China Smarter Energy Group Holdings Ltd reports 165,261% CAPEX growth in 2016 and 25.3% Revenue growth
30/06/2016 • About China Smarter Energy Group Holdings Ltd (
$1004) • By InTwits
China Smarter Energy Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Smarter Energy Group 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 -29.1% for the sames years0
- China Smarter Energy Group Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.4%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 189 in FY2016, 0.11 in FY2015, 0.0090 in FY2014, 0.75 in FY2013, 1.2 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.1%
- It operates with high leverage: Net Debt/EBITDA is 6.1x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Smarter Energy Group Holdings Ltd ($1004) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 105.0 | 80.7 | 10.2 | 200.7 | 251.6 | 25.3% |
| Gross Profit | 6.5 | 3.2 | 4.8 | 194.6 | 247.5 | 27.2% |
| SG&A | 30.3 | 30.7 | 27.5 | 62.4 | 187.9 | 201.0% |
| EBITDA | -296.9 | -301.2 | -156.1 | 425.9 | 140.0 | -67.1% |
| Net Income | -184.5 | -214.5 | -118.1 | -28.8 | -275.5 | |
Balance Sheet
|
|---|
| Cash | 32.9 | 22.7 | 20.5 | 138.0 | 294.7 | 113.5% |
| Short Term Debt | 0.1 | 14.9 | 37.8 | 12.5 | 20.6 | 64.5% |
| Long Term Debt | 37.7 | 63.8 | 0.0 | 1,400.1 | 1,128.6 | -19.4% |
Cash flow
|
|---|
| Capex | 1.2 | 0.7 | 0.0 | 0.1 | 188.5 | 165,260.5% |
Ratios
|
|---|
| Revenue growth | -4.0% | -23.1% | -87.3% | 1,860.5% | 25.3% | |
| EBITDA growth | 120.9% | 1.5% | -48.2% | -372.8% | -67.1% | |
| Gross Margin | 6.2% | 4.0% | 46.9% | 96.9% | 98.4% | 1.4% |
| EBITDA Margin | -282.7% | -373.2% | -1,524.9% | 212.2% | 55.6% | -156.5% |
| Net Income Margin | -175.6% | -265.7% | -1,153.3% | -14.3% | -109.5% | -95.2% |
| SG&A, % of revenue | 28.9% | 38.0% | 268.9% | 31.1% | 74.7% | 43.6% |
| CAPEX, % of revenue | 1.1% | 0.9% | 0.1% | 0.1% | 74.9% | 74.9% |
| ROIC | -19.4% | -23.0% | -14.0% | 22.5% | 2.1% | -20.4% |
| ROE | -19.9% | -27.8% | -18.1% | -3.7% | -22.7% | -19.0% |
| Net Debt/EBITDA | | | | 3.0x | 6.1x | 3.1x |
Revenue and profitability
China Smarter Energy Group Holdings Ltd's Revenue jumped on 25.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.6 pp from -9.6% to -15.3% in FY2016.
Gross Margin increased slightly on 1.4 pp from 96.9% to 98.4% in FY2016. SG&A as a % of Revenue jumped on 43.6 pp from 31.1% to 74.7% in FY2016.
Net Income marign dropped on 95.2 pp from -14.3% to -110% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 74.9% in FY2016. China Smarter Energy Group Holdings Ltd's CAPEX/Revenue surged on 74.0 pp from 0.93% in FY2013 to 74.9% in FY2016. Average CAPEX/Revenue for the last three years was 25.0%.To fuel this fast growth the company made large investments to CAPEX (135% of EBITDA).
Return on investment
The company operates at low but positive ROIC (2.11%) and negative ROE (-22.73%). ROIC dropped on 20.4 pp from 22.5% to 2.1% in FY2016. ROE dropped on 19.0 pp from -3.7% to -22.7% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.1x and Debt / EBITDA is 8.2x. Net Debt / EBITDA jumped on 3.1x from 3.0x to 6.1x in FY2016. Debt dropped on 18.7% while cash surged on 114%.
