New Century Group Hong Kong Ltd reports 354% CAPEX growth in 2016 while 78.2% Revenue decline
29/06/2016 • About New Century Group Hong Kong Ltd (
$234) • By InTwits
New Century Group Hong Kong Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- New Century Group Hong Kong Ltd is a company in decline: FY2016 revenue growth was -78.2%, 5 years revenue CAGR was -28.5%
- EBITDA Margin is quite volatile: 33.8% in FY2016, 85.0% in FY2015, 58.3% in FY2014, 78.8% in FY2013, -5.5% in FY2012
- New Century Group Hong Kong Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 188.5%. At the same time it's a lot of higher than industry average of 45.6%.
- CAPEX is quite volatile: 216 in FY2016, 47.6 in FY2015, 96.7 in FY2014, 2.2 in FY2013, 52.0 in FY2012
- The company has unprofitable business model: ROIC is at -0.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
New Century Group Hong Kong Ltd ($234) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 53.5 | 228.1 | 67.8 | 147.9 | 32.2 | -78.2% |
| Gross Profit | 14.6 | 194.5 | 56.1 | 135.4 | 14.0 | -89.7% |
| SG&A | 29.9 | 34.0 | 31.8 | 25.4 | 27.2 | 7.1% |
| EBITDA | -2.9 | 179.9 | 39.5 | 125.7 | 10.9 | -91.3% |
| Net Income | 17.2 | 155.6 | 29.9 | 98.8 | -32.4 | -132.8% |
Balance Sheet
|
|---|
| Cash | 275.5 | 424.9 | 571.0 | 513.6 | 298.2 | -41.9% |
| Short Term Debt | 29.0 | 19.3 | 96.2 | 6.6 | 3.7 | -44.3% |
| Long Term Debt | 0.0 | 0.0 | 26.0 | 23.1 | 22.9 | -0.8% |
Cash flow
|
|---|
| Capex | 52.0 | 2.2 | 96.7 | 47.6 | 215.9 | 353.6% |
Ratios
|
|---|
| Revenue growth | -68.9% | 326.7% | -70.3% | 118.2% | -78.2% | |
| EBITDA growth | -102.1% | -6,220.6% | -78.0% | 218.2% | -91.3% | |
| Gross Margin | 27.3% | 85.2% | 82.8% | 91.5% | 43.4% | -48.2% |
| EBITDA Margin | -5.5% | 78.8% | 58.3% | 85.0% | 33.8% | -51.2% |
| Net Income Margin | 32.1% | 68.2% | 44.1% | 66.8% | -100.4% | -167.2% |
| SG&A, % of revenue | 55.8% | 14.9% | 46.9% | 17.2% | 84.4% | 67.2% |
| CAPEX, % of revenue | 97.2% | 1.0% | 142.7% | 32.2% | 669.5% | 637.4% |
| ROIC | -1.7% | 11.7% | 1.7% | 7.3% | -0.6% | -7.9% |
| ROE | 1.3% | 11.2% | 2.1% | 6.8% | -2.3% | -9.1% |
| Net Debt/EBITDA | | -2.3x | -11.4x | -3.9x | -25.0x | -21.1x |
Revenue and profitability
New Century Group Hong Kong Ltd's Revenue dropped on 78.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.90 pp from 73.6% to 74.5% in FY2016.
Gross Margin dropped on 48.2 pp from 91.5% to 43.4% in FY2016. SG&A as a % of Revenue jumped on 67.2 pp from 17.2% to 84.4% in FY2016.
Net Income marign dropped on 167 pp from 66.8% to -100% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 670%. New Century Group Hong Kong Ltd's CAPEX/Revenue surged on 669 pp from 0.95% in FY2013 to 670% in FY2016. It's average CAPEX/Revenue for the last three years was 281%.Battling declining revenue New Century Group Hong Kong Ltd made large investments to CAPEX (1,984% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.58%) and ROE (-2.27%). ROIC decreased on 7.9 pp from 7.3% to -0.58% in FY2016. ROE decreased on 9.1 pp from 6.8% to -2.3% in FY2016.
Leverage (Debt)
Debt level is -25.0x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA dropped on 21.1x from -3.9x to -25.0x in FY2016. Debt dropped on 10.5% while cash dropped on 41.9%.
Appendix 1: Peers in Holding Companies-Divers
Below we provide New Century Group Hong Kong 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% | |
| Greater China Holdings Ltd ($431) | -35.8% | -72.1% | 67.3% | 110.3% | |
| Heng Fai Enterprises Ltd ($185) | 8.2% | -30.5% | -42.6% | 86.7% | |
| |
|---|
| Median (43 companies) | 11.0% | 4.1% | 15.5% | 0.5% | -4.5% |
|---|
| New Century Group Hong Kong Ltd ($234) | | 326.7% | -70.3% | 118.2% | -78.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | |
| Century Legend Holdings Ltd ($79) | 70.1% | 72.3% | 71.0% | 70.3% | |
| |
|---|
| Median (38 companies) | 33.4% | 34.6% | 30.8% | 34.2% | 36.7% |
|---|
| New Century Group Hong Kong Ltd ($234) | 27.3% | 85.2% | 82.8% | 91.5% | 43.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | 66.8% |
| 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% | |
| Magnificent Estates ($201) | 45.5% | 47.8% | 53.0% | 40.6% | |
| |
|---|
| Median (43 companies) | 3.0% | 2.0% | 5.8% | 6.2% | 6.9% |
|---|
| New Century Group Hong Kong Ltd ($234) | -5.5% | 78.8% | 58.3% | 85.0% | 33.8% |
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% | |
| Chinney Investments Ltd ($216) | 17.5% | 103.4% | 111.3% | 230.9% | 26.6% |
| 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% | |
| |
|---|
| Median (43 companies) | 2.3% | 3.7% | 5.5% | 6.0% | 9.6% |
|---|
| New Century Group Hong Kong Ltd ($234) | 97.2% | 1.0% | 142.7% | 32.2% | 669.5% |
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% | |
| Chuang's China Investments Ltd ($298) | 22.9% | 1.5% | 2.2% | 6.1% | 0.6% |
| |
|---|
| Median (43 companies) | 0.1% | 0.0% | 0.7% | 0.2% | 1.3% |
|---|
| New Century Group Hong Kong Ltd ($234) | -1.7% | 11.7% | 1.7% | 7.3% | -0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chinney Investments Ltd ($216) | 10.3x | 63.7x | 48.6x | 93.7x | 13.5x |
| 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 | 8.7x |
| |
|---|
| Median (24 companies) | 2.4x | 3.1x | 3.0x | 2.9x | 10.0x |
|---|
| New Century Group Hong Kong Ltd ($234) | | -2.3x | -11.4x | -3.9x | -25.0x |
