NEW Concepts Holdings Ltd is an attractive stock for a growth investor
05/07/2016 • About NEW Concepts Holdings Ltd (
$2221) • By InTwits
Pay attention to NEW Concepts Holdings Ltd as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
NEW Concepts Holdings Ltd showed growth in the last financial year. NEW Concepts Holdings Ltd's revenue surged on 80.8% in FY2016. Together with revenue growth NEW Concepts Holdings Ltd also managed to keep EBITDA growth. EBITDA grew 17.2% for the same period.
In the longer period NEW Concepts Holdings Ltd showed fast revenue growth of 83.0% from FY2013 to FY2016 annualy. EBITDA surged on 49.0% from FY2013 to FY2016 annualy.
NEW Concepts Holdings Ltd ($2221) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 191 | 230 | 463 | 781 | 1,412 |
|---|
| Revenue growth, % | | 20.7% | 100.9% | 68.6% | 80.8% |
|---|
| Gross margin, % | 10.4% | 16.0% | 18.4% | 14.5% | 9.31% |
|---|
| SG&A, % | | | | 1.89% | 2.30% |
|---|
| EBITDA | 16 | 29 | 58 | 82 | 96 |
|---|
| EBITDA growth, % | | 86.5% | 98.4% | 42.4% | 17.2% |
|---|
| EBITDA margin, % | 8.16% | 12.6% | 12.4% | 10.5% | 6.81% |
|---|
| Net Income | 14 | 23 | 51 | 53 | 50 |
|---|
| Net Income margin, % | 7.11% | 9.99% | 10.9% | 6.83% | 3.52% |
|---|
| |
| CAPEX | 3 | 3 | 14 | 160 | 5 |
|---|
| CAPEX/Revenue, % | 1.72% | 1.23% | 3.07% | 20.5% | 0.338% |
|---|
| Debt | 0 | 8 | 15 | 119 | 74 |
|---|
| Cash | 46 | 25 | 35 | 57 | 195 |
|---|
| Net Debt/EBITDA | -3.0x | -0.6x | -0.3x | 0.7x | -1.3x |
|---|
| |
| ROIC, % | | 51.0% | 78.8% | 39.0% | 23.3% |
|---|
| ROE, % | | 51.2% | 100.6% | 52.0% | 27.1% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 10.5% in FY2015 to 6.80% in FY2016. In the last 3 years the company showed big decline in EBITDA margin of 5.80 pp from 12.6% in FY2013 to 6.80% in FY2016.
We call NEW Concepts Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 23.3%. Three years ago it was considerably higher at 51.0%. It's average ROIC for the last three years was 47.0%.
NEW Concepts Holdings Ltd's Net Income margin dropped on 3.30 pp from 6.80% to 3.50% in FY2016. If we look for the longer period Net Income margin dropped on 6.50 pp from 10% in FY2013 to 3.50% in FY2016.
NEW Concepts Holdings Ltd operates at ROE of 27.1%. It's average ROE for the last three years was 59.9%.
Capital expenditures (CAPEX)
NEW Concepts Holdings Ltd's CAPEX/Revenue was 0.338% in FY2016. NEW Concepts Holdings Ltd showed big decline in CAPEX/Revenue of 0.896 pp from 1.23% in FY2013 to 0.338% in FY2016. It's average CAPEX/Revenue for the last three years was 7.96%.
Leverage (Debt)
The company has negative net debt at -1.3x Net Debt/EBITDA - at the same time with high growth. In the last 3 years the company showed fast leverage growth of 0.67x from -0.59x in FY2013 to -1.26x in FY2016.
Valuation vs. comparable companies
At the end of trading day today NEW Concepts Holdings Ltd traded at 9.3x EV/EBITDA which is 69.9% lower than 31.0x Engineering&Construction peer group avearge calculated on the basis of 55 companies. At the end of trading day today NEW Concepts Holdings Ltd traded at 20.5x P/E which is 187% higher than 7.2x Engineering&Construction peer group avearge calculated on the basis of 10 companies.
Peers in Engineering&Construction
Below we provide NEW Concepts Holdings Ltd benchmarking against other companies in Engineering&Construction 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | | -76.8% | -55.8% | 592.3% | 86.7% |
| Vision Fame International Holding Ltd ($1315) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Sino Credit Holdings Ltd ($628) | -13.8% | | | 97.4% | |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (48 companies) | 7.6% | 22.8% | 16.8% | 9.9% | 10.5% |
|---|
| NEW Concepts Holdings Ltd ($2221) | | 20.7% | 100.9% | 68.6% | 80.8% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | |
| Sam Woo Construction Group Ltd ($3822) | 33.2% | 27.3% | 33.6% | 36.0% | 19.8% |
| China National Culture Group Ltd ($745) | 0.9% | 12.1% | 10.3% | 32.3% | 19.2% |
| |
|---|
| Median (43 companies) | 13.5% | 15.1% | 14.5% | 15.1% | 14.4% |
|---|
| NEW Concepts Holdings Ltd ($2221) | 10.4% | 16.0% | 18.4% | 14.5% | 9.3% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | -14.6% |
| |
|---|
| Median (48 companies) | 9.8% | 9.5% | 8.6% | 7.8% | 1.9% |
|---|
| NEW Concepts Holdings Ltd ($2221) | 8.2% | 12.6% | 12.4% | 10.5% | 6.8% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | 47.3% |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | 19.7% |
| |
|---|
| Median (48 companies) | 2.3% | 2.5% | 1.7% | 2.0% | 3.1% |
|---|
| NEW Concepts Holdings Ltd ($2221) | 1.7% | 1.2% | 3.1% | 20.5% | 0.3% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| In Construction Holdings Ltd ($1500) | | 52.8% | 37.0% | 49.4% | 40.4% |
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | |
| Sam Woo Construction Group Ltd ($3822) | | 28.2% | 28.7% | 33.5% | 18.3% |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | |
| Broad Greenstate International Co Ltd ($1253) | 33.2% | 85.1% | 51.2% | 26.0% | |
| |
|---|
| Median (50 companies) | 6.5% | 6.1% | 5.5% | 5.6% | 2.8% |
|---|
| NEW Concepts Holdings Ltd ($2221) | | 51.0% | 78.8% | 39.0% | 23.3% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | 2.7x |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (42 companies) | 1.0x | 0.9x | 1.5x | 2.2x | 0.4x |
|---|
| NEW Concepts Holdings Ltd ($2221) | -3.0x | -0.6x | -0.3x | 0.7x | -1.3x |
