x | -3.8x | -2.2x | -3.1x | -6.2x |
