Chinney Investments Ltd Net Debt / EBITDA dropped on 80.2x from 93.7x to 13.5x in 2016 while Revenue jumped on 258%
28/06/2016 • About Chinney Investments Ltd (
$216) • By InTwits
Chinney Investments Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Chinney Investments Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 98.0%. At the same time it's a lot of higher than industry average of 33.1%.
- CAPEX is quite volatile: 441 in FY2016, 1,069 in FY2015, 552 in FY2014, 376 in FY2013, 186 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 13.5x while industry average is 8.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chinney Investments Ltd ($216) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,059 | 363 | 496 | 463 | 1,656 | 257.7% |
| Gross Profit | 352 | 166 | 227 | 210 | 540 | 157.5% |
| SG&A | 128 | 129 | 159 | 169 | 208 | 23.1% |
| EBITDA | 238 | 54 | 89 | 62 | 350 | 467.1% |
| Net Income | 128 | 243 | 256 | 1,284 | 310 | -75.9% |
Balance Sheet
|
|---|
| Cash | 546 | 221 | 453 | 229 | 1,730 | 654.0% |
| Short Term Debt | 1,009 | 1,402 | 2,025 | 3,070 | 3,331 | 8.5% |
| Long Term Debt | 1,981 | 2,264 | 2,733 | 2,946 | 3,121 | 5.9% |
Cash flow
|
|---|
| Capex | 186 | 376 | 552 | 1,069 | 441 | -58.7% |
Ratios
|
|---|
| Revenue growth | 198.4% | -65.7% | 36.6% | -6.7% | 257.7% | |
| EBITDA growth | 1,413.4% | -77.2% | 63.6% | -30.3% | 467.1% | |
| Gross Margin | 33.2% | 45.7% | 45.6% | 45.3% | 32.6% | -12.7% |
| EBITDA Margin | 22.4% | 14.9% | 17.8% | 13.3% | 21.2% | 7.8% |
| Net Income Margin | 12.1% | 66.8% | 51.7% | 277.3% | 18.7% | -258.6% |
| SG&A, % of revenue | 12.1% | 35.4% | 32.0% | 36.5% | 12.6% | -23.9% |
| CAPEX, % of revenue | 17.5% | 103.4% | 111.3% | 230.9% | 26.6% | -204.3% |
| ROIC | 2.9% | 0.5% | 0.7% | 0.4% | 2.2% | 1.8% |
| ROE | 5.0% | 8.5% | 7.7% | 29.8% | 6.2% | -23.6% |
| Net Debt/EBITDA | 10.3x | 63.7x | 48.6x | 93.7x | 13.5x | -80.2x |
Revenue and profitability
The company's Revenue surged on 258%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 82.0 pp from -63.6% to 18.4% in FY2016.
Gross Margin dropped on 12.7 pp from 45.3% to 32.6% in FY2016. SG&A as a % of Revenue dropped on 23.9 pp from 36.5% to 12.6% in FY2016.
Net Income marign dropped on 259 pp from 277% to 18.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 26.6% in FY2016. CAPEX/Revenue dropped on 76.8 pp from 103% in FY2013 to 26.6% in FY2016. Average CAPEX/Revenue for the last three years was 123%.Chinney Investments Ltd has spent a lot to CAPEX (126% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (2.21%) and ROE (6.19%). ROIC increased slightly on 1.8 pp from 0.38% to 2.2% in FY2016. ROE dropped on 23.6 pp from 29.8% to 6.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 13.5x and Debt / EBITDA is 18.4x. Net Debt / EBITDA dropped on 80.2x from 93.7x to 13.5x in FY2016. Debt increased on 7.2% while cash surged on 654%.
