Quali-Smart Holdings Ltd EBITDA dropped on 43.6% and Revenue decreased on 7.1%
03/07/2016 • About Quali-Smart Holdings Ltd (
$1348) • By InTwits
Quali-Smart Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Quali-Smart Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -3.5%
- EBITDA Margin is quite volatile: 1.5% in FY2016, 2.4% in FY2015, 4.9% in FY2014, 5.6% in FY2013, 6.6% in FY2012
- Quali-Smart Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 6.7 in FY2016, 24.8 in FY2015, 98.2 in FY2014, 17.3 in FY2013, 13.2 in FY2012
- The company has unprofitable business model: ROIC is at -3.5%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Quali-Smart Holdings Ltd ($1348) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 876.7 | 794.1 | 773.2 | 829.0 | 770.4 | -7.1% |
| Gross Profit | 99.4 | 97.6 | 87.3 | 87.3 | 80.4 | -8.0% |
| SG&A | | 72.5 | 69.5 | 91.1 | 114.3 | 25.4% |
| EBITDA | 57.8 | 44.1 | 37.5 | 20.0 | 11.3 | -43.6% |
| Net Income | 47.7 | 22.7 | 20.2 | -3.7 | -77.6 | |
Balance Sheet
|
|---|
| Cash | 40.5 | 80.4 | 75.2 | 67.2 | 221.7 | 230.1% |
| Short Term Debt | 76.2 | 50.9 | 68.1 | 52.8 | 149.1 | 182.5% |
| Long Term Debt | 0.0 | 0.0 | 40.4 | 104.9 | 87.5 | -16.6% |
Cash flow
|
|---|
| Capex | 13.2 | 17.3 | 98.2 | 24.8 | 6.7 | -73.1% |
Ratios
|
|---|
| Revenue growth | 20.1% | -9.4% | -2.6% | 7.2% | -7.1% | |
| EBITDA growth | 54.7% | -23.7% | -14.9% | -46.7% | -43.6% | |
| Gross Margin | 11.3% | 12.3% | 11.3% | 10.5% | 10.4% | -0.1% |
| EBITDA Margin | 6.6% | 5.6% | 4.9% | 2.4% | 1.5% | -0.9% |
| Net Income Margin | 5.4% | 2.9% | 2.6% | -0.4% | -10.1% | -9.6% |
| SG&A, % of revenue | | 9.1% | 9.0% | 11.0% | 14.8% | 3.8% |
| CAPEX, % of revenue | 1.5% | 2.2% | 12.7% | 3.0% | 0.9% | -2.1% |
| ROIC | 31.3% | 16.2% | 9.1% | -0.3% | -3.5% | -3.1% |
| ROE | 53.0% | 15.0% | 9.8% | -1.5% | -19.9% | -18.4% |
| Net Debt/EBITDA | 0.6x | -0.7x | 0.9x | 4.5x | 1.3x | -3.2x |
Revenue and profitability
Quali-Smart Holdings Ltd's Revenue decreased on 7.1%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 0.95 pp from 2.4% to 1.5% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased on 3.8 pp from 11.0% to 14.8% in FY2016.
Net Income marign decreased on 9.6 pp from -0.45% to -10.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.86%. Quali-Smart Holdings Ltd's CAPEX/Revenue decreased slightly on 1.3 pp from 2.2% in FY2013 to 0.86% in FY2016. It's average level of CAPEX/Revenue for the last three years was 5.5%.The company invested a big chunk of EBITDA (59.1%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-3.49%) and ROE (-19.91%). ROIC decreased on 3.1 pp from -0.35% to -3.5% in FY2016. ROE dropped on 18.4 pp from -1.5% to -19.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 21.0x. Net Debt / EBITDA dropped on 3.2x from 4.5x to 1.3x in FY2016. Debt surged on 50.1% while cash jumped on 230%.
