Easyknit International Holdings Ltd Debt dropped on 41.3% while Revenue jumped on 48.5%
29/06/2016 • About Easyknit International Holdings Ltd (
$1218) • By InTwits
Easyknit International Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Easyknit International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 39.9%. At the same time it's a lot of higher than industry average of 33.1%.
- CAPEX is quite volatile: 4.5 in FY2016, 297 in FY2015, 3.1 in FY2014, 271 in FY2013, 165 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.1%
- It operates with high leverage: Net Debt/EBITDA is 5.9x while industry average is 3.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Easyknit International Holdings Ltd ($1218) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 203.6 | 524.4 | 275.8 | 457.0 | 678.5 | 48.5% |
| Gross Profit | 87.4 | 207.0 | 139.5 | 202.0 | 286.2 | 41.7% |
| SG&A | 40.4 | 80.0 | 81.0 | 72.8 | 141.7 | 94.7% |
| EBITDA | 25.4 | 139.1 | 66.9 | 131.5 | 150.6 | 14.5% |
| Net Income | 101.2 | 647.0 | 13.0 | 202.9 | 138.9 | -31.5% |
Balance Sheet
|
|---|
| Cash | 403.4 | 340.9 | 601.1 | 378.5 | 12.3 | -96.7% |
| Short Term Debt | 21.0 | 30.9 | 34.6 | 902.8 | 224.8 | -75.1% |
| Long Term Debt | 361.5 | 724.7 | 1,706.6 | 635.1 | 677.2 | 6.6% |
Cash flow
|
|---|
| Capex | 164.9 | 271.2 | 3.1 | 296.6 | 4.5 | -98.5% |
Ratios
|
|---|
| Revenue growth | 409.1% | 157.6% | -47.4% | 65.7% | 48.5% | |
| EBITDA growth | -45.2% | 447.5% | -51.9% | 96.5% | 14.5% | |
| Gross Margin | 42.9% | 39.5% | 50.6% | 44.2% | 42.2% | -2.0% |
| EBITDA Margin | 12.5% | 26.5% | 24.3% | 28.8% | 22.2% | -6.6% |
| Net Income Margin | 49.7% | 123.4% | 4.7% | 44.4% | 20.5% | -23.9% |
| SG&A, % of revenue | 19.8% | 15.3% | 29.4% | 15.9% | 20.9% | 5.0% |
| CAPEX, % of revenue | 81.0% | 51.7% | 1.1% | 64.9% | 0.7% | -64.2% |
| ROIC | 1.0% | 4.0% | 1.4% | 2.4% | 3.1% | 0.7% |
| ROE | 4.8% | 25.8% | 0.5% | 7.1% | 4.6% | -2.5% |
| Net Debt/EBITDA | -0.8x | 3.0x | 17.0x | 8.8x | 5.9x | -2.9x |
Revenue and profitability
The company's Revenue surged on 48.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 82.0 pp from -63.6% to 18.4% in FY2016.
Gross Margin decreased on 2.0 pp from 44.2% to 42.2% in FY2016. SG&A as a % of Revenue increased on 5.0 pp from 15.9% to 20.9% in FY2016.
Net Income marign dropped on 23.9 pp from 44.4% to 20.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.66% in FY2016. The company showed big decline in CAPEX/Revenue of 51.1 pp from 51.7% in FY2013 to 0.66% in FY2016. It's average level of CAPEX/Revenue for the last three years was 22.2%.
Return on investment
The company operates at low ROIC (3.14%) and ROE (4.58%). ROIC increased slightly on 0.72 pp from 2.4% to 3.1% in FY2016. ROE decreased on 2.5 pp from 7.1% to 4.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.9x and Debt / EBITDA is 6.0x. Net Debt / EBITDA dropped on 2.9x from 8.8x to 5.9x in FY2016. Debt dropped on 41.3% while cash dropped on 96.7%.
