Sun East Technology Holdings Ltd Debt jumped on 35.6% and EBITDA increased on 6.5%
29/06/2016 • About Sun East Technology Holdings Ltd (
$365) • By InTwits
Sun East Technology Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun East Technology Holdings Ltd is a company in decline: FY2016 revenue growth was -13.3%, 5 years revenue CAGR was -3.0%
- EBITDA Margin is quite volatile: 2.5% in FY2016, 2.1% in FY2015, 2.0% in FY2014, 2.3% in FY2013, 4.8% in FY2012
- Sun East Technology Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun East Technology Holdings Ltd ($365) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 632.8 | 565.4 | 787.6 | 838.2 | 727.0 | -13.3% |
| Gross Profit | 100.4 | 80.4 | 108.3 | 106.5 | 98.3 | -7.7% |
| SG&A | 92.5 | 91.4 | 109.5 | 119.3 | 105.3 | -11.8% |
| EBITDA | 30.1 | 13.0 | 15.6 | 17.4 | 18.5 | 6.5% |
| Net Income | 13.0 | 5.7 | 9.4 | 2.5 | -8.4 | -432.8% |
Balance Sheet
|
|---|
| Cash | 165.3 | 137.9 | 88.5 | 51.7 | 57.2 | 10.7% |
| Short Term Debt | 105.3 | 48.3 | 61.0 | 105.5 | 143.3 | 35.8% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.3 | 0.2 | -37.4% |
Cash flow
|
|---|
| Capex | 9.5 | 9.9 | 3.2 | 9.4 | 0.9 | -90.7% |
Ratios
|
|---|
| Revenue growth | -25.1% | -10.7% | 39.3% | 6.4% | -13.3% | |
| EBITDA growth | -19.8% | -56.6% | 19.8% | 11.2% | 6.5% | |
| Gross Margin | 15.9% | 14.2% | 13.8% | 12.7% | 13.5% | 0.8% |
| EBITDA Margin | 4.8% | 2.3% | 2.0% | 2.1% | 2.5% | 0.5% |
| Net Income Margin | 2.1% | 1.0% | 1.2% | 0.3% | -1.2% | -1.5% |
| SG&A, % of revenue | 14.6% | 16.2% | 13.9% | 14.2% | 14.5% | 0.2% |
| CAPEX, % of revenue | 1.5% | 1.7% | 0.4% | 1.1% | 0.1% | -1.0% |
| ROIC | 4.0% | 0.8% | 1.3% | 1.4% | 1.6% | 0.2% |
| ROE | 4.6% | 1.9% | 2.9% | 0.8% | -2.5% | -3.3% |
| Net Debt/EBITDA | -2.0x | -6.9x | -1.8x | 3.1x | 4.7x | 1.5x |
Revenue and profitability
The company's Revenue dropped on 13.3%. EBITDA Margin showed almost no change in FY2016.
Gross Margin increased slightly on 0.81 pp from 12.7% to 13.5% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 1.5 pp from 0.30% to -1.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Sun East Technology Holdings Ltd had CAPEX/Revenue of 0.12%. The company's CAPEX/Revenue decreased slightly on 1.6 pp from 1.7% in FY2013 to 0.12% in FY2016. Average CAPEX/Revenue for the last three years was 0.55%.
Return on investment
The company operates at low but positive ROIC (1.60%) and negative ROE (-2.55%). ROIC showed almost no change in FY2016. ROE decreased on 3.3 pp from 0.75% to -2.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.7x and Debt / EBITDA is 7.7x. Net Debt / EBITDA jumped on 1.5x from 3.1x to 4.7x in FY2016. Debt surged on 35.6% while cash surged on 10.7%.