Appendix 1: Peers in Diversified Finan Serv
Below you can find China Smarter Energy Group Holdings Ltd benchmarking vs. other companies in Diversified Finan Serv 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 |
|---|
| Crown International Corp Ltd ($727) | | -75.0% | 117.4% | 802.5% | -25.1% |
| Global Strategic Group Ltd ($8007) | -3.9% | 2.1% | 806.3% | 681.2% | |
| Upbest Group Ltd ($335) | | -61.8% | 24.1% | 208.1% | -63.4% |
| GF Securities Co Ltd ($1776) | 16.3% | 31.8% | 75.0% | 163.9% | |
| AID Partners Capital Holdings Ltd ($8088) | 0.9% | -79.5% | 655.2% | 162.0% | |
| |
|---|
| Median (64 companies) | 8.3% | 19.3% | 27.6% | 24.0% | 18.4% |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | | -23.1% | -87.3% | 1,860.5% | 25.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Roma Group Ltd ($8072) | | | 99.4% | 98.7% | |
| First China Financial Network Holdings Ltd ($8123) | 93.4% | | 94.5% | 97.4% | |
| Chinese Strategic Holdings Ltd ($8089) | 99.1% | 97.9% | 97.0% | 96.6% | |
| Allied Group Ltd ($373) | 95.1% | 94.4% | 93.6% | 92.2% | |
| Styland Holdings Ltd ($211) | 57.7% | 75.1% | 88.2% | 91.7% | 91.4% |
| |
|---|
| Median (11 companies) | 70.7% | 84.4% | 89.9% | 89.0% | 69.9% |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | 6.2% | 4.0% | 46.9% | 96.9% | 98.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Aircraft Leasing Group Holdings Ltd ($1848) | 91.3% | 86.4% | 92.9% | 107.0% | |
| Get Nice Holdings Ltd ($64) | 2.6% | 153.4% | 92.7% | 83.9% | 84.5% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 81.6% | 73.4% | 75.7% | 82.1% | |
| Hong Kong Finance Group Co Ltd ($1273) | 76.9% | 67.5% | 65.2% | 74.8% | 70.3% |
| Haitong International Securities Group Ltd ($665) | 34.9% | 45.7% | 59.9% | 71.4% | |
| |
|---|
| Median (66 companies) | 23.0% | 37.2% | 47.9% | 31.4% | 56.4% |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -282.7% | -373.2% | -1,524.9% | 212.2% | 55.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Aircraft Leasing Group Holdings Ltd ($1848) | 351.0% | 0.1% | 33.3% | 64.6% | |
| Willie International Holdings Ltd ($273) | | 0.3% | 0.8% | 58.0% | |
| China Assurance Finance Group Ltd ($8090) | 94.7% | 68.9% | 53.3% | 51.0% | |
| AID Partners Capital Holdings Ltd ($8088) | 4.1% | 2.9% | 28.4% | 26.6% | |
| Hongkong Chinese Ltd ($655) | | | 0.1% | 25.6% | 0.1% |
| |
|---|
| Median (65 companies) | 2.1% | 1.9% | 1.1% | 1.5% | 0.9% |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | 1.1% | 0.9% | 0.1% | 0.1% | 74.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong Exchanges and Clearing Ltd ($388) | 29.1% | 20.1% | 21.5% | 29.1% | |
| Oi Wah Pawnshop Credit Holdings Ltd ($1319) | 32.7% | 20.7% | 14.0% | 15.3% | 12.5% |
| Emperor Capital Group Ltd ($717) | 5.1% | 12.8% | 13.1% | 14.6% | |
| Roma Group Ltd ($8072) | 19.6% | 43.7% | 107.8% | 13.3% | 9.8% |
| Orient Securities International Holdings Ltd ($8001) | 10.6% | 13.3% | 12.1% | 12.4% | |
| |
|---|
| Median (69 companies) | 4.4% | 4.2% | 4.9% | 3.5% | 4.6% |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -19.4% | -23.0% | -14.0% | 22.5% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hoifu Energy Group Ltd ($7) | | | | 62.5x | |
| South China Financial Holdings Ltd ($619) | | | | 56.9x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 2.1x | 10.3x | 9.3x | 39.3x | 4.3x |
| Far East Horizon Ltd ($3360) | 16.9x | 21.7x | 20.0x | 20.8x | |
| Quam Ltd ($952) | 58.9x | 15.9x | 4.1x | 14.8x | -18.0x |
| |
|---|
| Median (49 companies) | -0.6x | 0.1x | -0.0x | -0.1x | 0.4x |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | | | | 3.0x | 6.1x |
