WLS Holdings Ltd/Hong Kong revenue surged on 13.8% and EBITDA Margin increased slightly on 1.3 pp from -0.69% to 0.63%
22/07/2016 • About WLS Holdings Ltd/Hong Kong (
$8021) • By InTwits
WLS Holdings Ltd/Hong Kong reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- WLS Holdings Ltd/Hong Kong doesn't have a profitable business model yet: FY2016 ROIC is -1.4%
- WLS Holdings Ltd/Hong Kong motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -12.2% for the sames years0
- WLS Holdings Ltd/Hong Kong has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's in pair with industry average of 6.5%.
- CAPEX is quite volatile: 2.3 in FY2016, 15.7 in FY2015, 8.8 in FY2014, 8.3 in FY2013, 6.9 in FY2012
- The company has unprofitable business model: ROIC is at -1.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
WLS Holdings Ltd/Hong Kong ($8021) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 115.1 | 125.9 | 112.0 | 136.6 | 155.5 | 13.8% |
| Gross Profit | 20.8 | 19.2 | 9.7 | 17.8 | 23.8 | 34.1% |
| SG&A | | | | 28.1 | 35.0 | 24.5% |
| EBITDA | -9.1 | -8.9 | -60.5 | -0.9 | 1.0 | |
| Net Income | 7.1 | -14.2 | -61.3 | -9.7 | -18.2 | |
Balance Sheet
|
|---|
| Cash | 7.2 | 7.2 | 7.4 | 129.0 | 230.0 | 78.3% |
| Short Term Debt | 41.6 | 55.2 | 63.2 | 48.2 | 63.0 | 30.7% |
| Long Term Debt | 0.6 | 1.0 | 0.4 | 0.0 | 0.7 | 8,062.5% |
Cash flow
|
|---|
| Capex | 6.9 | 8.3 | 8.8 | 15.7 | 2.3 | -85.2% |
Ratios
|
|---|
| Revenue growth | 8.9% | 9.4% | -11.1% | 22.0% | 13.8% | |
| EBITDA growth | -64.0% | -1.5% | 577.5% | -98.4% | -203.7% | |
| Gross Margin | 18.0% | 15.3% | 8.7% | 13.0% | 15.3% | 2.3% |
| EBITDA Margin | -7.9% | -7.1% | -54.0% | -0.7% | 0.6% | 1.3% |
| Net Income Margin | 6.2% | -11.3% | -54.7% | -7.1% | -11.7% | -4.6% |
| SG&A, % of revenue | | | | 20.6% | 22.5% | 1.9% |
| CAPEX, % of revenue | 6.0% | 6.6% | 7.9% | 11.5% | 1.5% | -10.0% |
| ROIC | -6.8% | -6.4% | -36.2% | -2.8% | -1.4% | 1.3% |
| ROE | 5.4% | -10.1% | -52.4% | -5.1% | -3.4% | 1.7% |
| Net Debt/EBITDA | | | | | -170.8x | -170.8x |
Revenue and profitability
The company's Revenue surged on 13.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.88 pp from 48.1% to 49.0% in FY2016.
Gross Margin increased on 2.3 pp from 13.0% to 15.3% in FY2016. SG&A as a % of Revenue increased slightly on 1.9 pp from 20.6% to 22.5% in FY2016.
Net Income marign decreased on 4.6 pp from -7.1% to -11.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2016. The company showed decline in CAPEX/Revenue of 5.1 pp from 6.6% in FY2013 to 1.5% in FY2016. Average CAPEX/Revenue for the last three years was 7.0%.To fuel this fast growth the company made large investments to CAPEX (238% of EBITDA).
Return on investment
The company operates at negative ROIC (-1.44%) and ROE (-3.36%). ROIC increased slightly on 1.3 pp from -2.8% to -1.4% in FY2016. ROE increased slightly on 1.7 pp from -5.1% to -3.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -170.8x and Debt / EBITDA is 65.3x. Net Debt / EBITDA dropped170.8x from to -170.8x in FY2016. Debt jumped on 32.0% while cash jumped on 78.3%.