Appendix 1: Peers in Machinery-Diversified
Below we provide Sun East Technology Holdings Ltd benchmarking against other companies in Machinery-Diversified 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 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 2.6% | -8.9% | 37.3% | 52.8% | |
| North Asia Strategic Holdings Ltd ($8080) | | -29.1% | 23.7% | 42.6% | -3.9% |
| Huazhang Technology Holding Ltd ($1673) | 131.6% | 9.5% | 22.9% | 23.5% | |
| Sinoref Holdings Ltd ($1020) | -0.2% | -42.2% | 29.2% | 19.9% | |
| LK Technology Holdings Ltd ($558) | | -15.0% | 3.7% | 18.5% | -10.3% |
| |
|---|
| Median (20 companies) | -3.6% | -3.3% | -0.2% | -8.2% | -10.3% |
|---|
| Sun East Technology Holdings Ltd ($365) | | -10.7% | 39.3% | 6.4% | -13.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 49.1% | 51.7% | 54.9% | 65.5% | |
| Renheng Enterprise Holdings Ltd ($3628) | 44.3% | 44.8% | 45.4% | 48.9% | |
| Haitian International Holdings Ltd ($1882) | 30.1% | 31.6% | 32.4% | 33.0% | |
| CHTC Fong's Industries Co Ltd ($641) | 24.4% | 30.0% | 32.3% | 31.2% | |
| Good Friend International Holdings Inc ($2398) | 20.1% | 22.9% | 26.5% | 27.1% | |
| |
|---|
| Median (20 companies) | 25.3% | 22.8% | 20.2% | 21.0% | 19.4% |
|---|
| Sun East Technology Holdings Ltd ($365) | 15.9% | 14.2% | 13.8% | 12.7% | 13.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 24.0% | 26.9% | 28.0% | 28.5% | |
| Haitian International Holdings Ltd ($1882) | 19.7% | 20.7% | 21.9% | 22.8% | |
| Renheng Enterprise Holdings Ltd ($3628) | 24.7% | 23.9% | 20.7% | 17.3% | |
| Huazhang Technology Holding Ltd ($1673) | 11.6% | 11.2% | 12.5% | 11.3% | |
| Good Friend International Holdings Inc ($2398) | 6.7% | 9.1% | 12.9% | 9.9% | |
| |
|---|
| Median (20 companies) | 11.3% | 8.7% | 8.6% | 5.7% | -1.0% |
|---|
| Sun East Technology Holdings Ltd ($365) | 4.8% | 2.3% | 2.0% | 2.1% | 2.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 2.3% | 10.1% | 7.8% | 31.9% | |
| Honghua Group Ltd ($196) | 11.5% | 14.6% | 6.8% | 27.3% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 20.5% | 20.3% | 11.6% | 15.6% | |
| Shenji Group Kunming Machine Tool Co Ltd ($300) | 9.5% | 6.7% | 5.0% | 8.3% | |
| Haitian International Holdings Ltd ($1882) | 4.2% | 6.8% | 6.3% | 6.3% | |
| |
|---|
| Median (20 companies) | 4.2% | 4.3% | 4.6% | 2.9% | 4.9% |
|---|
| Sun East Technology Holdings Ltd ($365) | 1.5% | 1.7% | 0.4% | 1.1% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Haitian International Holdings Ltd ($1882) | 19.8% | 21.2% | 19.4% | 16.3% | |
| Huazhang Technology Holding Ltd ($1673) | 29.6% | 16.2% | 16.3% | 16.2% | |
| Jingwei Textile Machinery ($350) | 19.4% | 20.9% | 17.4% | 14.9% | |
| Good Friend International Holdings Inc ($2398) | 6.5% | 8.7% | 12.1% | 5.9% | |
| Shanghai Prime Machinery Co Ltd ($2345) | 2.5% | 2.8% | 2.5% | 5.8% | |
| |
|---|
| Median (20 companies) | 7.5% | 4.2% | 2.8% | 1.3% | -1.7% |
|---|
| Sun East Technology Holdings Ltd ($365) | 4.0% | 0.8% | 1.3% | 1.4% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 3.0x | 11.4x | 5.6x | 129.4x | |
| Honghua Group Ltd ($196) | 1.2x | 3.2x | 5.2x | 14.2x | |
| First Tractor Co Ltd ($38) | 0.5x | 2.5x | 9.2x | 6.3x | |
| LK Technology Holdings Ltd ($558) | 2.5x | 5.1x | 4.9x | 4.6x | 5.7x |
| Cosmos Machinery Enterprises Ltd ($118) | 2.2x | 1.7x | 2.1x | 3.9x | |
| |
|---|
| Median (15 companies) | -0.6x | 0.2x | 0.2x | 3.1x | 5.7x |
|---|
| Sun East Technology Holdings Ltd ($365) | -2.0x | -6.9x | -1.8x | 3.1x | 4.7x |
