Netel Technology Holdings Ltd reports 210% CAPEX growth in 2016 and 11.3% Revenue growth
22/08/2016 • About Netel Technology Holdings Ltd (
$8256) • By InTwits
Netel Technology Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Netel Technology Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -313.2%
- The company operates at negative EBITDA Margin: -929.1%
- Netel Technology 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 -816.4% for the sames years0
- Netel Technology Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.2%. At the same time it's a lot of higher than industry average of 28.0%.
- CAPEX is quite volatile: 0.59 in FY2016, 0.19 in FY2015, 0.33 in FY2014, 0.27 in FY2013, 0.0020 in FY2012
- The company has unprofitable business model: ROIC is at -313.2%
- It operates with high leverage: Net Debt/EBITDA is 7.0x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Netel Technology Holdings Ltd ($8256) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1.920 | 1.761 | 1.972 | 2.127 | 2.367 | 11.3% |
| Gross Profit | 0.536 | 0.742 | 1.082 | 1.538 | 1.730 | 12.5% |
| SG&A | 17.702 | 15.820 | 17.803 | 24.343 | 25.005 | 2.7% |
| EBITDA | -13.971 | -12.521 | -15.152 | -19.204 | -21.992 | |
| Net Income | -3.907 | -14.008 | -16.521 | -20.547 | -23.247 | |
Balance Sheet
|
|---|
| Cash | 11.239 | 2.624 | 1.520 | 2.544 | 1.436 | -43.6% |
| Short Term Debt | 0.118 | 0.163 | 0.116 | 1.739 | 0.098 | -94.4% |
| Long Term Debt | 0.137 | 0.111 | 0.058 | 0.340 | 0.242 | -28.8% |
Cash flow
|
|---|
| Capex | 0.002 | 0.272 | 0.327 | 0.191 | 0.592 | 209.9% |
Ratios
|
|---|
| Revenue growth | -41.0% | -8.3% | 12.0% | 7.9% | 11.3% | |
| EBITDA growth | -5.2% | -10.4% | 21.0% | 26.7% | 14.5% | |
| Gross Margin | 27.9% | 42.1% | 54.9% | 72.3% | 73.1% | 0.8% |
| EBITDA Margin | -727.7% | -711.0% | -768.4% | -902.9% | -929.1% | -26.2% |
| Net Income Margin | -203.5% | -795.5% | -837.8% | -966.0% | -982.1% | -16.1% |
| SG&A, % of revenue | 922.0% | 898.4% | 902.8% | 1,144.5% | 1,056.4% | -88.1% |
| CAPEX, % of revenue | 0.1% | 15.4% | 16.6% | 9.0% | 25.0% | 16.0% |
| ROIC | -277.2% | -449.4% | -689.6% | -333.1% | -313.2% | 19.9% |
| ROE | -299.6% | -1,471.4% | -5,756.4% | -1,837.8% | -1,005.1% | 832.8% |
Revenue and profitability
The company's Revenue jumped on 11.3%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 26.2 pp from -903% to -929% in FY2016.
Gross Margin increased slightly on 0.78 pp from 72.3% to 73.1% in FY2016. SG&A as a % of Revenue dropped on 88.1 pp from 1,144% to 1,056% in FY2016.
Net Income marign dropped on 16.1 pp from -966% to -982% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Netel Technology Holdings Ltd had CAPEX/Revenue of 25.0%. CAPEX/Revenue increased on 9.6 pp from 15.4% in FY2013 to 25.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 16.9%.
Return on investment
The company operates at negative ROIC (-313.20%) and ROE (-1,005.06%). ROIC jumped on 19.9 pp from -333% to -313% in FY2016. ROE jumped on 833 pp from -1,838% to -1,005% in FY2016.
Leverage (Debt)
Debt level is 7.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 83.6% while cash dropped on 43.6%.