Appendix 1: Peers in Building Materials
Below you can find WLS Holdings Ltd/Hong Kong benchmarking vs. other companies in Building Materials 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 |
|---|
| Pacific Plywood Hldg Ltd ($767) | -34.9% | -14.5% | 119.5% | 57.3% | |
| Far East Global Group Ltd ($830) | 52.9% | 9.5% | 18.6% | 30.5% | |
| China Wood Optimization Holding Ltd ($8099) | 68.7% | 77.9% | 6.5% | 18.9% | |
| Steed Oriental Holdings Co Ltd ($8277) | | -4.2% | 11.0% | 9.4% | -21.5% |
| Dongpeng Holdings Co Ltd ($3386) | 26.2% | 34.8% | 15.6% | 5.6% | |
| |
|---|
| Median (25 companies) | -1.3% | 9.7% | 9.9% | -14.4% | -21.5% |
|---|
| WLS Holdings Ltd/Hong Kong ($8021) | | 9.4% | -11.1% | 22.0% | 13.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 91.4% | 82.0% | 97.2% | 98.6% | |
| Sustainable Forest Holdings Ltd ($723) | -2.4% | 12.1% | 19.7% | 55.2% | 83.9% |
| Dongpeng Holdings Co Ltd ($3386) | 35.6% | 37.1% | 38.5% | 39.1% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 37.2% | 36.9% | 37.0% | 36.4% | |
| Anhui Conch Cement Co Ltd ($914) | 27.3% | 32.5% | 33.2% | 26.9% | |
| |
|---|
| Median (25 companies) | 20.6% | 22.1% | 20.9% | 15.4% | 12.4% |
|---|
| WLS Holdings Ltd/Hong Kong ($8021) | 18.0% | 15.3% | 8.7% | 13.0% | 15.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 12.6% | -19.8% | 50.5% | 34.7% | |
| China Tianrui Group Cement Co Ltd ($1252) | 28.5% | 23.7% | 26.7% | 32.8% | |
| Anhui Conch Cement Co Ltd ($914) | 27.1% | 31.1% | 32.1% | 29.7% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 30.4% | 29.9% | 23.8% | 26.2% | |
| Dongpeng Holdings Co Ltd ($3386) | 14.3% | 21.5% | 22.6% | 24.4% | |
| |
|---|
| Median (25 companies) | 15.8% | 16.6% | 18.2% | 14.0% | -5.2% |
|---|
| WLS Holdings Ltd/Hong Kong ($8021) | -7.9% | -7.1% | -54.0% | -0.7% | 0.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Wood Optimization Holding Ltd ($8099) | 10.9% | 9.6% | 1.8% | 19.3% | |
| China Shanshui Cement Group Ltd ($691) | 18.9% | 21.1% | 12.1% | 14.3% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 0.6% | 0.5% | 4.1% | 14.2% | |
| China Glass Holdings Ltd ($3300) | 19.6% | 12.5% | 12.4% | 13.5% | |
| China Resources Cement Holdings Ltd ($1313) | 14.5% | 11.4% | 10.8% | 11.1% | |
| |
|---|
| Median (25 companies) | 9.8% | 9.1% | 5.5% | 6.4% | 1.1% |
|---|
| WLS Holdings Ltd/Hong Kong ($8021) | 6.0% | 6.6% | 7.9% | 11.5% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dongpeng Holdings Co Ltd ($3386) | 37.1% | 35.8% | 27.2% | 26.6% | |
| China Wood Optimization Holding Ltd ($8099) | 33.5% | 27.3% | 17.7% | 17.7% | |
| China Lesso Group Holdings Ltd ($2128) | 20.5% | 19.4% | 18.2% | 17.2% | |
| Anhui Conch Cement Co Ltd ($914) | 12.7% | 17.5% | 18.4% | 11.7% | |
| Hong Wei Asia Holdings Co Ltd ($8191) | 17.0% | 5.2% | 9.3% | 8.6% | |
| |
|---|
| Median (25 companies) | 6.6% | 6.9% | 5.7% | 1.3% | -3.4% |
|---|
| WLS Holdings Ltd/Hong Kong ($8021) | -6.8% | -6.4% | -36.2% | -2.8% | -1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Tianrui Group Cement Co Ltd ($1252) | 4.2x | 5.1x | 5.2x | 7.9x | |
| BBMG Corp ($2009) | 4.6x | 5.0x | 6.1x | 6.6x | |
| Asia Cement China Holdings Corp ($743) | 3.2x | 2.7x | 2.8x | 5.1x | |
| West China Cement Ltd ($2233) | 3.3x | 2.9x | 3.6x | 4.2x | |
| China Singyes Solar Technologies Holdings Ltd ($750) | 0.9x | 0.8x | 1.8x | 4.0x | |
| |
|---|
| Median (16 companies) | 2.3x | 1.1x | 1.9x | 3.5x | |
|---|
