Hong Kong Food Investment Holdings Ltd Net Income dropped on 172% and Revenue dropped on 16.8%
29/06/2016 • About Hong Kong Food Investment Holdings Ltd (
$60) • By InTwits
Hong Kong Food Investment Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hong Kong Food Investment Holdings Ltd is a company in decline: FY2016 revenue growth was -16.8%, 5 years revenue CAGR was -16.3%
- The company operates at negative EBITDA Margin: -11.1%
- Hong Kong Food Investment Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -8.5% for the sames years0
- Hong Kong Food Investment Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 6.0%.
- CAPEX is quite volatile: 0.71 in FY2016, 0.94 in FY2015, 8.0 in FY2014, 15.1 in FY2013, 0.20 in FY2012
- The company has unprofitable business model: ROIC is at -4.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hong Kong Food Investment Holdings Ltd ($60) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 711.9 | 386.1 | 231.6 | 216.8 | 180.4 | -16.8% |
| Gross Profit | -14.0 | -7.6 | 24.6 | 21.9 | 19.8 | -9.5% |
| SG&A | | 45.5 | 52.5 | 45.7 | 47.8 | 4.6% |
| EBITDA | -41.2 | -48.6 | -21.2 | -16.3 | -20.0 | |
| Net Income | -37.2 | -23.6 | 25.3 | 21.6 | -15.5 | -172.1% |
Balance Sheet
|
|---|
| Cash | 64.0 | 65.9 | 42.3 | 49.4 | 36.1 | -26.9% |
| Short Term Debt | 255.3 | 183.8 | 147.8 | 164.2 | 148.0 | -9.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.2 | 15.1 | 8.0 | 0.9 | 0.7 | -24.2% |
Ratios
|
|---|
| Revenue growth | 62.0% | -45.8% | -40.0% | -6.4% | -16.8% | |
| EBITDA growth | 53.5% | 17.9% | -56.4% | -23.1% | 22.6% | |
| Gross Margin | -2.0% | -2.0% | 10.6% | 10.1% | 11.0% | 0.9% |
| EBITDA Margin | -5.8% | -12.6% | -9.1% | -7.5% | -11.1% | -3.6% |
| Net Income Margin | -5.2% | -6.1% | 10.9% | 9.9% | -8.6% | -18.6% |
| SG&A, % of revenue | | 11.8% | 22.7% | 21.1% | 26.5% | 5.4% |
| CAPEX, % of revenue | 0.0% | 3.9% | 3.4% | 0.4% | 0.4% | -0.0% |
| ROIC | -6.8% | -8.2% | -4.7% | -3.9% | -4.5% | -0.7% |
| ROE | -8.3% | -5.7% | 6.1% | 4.9% | -3.6% | -8.6% |
Revenue and profitability
Hong Kong Food Investment Holdings Ltd's Revenue dropped on 16.8%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.6 pp from -7.5% to -11.1% in FY2016.
Gross Margin increased slightly on 0.88 pp from 10.1% to 11.0% in FY2016. SG&A as a % of Revenue increased on 5.4 pp from 21.1% to 26.5% in FY2016.
Net Income marign dropped on 18.6 pp from 9.9% to -8.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Hong Kong Food Investment Holdings Ltd's CAPEX/Revenue was 0.40% in FY2016. CAPEX/Revenue decreased on 3.5 pp from 3.9% in FY2013 to 0.40% in FY2016. Average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at negative ROIC (-4.55%) and ROE (-3.62%). ROIC decreased slightly on 0.67 pp from -3.9% to -4.5% in FY2016. ROE decreased on 8.6 pp from 4.9% to -3.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt decreased on 9.9% while cash dropped on 26.9%.