Appendix 1: Peers in Holding Companies-Divers
Below we provide Chinney Investments Ltd benchmarking against other companies in Holding Companies-Divers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Beijing Development HK Ltd ($154) | 12.5% | | | 1,048.9% | |
| CIAM Group Ltd ($378) | -62.2% | 47.9% | -40.0% | 211.5% | |
| Melco International Development Ltd ($200) | 16.5% | 21.7% | 3.0% | 134.9% | |
| New Century Group Hong Kong Ltd ($234) | -68.9% | 326.7% | -70.3% | 118.2% | |
| Greater China Holdings Ltd ($431) | -35.8% | -72.1% | 67.3% | 110.3% | |
| |
|---|
| Median (43 companies) | 11.4% | 5.0% | 9.6% | 6.1% | -6.0% |
|---|
| Chinney Investments Ltd ($216) | | -65.7% | 36.6% | -6.7% | 257.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Century Group Hong Kong Ltd ($234) | 27.3% | 85.2% | 82.8% | 91.5% | |
| Melco International Development Ltd ($200) | 63.1% | 52.9% | 54.5% | 79.4% | |
| CIAM Group Ltd ($378) | | | | 75.8% | |
| Emperor International Holdings Ltd ($163) | 71.3% | 64.9% | 79.2% | 75.3% | 55.3% |
| Heng Fai Enterprises Ltd ($185) | 89.0% | 89.5% | 58.3% | 74.7% | |
| |
|---|
| Median (38 companies) | 33.2% | 34.6% | 30.8% | 34.2% | 31.4% |
|---|
| Chinney Investments Ltd ($216) | 33.2% | 45.7% | 45.6% | 45.3% | 32.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Century Group Hong Kong Ltd ($234) | -5.5% | 78.8% | 58.3% | 85.0% | |
| Emperor International Holdings Ltd ($163) | 180.7% | 131.8% | 100.6% | 73.9% | -20.1% |
| Pioneer Global Group Ltd ($224) | -0.5% | -9.9% | -11.6% | 64.3% | |
| C C Land Holdings Ltd ($1224) | 27.0% | 23.6% | 24.6% | 55.7% | |
| China Merchants Holdings International Co Ltd ($144) | 56.4% | 50.8% | 45.2% | 55.7% | |
| |
|---|
| Median (43 companies) | 2.2% | 2.0% | 5.8% | 6.2% | -8.7% |
|---|
| Chinney Investments Ltd ($216) | 22.4% | 14.9% | 17.8% | 13.3% | 21.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Heng Fai Enterprises Ltd ($185) | 4.8% | 77.1% | 310.0% | 458.1% | |
| China Investments Holdings Ltd ($132) | 4.8% | 81.9% | 382.2% | 222.5% | |
| Goldin Properties Holdings Ltd ($283) | 2,178.4% | 1,190.0% | 50.1% | 202.4% | 128.8% |
| Carnival Group International Holdings Ltd ($996) | | 137.9% | 61.0% | 133.3% | |
| Emperor International Holdings Ltd ($163) | 100.9% | 48.5% | 105.9% | 110.6% | 60.9% |
| |
|---|
| Median (43 companies) | 2.3% | 3.5% | 5.5% | 6.0% | 15.1% |
|---|
| Chinney Investments Ltd ($216) | 17.5% | 103.4% | 111.3% | 230.9% | 26.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| C C Land Holdings Ltd ($1224) | 7.4% | 5.3% | 7.9% | 15.0% | |
| Chinney Alliance Group Ltd ($385) | 6.4% | 8.1% | 13.6% | 15.0% | |
| Niraku GC Holdings Inc ($1245) | | 19.0% | 18.8% | 13.1% | 2.7% |
| Top Spring International Holdings Ltd ($3688) | 15.6% | 6.9% | 7.3% | 8.0% | |
| New Century Group Hong Kong Ltd ($234) | -1.7% | 11.7% | 1.7% | 7.3% | |
| |
|---|
| Median (43 companies) | -0.2% | 0.0% | 0.8% | 0.2% | 0.3% |
|---|
| Chinney Investments Ltd ($216) | 2.9% | 0.5% | 0.7% | 0.4% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Carnival Group International Holdings Ltd ($996) | | | 23.7x | 92.3x | |
| Multifield International Holdings Ltd ($898) | 3.2x | 7.3x | 3.0x | 55.9x | |
| CIAM Group Ltd ($378) | | | | 32.6x | |
| Chuang's Consortium International Ltd ($367) | 0.7x | 5.0x | | 23.9x | |
| Pioneer Global Group Ltd ($224) | | | | 10.9x | |
| |
|---|
| Median (24 companies) | 2.4x | 2.7x | 2.8x | 2.4x | 4.4x |
|---|
| Chinney Investments Ltd ($216) | 10.3x | 63.7x | 48.6x | 93.7x | 13.5x |
