Daiwa Associate Holdings reports 278% EBITDA decline in 2016 and 14.6% Revenue decline
30/06/2016 • About Daiwa Associate Holdings (
$1037) • By InTwits
Daiwa Associate Holdings reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Daiwa Associate Holdings is a company in decline: FY2016 revenue growth was -14.6%, 5 years revenue CAGR was -42.6%
- Daiwa Associate Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 6.7%.
- CAPEX is quite volatile: 3.7 in FY2016, 5.0 in FY2015, 4.2 in FY2014, 3.3 in FY2013, 21.2 in FY2012
- The company has unprofitable business model: ROIC is at -21.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Daiwa Associate Holdings ($1037) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 643.0 | 547.9 | 618.3 | 130.3 | 111.3 | -14.6% |
| Gross Profit | 70.5 | 68.7 | 87.8 | 23.9 | -28.0 | -217.3% |
| SG&A | 59.3 | 54.3 | 80.9 | 19.8 | 43.9 | 122.1% |
| EBITDA | 15.5 | 20.7 | 17.6 | 33.4 | -59.6 | -278.4% |
| Net Income | 8.8 | -171.0 | 8.2 | -39.7 | -97.6 | |
Balance Sheet
|
|---|
| Cash | 105.4 | 60.2 | 55.5 | 71.7 | 216.2 | 201.6% |
| Short Term Debt | 259.2 | 113.9 | 105.5 | 74.8 | 17.2 | -77.0% |
| Long Term Debt | 7.5 | 0.3 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 21.2 | 3.3 | 4.2 | 5.0 | 3.7 | -27.1% |
Ratios
|
|---|
| Revenue growth | -63.9% | -14.8% | 12.8% | -78.9% | -14.6% | |
| EBITDA growth | -45.3% | 33.8% | -15.0% | 89.9% | -278.4% | |
| Gross Margin | 11.0% | 12.5% | 14.2% | 18.3% | -25.1% | -43.5% |
| EBITDA Margin | 2.4% | 3.8% | 2.8% | 25.6% | -53.6% | -79.2% |
| Net Income Margin | 1.4% | -31.2% | 1.3% | -30.5% | -87.7% | -57.2% |
| SG&A, % of revenue | 9.2% | 9.9% | 13.1% | 15.2% | 39.4% | 24.3% |
| CAPEX, % of revenue | 3.3% | 0.6% | 0.7% | 3.8% | 3.3% | -0.6% |
| ROIC | 0.2% | 1.0% | 2.7% | 1.2% | -21.7% | -22.9% |
| ROE | 2.3% | -57.9% | 3.6% | -18.7% | -43.8% | -25.1% |
| Net Debt/EBITDA | 10.4x | 2.6x | 2.8x | 0.1x | | -0.1x |
Revenue and profitability
The company's Revenue dropped on 14.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 48.1% to 49.0% in FY2016.
Gross Margin dropped on 43.5 pp from 18.3% to -25.1% in FY2016. SG&A as a % of Revenue surged on 24.3 pp from 15.2% to 39.4% in FY2016.
Net Income marign dropped on 57.2 pp from -30.5% to -87.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.3%. CAPEX/Revenue increased on 2.7 pp from 0.59% in FY2013 to 3.3% in FY2016. It's average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at negative ROIC (-21.66%) and ROE (-43.79%). ROIC dropped on 22.9 pp from 1.2% to -21.7% in FY2016. ROE dropped on 25.1 pp from -18.7% to -43.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.5x and Debt / EBITDA is . Net Debt / EBITDA decreased on 0.1x from 0.1x to in FY2016. Debt dropped on 77.0% while cash surged on 202%.