Appendix 1: Peers in Real Estate
Below you can find Easyknit International Holdings Ltd benchmarking vs. other companies in Real Estate 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 |
|---|
| Guangdong Land Holdings Ltd ($124) | | | | 24,971.2% | |
| GR Properties Ltd ($108) | 21.6% | -82.9% | 14.6% | 1,203.6% | |
| Wanda Hotel Development Co Ltd ($169) | | -51.4% | -86.2% | 1,071.2% | |
| Henderson Investment Ltd ($97) | -78.9% | | | 737.1% | |
| ITC Properties Group Ltd ($199) | | -95.2% | 75.7% | 678.6% | 206.4% |
| |
|---|
| Median (179 companies) | 15.6% | 13.1% | 5.3% | 4.2% | 5.7% |
|---|
| Easyknit International Holdings Ltd ($1218) | | 157.6% | -47.4% | 65.7% | 48.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 79.0% | 95.2% | 97.9% | 99.9% | |
| Tern Properties Co Ltd ($277) | 96.7% | 98.4% | 98.4% | 98.7% | 98.8% |
| YT Realty Group Ltd ($75) | 94.4% | 96.6% | 96.7% | 97.6% | |
| Wah Ha Realty Co Ltd ($278) | 96.3% | 96.0% | 93.2% | 95.9% | 92.9% |
| Soundwill Holdings Ltd ($878) | 53.1% | 74.5% | 46.9% | 95.7% | |
| |
|---|
| Median (160 companies) | 41.9% | 41.9% | 39.1% | 38.2% | 50.7% |
|---|
| Easyknit International Holdings Ltd ($1218) | 42.9% | 39.5% | 50.6% | 44.2% | 42.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chinese Estates Holdings Ltd ($127) | 356.2% | 91.6% | 195.5% | 397.4% | |
| Zall Development Group Ltd ($2098) | 105.3% | 133.1% | 143.2% | 213.9% | |
| SOHO China Ltd ($410) | 113.6% | 80.8% | 104.0% | 201.9% | |
| Beijing Properties Holdings Ltd ($925) | -606.3% | 2,162.6% | 224.3% | 186.5% | |
| Swire Properties Ltd ($1972) | 154.5% | 114.6% | 73.2% | 100.3% | |
| |
|---|
| Median (179 companies) | 29.3% | 28.5% | 27.8% | 23.4% | 13.9% |
|---|
| Easyknit International Holdings Ltd ($1218) | 12.5% | 26.5% | 24.3% | 28.8% | 22.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 18.0% | 27,965.5% | 4,834.8% | |
| China Oceanwide Holdings Ltd ($715) | 0.8% | 0.3% | 2.0% | 880.6% | |
| Madex International Holdings Ltd ($231) | 174.5% | 519.7% | 205.3% | 350.6% | |
| Pacific Century Premium Developments Ltd ($432) | 2.9% | 323.1% | 351.2% | 340.6% | |
| Hon Kwok Land Investment Co Ltd ($160) | 20.6% | 157.3% | 144.5% | 296.3% | 28.1% |
| |
|---|
| Median (179 companies) | 5.6% | 6.1% | 4.8% | 3.2% | 1.8% |
|---|
| Easyknit International Holdings Ltd ($1218) | 81.0% | 51.7% | 1.1% | 64.9% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hydoo International Holding Ltd ($1396) | 44.3% | 62.0% | 12.9% | 16.6% | |
| Gemdale Properties & Investment Corp Ltd ($535) | 15.3% | 19.6% | 10.8% | 15.9% | |
| China Overseas Land & Investment Ltd ($688) | | 15.1% | 18.5% | 15.4% | 13.0% |
| Colour Life Services Group Co Ltd ($1778) | 44.2% | 47.9% | 29.3% | 14.5% | |
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 26.8% | 19.6% | 12.3% | 14.4% | |
| |
|---|
| Median (181 companies) | 4.2% | 4.1% | 4.2% | 2.5% | 1.8% |
|---|
| Easyknit International Holdings Ltd ($1218) | 1.0% | 4.0% | 1.4% | 2.4% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shui On Land Ltd ($272) | 22.1x | 13.2x | 17.1x | 54.2x | |
| Beijing Capital Land Ltd ($2868) | 7.1x | 4.6x | 11.7x | 49.1x | |
| Talent Property Group Ltd ($760) | | | | 43.0x | |
| Mingfa Group International Co Ltd ($846) | 2.5x | 3.0x | 6.3x | 42.9x | |
| Sunshine 100 China Holdings Ltd ($2608) | 9.9x | 12.4x | 12.9x | 42.3x | |
| |
|---|
| Median (136 companies) | 2.4x | 2.7x | 3.0x | 3.2x | 3.0x |
|---|
| Easyknit International Holdings Ltd ($1218) | -0.8x | 3.0x | 17.0x | 8.8x | 5.9x |
