ABC Communications Holdings Ltd reports 160% revenue growth in FY2016 and 3.7 pp EBITDA Margin growth from -5.9% to -2.3%
03/07/2016 • About ABC Communications Holdings Ltd (
$30) • By InTwits
ABC Communications Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- ABC Communications Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -2.9%
- The company operates at negative EBITDA Margin: -2.3%
- ABC Communications 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 -10.8% for the sames years0
- ABC Communications Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.1%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 3.7 in FY2016, 1.8 in FY2015, 1.9 in FY2014, 0.11 in FY2013, 42.2 in FY2012
- The company has unprofitable business model: ROIC is at -2.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
ABC Communications Holdings Ltd ($30) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 115.0 | 68.7 | 60.0 | 56.4 | 146.5 | 159.7% |
| Gross Profit | 28.4 | 16.3 | 14.7 | 13.5 | 26.2 | 94.7% |
| SG&A | | 35.2 | 40.7 | 46.3 | 45.9 | -0.8% |
| EBITDA | -1.0 | -17.1 | -23.4 | -3.3 | -3.3 | |
| Net Income | 12.6 | -22.3 | -23.5 | -82.3 | -33.5 | |
Balance Sheet
|
|---|
| Cash | 31.3 | 31.4 | 40.9 | 97.9 | 62.7 | -35.9% |
| Short Term Debt | 37.1 | 0.0 | 0.0 | 7.1 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 27.7 | 65.2 | 71.3 | 9.4% |
Cash flow
|
|---|
| Capex | 42.2 | 0.1 | 1.9 | 1.8 | 3.7 | 109.3% |
Ratios
|
|---|
| Revenue growth | 11.2% | -40.2% | -12.8% | -5.9% | 159.7% | |
| EBITDA growth | -89.7% | 1,692.5% | 37.1% | -85.8% | -0.9% | |
| Gross Margin | 24.7% | 23.7% | 24.6% | 23.9% | 17.9% | -6.0% |
| EBITDA Margin | -0.8% | -24.8% | -39.0% | -5.9% | -2.3% | 3.7% |
| Net Income Margin | 10.9% | -32.4% | -39.1% | -145.9% | -22.9% | 123.0% |
| SG&A, % of revenue | | 51.3% | 67.9% | 82.0% | 31.3% | -50.7% |
| CAPEX, % of revenue | 36.6% | 0.2% | 3.2% | 3.1% | 2.5% | -0.6% |
| ROIC | -1.1% | -4.4% | -5.1% | -5.7% | -2.9% | 2.9% |
| ROE | 8.3% | -9.4% | -7.4% | -25.8% | -10.8% | 15.1% |
Revenue and profitability
The company's Revenue jumped on 160%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 166 pp from -36.9% to -202% in FY2016.
Gross Margin decreased on 6.0 pp from 23.9% to 17.9% in FY2016. SG&A as a % of Revenue dropped on 50.7 pp from 82.0% to 31.3% in FY2016.
Net Income marign jumped on 123 pp from -146% to -22.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.5% in FY2016. ABC Communications Holdings Ltd's CAPEX/Revenue increased on 2.3 pp from 0.16% in FY2013 to 2.5% in FY2016. For the last three years the average CAPEX/Revenue was 3.0%.
Return on investment
The company operates at negative ROIC (-2.85%) and ROE (-10.77%). ROIC increased on 2.9 pp from -5.7% to -2.9% in FY2016. ROE jumped on 15.1 pp from -25.8% to -10.8% in FY2016.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt decreased slightly on 1.3% while cash dropped on 35.9%.
Appendix 1: Peers in Diversified Finan Serv
Below we provide ABC Communications Holdings Ltd benchmarking against other companies in Diversified Finan Serv 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 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | | -23.1% | -87.3% | 1,860.5% | 25.3% |
| 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% | |
| |
|---|
| Median (64 companies) | 7.7% | 19.3% | 27.6% | 25.3% | 19.1% |
|---|
| ABC Communications Holdings Ltd ($30) | | -40.2% | -12.8% | -5.9% | 159.7% |
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% | |
| China Smarter Energy Group Holdings Ltd ($1004) | 6.2% | 4.0% | 46.9% | 96.9% | 98.4% |
| 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% | |
| |
|---|
| Median (11 companies) | 70.7% | 84.4% | 89.9% | 91.7% | 80.7% |
|---|
| ABC Communications Holdings Ltd ($30) | 24.7% | 23.7% | 24.6% | 23.9% | 17.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -282.7% | -373.2% | -1,524.9% | 212.2% | 55.6% |
| 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% |
| |
|---|
| Median (66 companies) | 23.0% | 37.2% | 47.9% | 32.4% | 55.6% |
|---|
| ABC Communications Holdings Ltd ($30) | -0.8% | -24.8% | -39.0% | -5.9% | -2.3% |
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) | 1.9% | 1.9% | 1.1% | 1.5% | 1.1% |
|---|
| ABC Communications Holdings Ltd ($30) | 36.6% | 0.2% | 3.2% | 3.1% | 2.5% |
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% | |
| China Smarter Energy Group Holdings Ltd ($1004) | -19.4% | -23.0% | -14.0% | 22.5% | 2.1% |
| 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% |
| |
|---|
| Median (69 companies) | 4.4% | 4.2% | 4.9% | 3.6% | 3.8% |
|---|
| ABC Communications Holdings Ltd ($30) | -1.1% | -4.4% | -5.1% | -5.7% | -2.9% |
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 (50 companies) | -0.6x | 0.1x | -0.0x | -0.0x | 0.5x |
|---|