Appendix 1: Peers in Electronics
Below we provide Daiwa Associate Holdings benchmarking against other companies in Electronics 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 |
|---|
| GCL New Energy Holdings Ltd ($451) | 14.7% | -6.8% | 10.9% | 53.9% | |
| Tech Pro Technology Development Ltd ($3823) | 7.4% | -44.9% | -13.7% | 52.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 36.1% | 8.0% | 15.4% | 34.8% | |
| AAC Technologies Holdings Inc ($2018) | 54.8% | 28.9% | 9.7% | 32.2% | |
| Ningbo Wanhao Holdings Co Ltd ($8249) | 5.7% | 412.4% | -6.9% | 28.9% | |
| |
|---|
| Median (49 companies) | 1.6% | 4.1% | 5.0% | 0.9% | 0.5% |
|---|
| Daiwa Associate Holdings ($1037) | | -14.8% | 12.8% | -78.9% | -14.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 54.0% | 58.1% | 49.5% | 49.6% | |
| AAC Technologies Holdings Inc ($2018) | 44.2% | 42.7% | 41.4% | 41.5% | |
| TeleEye Holdings Ltd ($8051) | 44.0% | 42.1% | 38.5% | 37.0% | |
| Hi Sun Technology China Ltd ($818) | 28.1% | 37.4% | 33.3% | 34.7% | |
| Datronix Holdings Ltd ($889) | 32.9% | 32.0% | 34.1% | 34.6% | |
| |
|---|
| Median (47 companies) | 14.1% | 13.8% | 13.9% | 14.1% | 14.1% |
|---|
| Daiwa Associate Holdings ($1037) | 11.0% | 12.5% | 14.2% | 18.3% | -25.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.8% | 35.8% | 34.9% | 34.8% | |
| GCL New Energy Holdings Ltd ($451) | 10.8% | 11.1% | 12.6% | 33.0% | |
| Wasion Group Holdings Ltd ($3393) | 18.8% | 21.2% | 22.0% | 19.3% | |
| Tongda Group Holdings Ltd ($698) | 17.1% | 16.8% | 18.4% | 18.9% | |
| Technovator International Ltd ($1206) | 19.0% | 19.0% | 20.8% | 18.0% | |
| |
|---|
| Median (49 companies) | 7.4% | 7.6% | 5.4% | 4.8% | 3.8% |
|---|
| Daiwa Associate Holdings ($1037) | 2.4% | 3.8% | 2.8% | 25.6% | -53.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| GCL New Energy Holdings Ltd ($451) | 5.5% | 5.1% | 5.4% | 401.2% | |
| National Electronic Hldgs ($213) | 3.4% | 18.1% | 7.1% | 49.7% | 4.7% |
| Irico Group Electronics Co Ltd ($438) | 39.9% | 30.4% | 17.4% | 25.8% | |
| Kingwell Group Ltd ($1195) | 8.6% | 5.4% | 5.3% | 21.4% | |
| AAC Technologies Holdings Inc ($2018) | 18.7% | 8.7% | 19.6% | 18.4% | |
| |
|---|
| Median (49 companies) | 3.9% | 3.2% | 4.2% | 2.9% | 1.9% |
|---|
| Daiwa Associate Holdings ($1037) | 3.3% | 0.6% | 0.7% | 3.8% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AAC Technologies Holdings Inc ($2018) | 29.1% | 30.0% | 26.0% | 27.8% | |
| Cowell e Holdings Inc ($1415) | 12.5% | 27.1% | 24.4% | 25.8% | |
| Changhong Jiahua Holdings Ltd ($8016) | 29.6% | 17.7% | 15.1% | 16.7% | |
| Tongda Group Holdings Ltd ($698) | 15.2% | 13.5% | 16.5% | 16.3% | |
| Alltronics Holdings Ltd ($833) | 13.1% | 15.2% | 19.8% | 15.6% | |
| |
|---|
| Median (49 companies) | 4.6% | 4.1% | 3.7% | 2.6% | 2.3% |
|---|
| Daiwa Associate Holdings ($1037) | 0.2% | 1.0% | 2.7% | 1.2% | -21.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| National Electronic Hldgs ($213) | 16.3x | 30.2x | 84.8x | 19.9x | 42.7x |
| GCL New Energy Holdings Ltd ($451) | 2.9x | 2.6x | 1.7x | 17.4x | |
| Man Yue Technology Holdings Ltd ($894) | 2.1x | 2.7x | 3.3x | 6.5x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.2x | 2.6x | 5.7x | 5.4x | 14.1x |
| SAS Dragon Hldg Ltd ($1184) | 7.1x | 2.0x | 6.4x | 4.8x | |
| |
|---|
| Median (32 companies) | 1.0x | 1.1x | 0.8x | 0.4x | 1.2x |
|---|
| Daiwa Associate Holdings ($1037) | 10.4x | 2.6x | 2.8x | 0.1x | |
