Wealth Glory Holdings Ltd reports 73.4% revenue decline in FY2016 and 40.4 pp EBITDA Margin decline from -20.8% to -61.2%
29/06/2016 • About Wealth Glory Holdings Ltd (
$8269) • By InTwits
Wealth Glory Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wealth Glory Holdings Ltd is a company in decline: FY2016 revenue growth was -73.4%, 5 years revenue CAGR was -10.1%
- The company operates at negative EBITDA Margin: -61.2%
- Wealth Glory Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -19.4%0
- Wealth Glory Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 0.046 in FY2016, 0.015 in FY2015, 2.9 in FY2014, 2.3 in FY2013, 7.5 in FY2012
- The company has unprofitable business model: ROIC is at -24.0%
- It operates with high leverage: Net Debt/EBITDA is 11.6x while industry average is -0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wealth Glory Holdings Ltd ($8269) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 104.4 | 48.3 | 316.6 | 277.3 | 73.7 | -73.4% |
| Gross Profit | 25.6 | 7.9 | 4.7 | 6.6 | 11.3 | 71.9% |
| SG&A | | 14.3 | 35.5 | 34.7 | 37.6 | 8.3% |
| EBITDA | 8.4 | -12.8 | -52.3 | -57.6 | -45.1 | |
| Net Income | 7.7 | -13.9 | -159.4 | -202.6 | -49.9 | |
Balance Sheet
|
|---|
| Cash | 86.7 | 31.5 | 18.9 | 9.4 | 24.0 | 155.6% |
| Short Term Debt | 0.0 | 0.0 | 18.8 | 16.8 | 33.1 | 96.7% |
| Long Term Debt | 0.0 | 0.0 | 103.4 | 27.6 | 7.0 | -74.5% |
Cash flow
|
|---|
| Capex | 7.5 | 2.3 | 2.9 | 0.0 | 0.0 | 206.7% |
Ratios
|
|---|
| Revenue growth | -16.5% | -53.8% | 555.7% | -12.4% | -73.4% | |
| EBITDA growth | -67.7% | -252.0% | 308.7% | 10.0% | -21.7% | |
| Gross Margin | 24.5% | 16.5% | 1.5% | 2.4% | 15.4% | 13.0% |
| EBITDA Margin | 8.1% | -26.5% | -16.5% | -20.8% | -61.2% | -40.4% |
| Net Income Margin | 7.4% | -28.7% | -50.3% | -73.1% | -67.7% | 5.3% |
| SG&A, % of revenue | | 29.6% | 11.2% | 12.5% | 51.0% | 38.5% |
| CAPEX, % of revenue | 7.2% | 4.8% | 0.9% | 0.0% | 0.1% | 0.1% |
| ROIC | 9.4% | -11.2% | -37.2% | -43.3% | -24.0% | 19.3% |
| ROE | 9.3% | -11.0% | -147.3% | -238.6% | -30.9% | 207.8% |
| Net Debt/EBITDA | -10.3x | | | | | 0.0x |
Revenue and profitability
Wealth Glory Holdings Ltd's Revenue dropped on 73.4%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 40.4 pp from -20.8% to -61.2% in FY2016.
Gross Margin surged on 13.0 pp from 2.4% to 15.4% in FY2016. SG&A as a % of Revenue jumped on 38.5 pp from 12.5% to 51.0% in FY2016.
Net Income marign increased on 5.3 pp from -73.1% to -67.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Wealth Glory Holdings Ltd had CAPEX/Revenue of 0.062%. The company's CAPEX/Revenue decreased on 4.8 pp from 4.8% in FY2013 to 0.062% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.33%.
Return on investment
The company operates at negative ROIC (-23.95%) and ROE (-30.85%). ROIC surged on 19.3 pp from -43.3% to -24.0% in FY2016. ROE jumped on 208 pp from -239% to -30.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 11.6x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt decreased on 9.7% while cash jumped on 156%.
Appendix 1: Peers in Food
Below we provide Wealth Glory 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% | 5.1% | -2.9% | -16.6% |
|---|
| Wealth Glory Holdings Ltd ($8269) | | -53.8% | 555.7% | -12.4% | -73.4% |
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) | 16.5% | 20.3% | 22.2% | 23.7% | 20.8% |
|---|
| Wealth Glory Holdings Ltd ($8269) | 24.5% | 16.5% | 1.5% | 2.4% | 15.4% |
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) | 8.0% | 7.1% | 7.9% | 8.5% | 4.6% |
|---|
| Wealth Glory Holdings Ltd ($8269) | 8.1% | -26.5% | -16.5% | -20.8% | -61.2% |
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) | 5.1% | 5.6% | 5.1% | 4.9% | 0.4% |
|---|
| Wealth Glory Holdings Ltd ($8269) | 7.2% | 4.8% | 0.9% | 0.0% | 0.1% |
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) | 7.8% | 7.3% | 7.4% | 5.6% | 2.7% |
|---|
| Wealth Glory Holdings Ltd ($8269) | 9.4% | -11.2% | -37.2% | -43.3% | -24.0% |
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 |
|---|