Appendix 1: Peers in Telecommunications
Below we provide Netel Technology Holdings Ltd benchmarking against other companies in Telecommunications 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 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 107.4% | -82.2% | 8,010.0% | |
| Hanny Holdings Ltd ($275) | | 131.2% | -85.2% | 349.3% | -78.5% |
| CCT Fortis Holdings Ltd ($138) | -24.1% | -55.3% | -71.3% | 207.1% | |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | -8.5% | -45.9% | -56.2% | 111.6% | |
| China Trends Holdings Ltd ($8171) | 167.0% | -70.2% | -16.7% | 106.0% | |
| |
|---|
| Median (52 companies) | 9.1% | 9.8% | 9.6% | 6.7% | -3.1% |
|---|
| Netel Technology Holdings Ltd ($8256) | | -8.3% | 12.0% | 7.9% | 11.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HKBN Ltd ($1310) | | 84.3% | 86.5% | 86.9% | |
| Great World Co Holdings Ltd ($8003) | -11.0% | 43.0% | 45.5% | 67.9% | 42.0% |
| APT Satellite Holdings Ltd ($1045) | 58.7% | 64.1% | 62.5% | 61.0% | |
| Cisco Systems Inc ($4333) | 61.2% | 60.6% | 58.9% | 60.4% | 62.9% |
| CCT Fortis Holdings Ltd ($138) | 5.2% | 44.8% | -15.7% | 58.4% | |
| |
|---|
| Median (49 companies) | 23.6% | 24.3% | 25.0% | 22.7% | 30.6% |
|---|
| Netel Technology Holdings Ltd ($8256) | 27.9% | 42.1% | 54.9% | 72.3% | 73.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 86.5% | 85.8% | 81.6% | 82.4% | |
| APT Satellite Holdings Ltd ($1045) | 81.0% | 78.9% | 77.5% | 78.8% | |
| Synertone Communication Corp ($1613) | 44.9% | 48.5% | 49.4% | 51.5% | -77.6% |
| HKBN Ltd ($1310) | | 39.2% | 40.1% | 39.0% | |
| HKT Trust & HKT Ltd ($6823) | 36.3% | 35.0% | 35.9% | 34.9% | |
| |
|---|
| Median (52 companies) | 8.3% | 5.5% | 6.4% | 9.2% | 0.4% |
|---|
| Netel Technology Holdings Ltd ($8256) | -727.7% | -711.0% | -768.4% | -902.9% | -929.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| APT Satellite Holdings Ltd ($1045) | 74.3% | 2.5% | 27.2% | 115.8% | |
| Hong Kong Television Network Ltd ($1137) | 12,435.9% | 504.9% | 1,283.5% | 79.4% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 93.8% | 71.7% | 75.0% | 52.8% | |
| China Fiber Optic Network System Group Ltd ($3777) | 4.8% | 16.3% | 13.1% | 31.9% | |
| Directel Holdings Ltd ($8337) | 2.1% | 0.1% | 0.6% | 30.2% | |
| |
|---|
| Median (52 companies) | 2.3% | 2.9% | 2.9% | 2.6% | 3.1% |
|---|
| Netel Technology Holdings Ltd ($8256) | 0.1% | 15.4% | 16.6% | 9.0% | 25.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telecom Service One Holdings Ltd ($8145) | 95.0% | 5.4% | 26.7% | 39.8% | 37.4% |
| VTech Holdings Ltd ($303) | 37.6% | 39.5% | 40.0% | 39.8% | 37.9% |
| Coolpad Group Ltd ($2369) | 8.1% | 6.0% | 9.6% | 29.1% | |
| Telecom Digital Holdings Ltd ($8336) | | 13.3% | 20.2% | 18.9% | 16.7% |
| SmarTone Telecommunications Holdings Ltd ($315) | 37.2% | 23.1% | 12.8% | 17.7% | |
| |
|---|
| Median (53 companies) | 7.7% | 6.0% | 6.6% | 6.3% | -0.4% |
|---|
| Netel Technology Holdings Ltd ($8256) | -277.2% | -449.4% | -689.6% | -333.1% | -313.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CCT Land Holdings Ltd ($261) | 10.1x | 23.8x | 48.4x | 44.8x | |
| China Energine International Holdings Ltd ($1185) | | | 13.3x | 31.7x | |
| China Ground Source Energy Industry Group Ltd ($8128) | -1.6x | 3.5x | 14.3x | 11.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.0x | -1.3x | 12.5x | 7.6x | |
| China All Access Holdings Ltd ($633) | 0.9x | 1.8x | 5.2x | 5.6x | |
| |
|---|
| Median (39 companies) | -0.3x | 0.6x | 0.7x | 0.6x | 1.4x |
|---|