Appendix 1: Peers in Toys/Games/Hobbies
Below we provide Quali-Smart Holdings Ltd benchmarking against other companies in Toys/Games/Hobbies 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 |
|---|
| Leyou Technologies Holdings Ltd ($1089) | 18.8% | 32.3% | 17.7% | 31.0% | |
| Kin Yat Holdings Ltd ($638) | | 8.8% | 5.0% | 17.1% | 6.8% |
| Dream International Ltd ($1126) | 24.9% | -0.1% | 21.0% | 10.8% | |
| Matrix Holdings Ltd ($1005) | -0.2% | 17.5% | 12.2% | 10.1% | |
| Kader Holdings Co Ltd ($180) | -3.7% | -25.8% | -11.1% | 8.3% | |
| |
|---|
| Median (9 companies) | 11.6% | 17.5% | 17.7% | 8.3% | 6.8% |
|---|
| Quali-Smart Holdings Ltd ($1348) | | -9.4% | -2.6% | 7.2% | -7.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Playmates Holdings Ltd ($635) | 65.7% | 66.1% | 64.7% | 65.6% | |
| Playmates Toys Ltd ($869) | 60.3% | 62.8% | 61.9% | 61.6% | |
| Green International Holdings Ltd ($2700) | 17.8% | 1.8% | 8.1% | 59.2% | |
| Matrix Holdings Ltd ($1005) | 34.3% | 37.1% | 38.4% | 36.9% | |
| Kiu Hung International Holdings Ltd ($381) | 30.9% | 29.0% | 32.1% | 35.7% | |
| |
|---|
| Median (8 companies) | 28.2% | 29.1% | 27.3% | 36.3% | 12.4% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 11.3% | 12.3% | 11.3% | 10.5% | 10.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Playmates Holdings Ltd ($635) | 22.0% | 36.7% | 33.5% | 32.8% | |
| Playmates Toys Ltd ($869) | 15.1% | 33.0% | 30.2% | 25.8% | |
| Kader Holdings Co Ltd ($180) | -4.2% | -3.0% | 5.8% | 23.0% | |
| Matrix Holdings Ltd ($1005) | 10.2% | 13.2% | 15.0% | 17.4% | |
| Dream International Ltd ($1126) | 13.2% | 14.8% | 9.8% | 12.9% | |
| |
|---|
| Median (9 companies) | 9.8% | 8.4% | 8.8% | 12.9% | 6.3% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 6.6% | 5.6% | 4.9% | 2.4% | 1.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Green International Holdings Ltd ($2700) | 0.2% | 3.2% | 6.5% | 29.2% | |
| Playmates Holdings Ltd ($635) | 11.5% | 4.5% | 2.0% | 15.4% | |
| Dream International Ltd ($1126) | 2.9% | 3.8% | 11.2% | 7.3% | |
| Kin Yat Holdings Ltd ($638) | 9.8% | 4.6% | 7.5% | 4.8% | 2.1% |
| Leyou Technologies Holdings Ltd ($1089) | 15.8% | 3.8% | 2.6% | 4.5% | |
| |
|---|
| Median (9 companies) | 4.7% | 3.7% | 2.8% | 4.5% | 2.1% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 1.5% | 2.2% | 12.7% | 3.0% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Playmates Toys Ltd ($869) | 30.7% | 121.1% | 73.0% | 36.6% | |
| Matrix Holdings Ltd ($1005) | 5.9% | 13.1% | 18.6% | 21.2% | |
| Dream International Ltd ($1126) | 19.3% | 19.4% | 13.3% | 19.4% | |
| Kader Holdings Co Ltd ($180) | -5.7% | -3.9% | 0.6% | 7.9% | |
| Playmates Holdings Ltd ($635) | 2.4% | 12.6% | 12.0% | 7.9% | |
| |
|---|
| Median (9 companies) | 2.4% | 4.5% | 4.9% | 7.9% | 3.4% |
|---|
| Quali-Smart Holdings Ltd ($1348) | 31.3% | 16.2% | 9.1% | -0.3% | -3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kader Holdings Co Ltd ($180) | | | 9.6x | 1.5x | |
| Leyou Technologies Holdings Ltd ($1089) | 1.1x | 4.4x | 3.8x | 1.2x | |
| Kin Yat Holdings Ltd ($638) | 1.6x | 0.3x | 0.4x | -0.0x | -0.1x |
| Matrix Holdings Ltd ($1005) | 0.6x | 0.0x | -0.2x | -0.6x | |
| Dream International Ltd ($1126) | -1.5x | -1.5x | -1.3x | -1.1x | |
| |
|---|
| Median (7 companies) | 0.6x | -0.2x | -0.2x | -0.6x | -0.1x |
|---|
| Quali-Smart Holdings Ltd ($1348) | 0.6x | -0.7x | 0.9x | 4.5x | 1.3x |