Appendix 1: Peers in Food
Below we provide Hong Kong Food Investment Holdings Ltd benchmarking against other companies in Food 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 |
|---|
| Imperial Pacific International Holdings Ltd ($1076) | -27.6% | -18.5% | 2.7% | 70.3% | |
| China Shengmu Organic Milk Ltd ($1432) | 80.0% | 63.2% | 86.4% | 45.4% | |
| Chinese Food and Beverage Group ($8272) | 207.7% | 149.2% | 26.8% | 31.6% | |
| Huisheng International Holdings Ltd ($1340) | -2.4% | 5.6% | 8.7% | 25.9% | |
| Jiashili Group Ltd ($1285) | 14.9% | 15.1% | 12.3% | 19.8% | |
| |
|---|
| Median (42 companies) | 10.3% | 9.0% | 5.5% | -2.9% | -16.6% |
|---|
| Hong Kong Food Investment Holdings Ltd ($60) | | -45.8% | -40.0% | -6.4% | -16.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hung Fook Tong Group Holdings Ltd ($1446) | 60.7% | 60.0% | 58.7% | 60.7% | |
| Honworld Group Ltd ($2226) | 57.2% | 59.0% | 57.8% | 56.4% | |
| Yashili International Holdings Ltd ($1230) | 53.7% | 53.5% | 51.2% | 50.8% | |
| Natural Dairy NZ Holdings Ltd ($462) | -13.7% | 27.5% | 48.8% | 49.6% | |
| China Shengmu Organic Milk Ltd ($1432) | 33.4% | 42.9% | 50.2% | 47.7% | |
| |
|---|
| Median (41 companies) | 16.8% | 20.3% | 22.2% | 23.7% | 20.8% |
|---|
| Hong Kong Food Investment Holdings Ltd ($60) | -2.0% | -2.0% | 10.6% | 10.1% | 11.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shenguan Holdings Group Ltd ($829) | 58.7% | 59.2% | 54.5% | 43.6% | |
| Honworld Group Ltd ($2226) | 44.4% | 42.1% | 42.0% | 42.9% | |
| China Shengmu Organic Milk Ltd ($1432) | 31.5% | 38.3% | 47.1% | 41.9% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 45.1% | 47.9% | 47.1% | 37.2% | 36.0% |
| YuanShengTai Dairy Farm Ltd ($1431) | 40.3% | 48.4% | 47.1% | 35.4% | |
| |
|---|
| Median (41 companies) | 8.1% | 7.1% | 7.9% | 8.5% | 4.6% |
|---|
| Hong Kong Food Investment Holdings Ltd ($60) | -5.8% | -12.6% | -9.1% | -7.5% | -11.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 98.2% | 29.8% | 132.0% | 109.8% | 37.5% |
| Imperial Pacific International Holdings Ltd ($1076) | 0.0% | 0.0% | 15.6% | 88.5% | |
| China Modern Dairy Holdings Ltd ($1117) | 50.6% | | 18.7% | 42.4% | |
| Labixiaoxin Snacks Group Ltd ($1262) | 13.3% | 10.3% | 14.6% | 32.0% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 26.1% | 18.3% | 43.4% | 30.1% | |
| |
|---|
| Median (40 companies) | 5.9% | 5.6% | 5.1% | 4.9% | 0.1% |
|---|
| Hong Kong Food Investment Holdings Ltd ($60) | 0.0% | 3.9% | 3.4% | 0.4% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Major Holdings Ltd ($8209) | | 23.1% | 13.8% | 22.3% | 7.8% |
| Jiashili Group Ltd ($1285) | 45.6% | 51.8% | 27.8% | 22.2% | |
| Want Want China Holdings Ltd ($151) | 27.9% | 29.4% | 22.8% | 21.8% | |
| China Shengmu Organic Milk Ltd ($1432) | 16.4% | 19.6% | 22.5% | 17.3% | |
| Honworld Group Ltd ($2226) | 50.4% | 44.5% | 23.6% | 16.5% | |
| |
|---|
| Median (43 companies) | 8.4% | 7.3% | 7.4% | 5.6% | 2.7% |
|---|
| Hong Kong Food Investment Holdings Ltd ($60) | -6.8% | -8.2% | -4.7% | -3.9% | -4.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ausnutria Dairy Corp Ltd ($1717) | -1.4x | 0.8x | 1.7x | 27.9x | |
| Beijing Jingkelong Co Ltd ($814) | 5.0x | 4.8x | 5.3x | 9.3x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.8x | 3.8x | 4.5x | 5.6x | |
| China Kangda Food Co Ltd ($834) | 2.8x | 2.5x | 2.3x | 5.4x | |
| China Modern Dairy Holdings Ltd ($1117) | 3.7x | 5.2x | 4.1x | 5.3x | |
| |
|---|
| Median (33 companies) | -0.1x | 0.8x | 0.7x | 1.2x | 4.4x |
|---|
