Huajun Holdings Ltd reports 1,161% CAPEX growth in 2016 and 73.2% Revenue growth
29/06/2016 • About Huajun Holdings Ltd (
$377) • By InTwits
Huajun Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Huajun Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -0.3%
- Huajun Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.2%. At the same time it's in pair with industry average of 15.6%.
- CAPEX is quite volatile: 677 in FY2016, 53.7 in FY2015, 27.5 in FY2014, 26.2 in FY2013, 117 in FY2012
- The company has unprofitable business model: ROIC is at -0.3%
- It operates with high leverage: Net Debt/EBITDA is 19.9x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huajun Holdings Ltd ($377) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 634 | 655 | 677 | 748 | 1,296 | 73.2% |
| Gross Profit | 111 | 128 | 120 | 167 | 243 | 45.9% |
| SG&A | 105 | 114 | 124 | 153 | 261 | 70.2% |
| EBITDA | 47 | 54 | 39 | 56 | 50 | -11.4% |
| Net Income | 19 | -9 | 124 | 242 | 33 | -86.5% |
Balance Sheet
|
|---|
| Cash | 89 | 87 | 99 | 1,231 | 133 | -89.2% |
| Short Term Debt | 90 | 103 | 127 | 733 | 858 | 17.1% |
| Long Term Debt | 0 | 0 | 0 | 1,052 | 264 | -74.9% |
Cash flow
|
|---|
| Capex | 117 | 26 | 28 | 54 | 677 | 1,161.2% |
Ratios
|
|---|
| Revenue growth | 11.2% | 3.3% | 3.4% | 10.4% | 73.2% | |
| EBITDA growth | -6.6% | 14.7% | -29.0% | 45.3% | -11.4% | |
| Gross Margin | 17.5% | 19.5% | 17.7% | 22.3% | 18.8% | -3.5% |
| EBITDA Margin | 7.5% | 8.3% | 5.7% | 7.5% | 3.8% | -3.7% |
| Net Income Margin | 3.0% | -1.4% | 18.3% | 32.4% | 2.5% | -29.9% |
| SG&A, % of revenue | 16.6% | 17.4% | 18.3% | 20.5% | 20.2% | -0.4% |
| CAPEX, % of revenue | 18.4% | 4.0% | 4.1% | 7.2% | 52.3% | 45.1% |
| ROIC | 1.2% | 2.5% | -0.1% | 0.7% | -0.3% | -1.0% |
| ROE | 4.0% | -1.8% | 22.4% | 25.5% | 1.4% | -24.1% |
| Net Debt/EBITDA | 0.0x | 0.3x | 0.7x | 9.9x | 19.9x | 10.0x |
Revenue and profitability
The company's Revenue surged on 73.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.8 pp from -10.1% to -6.3% in FY2016.
Gross Margin decreased on 3.5 pp from 22.3% to 18.8% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign dropped on 29.9 pp from 32.4% to 2.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 52.3%. The company showed fast CAPEX/Revenue growth of 48.3 pp from 4.0% in FY2013 to 52.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 21.2%.The company has spent a lot to CAPEX (1,363% of EBITDA) to secure its growth.
Return on investment
The company operates at negative ROIC (-0.26%) and low but positive ROE (1.38%). ROIC decreased slightly on 0.98 pp from 0.72% to -0.26% in FY2016. ROE dropped on 24.1 pp from 25.5% to 1.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 19.9x and Debt / EBITDA is 22.6x. Net Debt / EBITDA surged on 10.0x from 9.9x to 19.9x in FY2016. Debt dropped on 37.1% while cash dropped on 89.2%.
Appendix 1: Peers in Packaging&Containers
Below you can find Huajun Holdings Ltd benchmarking vs. other companies in Packaging&Containers 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 |
|---|
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 34.9% | 17.5% | -6.5% | 69.5% | |
| Hao Tian Development Group Ltd ($474) | | | | 51.0% | 113.4% |
| Jin Cai Holdings Co Ltd ($1250) | 2.1% | -6.3% | -3.1% | 40.8% | |
| Huaxi Holdings Co Ltd ($1689) | | 5.0% | -5.1% | 12.5% | -15.3% |
| Starlite Holdings Ltd ($403) | | 5.0% | 2.0% | 9.3% | 1.8% |
| |
|---|
| Median (19 companies) | 3.4% | 5.3% | 0.7% | 2.9% | 1.8% |
|---|
| Huajun Holdings Ltd ($377) | | 3.3% | 3.4% | 10.4% | 73.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 36.6% | 39.1% | 37.7% | 44.7% | |
| Huaxi Holdings Co Ltd ($1689) | 19.0% | 28.2% | 40.9% | 37.5% | 37.3% |
| China For You Group Co Ltd ($572) | 12.4% | | 34.6% | 31.9% | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 34.3% | 36.5% | 32.8% | 31.4% | |
| Kith Holdings Ltd ($1201) | 30.8% | 31.9% | 31.4% | 30.5% | |
| |
|---|
| Median (18 companies) | 20.9% | 20.7% | 23.4% | 21.9% | 29.7% |
|---|
| Huajun Holdings Ltd ($377) | 17.5% | 19.5% | 17.7% | 22.3% | 18.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huaxi Holdings Co Ltd ($1689) | 14.5% | 21.2% | 27.1% | 29.1% | 25.7% |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 27.9% | 30.7% | 27.4% | 26.3% | |
| Greatview Aseptic Packaging Co Ltd ($468) | 25.9% | 23.1% | 21.6% | 23.4% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 14.6% | 17.2% | 18.7% | 21.6% | |
| Kith Holdings Ltd ($1201) | 21.6% | 19.4% | 20.1% | 20.5% | |
| |
|---|
| Median (19 companies) | 14.5% | 15.6% | 13.2% | 11.6% | 10.6% |
|---|
| Huajun Holdings Ltd ($377) | 7.5% | 8.3% | 5.7% | 7.5% | 3.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 0.0% | 0.0% | 3.0% | 122.3% | |
| Sheen Tai Holdings Grp Co Ltd ($1335) | 3.7% | 1.2% | 3.1% | 42.2% | |
| Hao Tian Development Group Ltd ($474) | 81.6% | | 13.0% | 25.4% | 4.3% |
| Lee & Man Paper Manufacturing Ltd ($2314) | 19.7% | 13.7% | 13.1% | 17.1% | |
| Kith Holdings Ltd ($1201) | 3.7% | 4.8% | 3.3% | 13.3% | |
| |
|---|
| Median (19 companies) | 5.2% | 5.0% | 4.1% | 5.5% | 1.9% |
|---|
| Huajun Holdings Ltd ($377) | 18.4% | 4.0% | 4.1% | 7.2% | 52.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huaxi Holdings Co Ltd ($1689) | 21.4% | 28.5% | 26.2% | 23.6% | 16.6% |
| Greatview Aseptic Packaging Co Ltd ($468) | 20.2% | 18.9% | 15.7% | 17.7% | |
| China Aluminum Cans Holdings Ltd ($6898) | 19.7% | 14.6% | 20.2% | 17.1% | |
| Kith Holdings Ltd ($1201) | 6.9% | 5.6% | 7.8% | 12.2% | |
| Lee & Man Paper Manufacturing Ltd ($2314) | 7.2% | 8.7% | 8.0% | 9.2% | |
| |
|---|
| Median (19 companies) | 8.1% | 7.0% | 7.3% | 5.4% | 13.3% |
|---|
| Huajun Holdings Ltd ($377) | 1.2% | 2.5% | -0.1% | 0.7% | -0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Haijing Holdings Ltd ($1106) | 6.4x | 6.1x | 6.2x | 10.1x | |
| Zhengye International Holdings Co Ltd ($3363) | 6.2x | 6.4x | 7.8x | 5.5x | |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 9.4x | 6.7x | 7.4x | 4.4x | |
| Jin Bao Bao Holdings Ltd ($1239) | -1.7x | -1.7x | -1.2x | 4.2x | |
| Come Sure Group Holdings Ltd ($794) | 3.6x | 4.1x | 3.8x | 3.4x | |
| |
|---|
| Median (16 companies) | 1.2x | 0.9x | 0.5x | 1.3x | -1.4x |
|---|
| Huajun Holdings Ltd ($377) | 0.0x | 0.3x | 0.7x | 9.9x | 19.9x |
