Guoco Group Ltd reports 33.2% Net Income decline while 3.2 pp EBITDA Margin growth from 30.5% to 33.7%
30/08/2016 • About Guoco Group Ltd (
$53) • By InTwits
Guoco Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 33.7% in FY2016, 30.5% in FY2015, 30.2% in FY2014, 38.1% in FY2013, -2.9% in FY2012
- Guoco Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 2,187 in FY2016, 2,207 in FY2015, 1,421 in FY2014, 776 in FY2013, 1,213 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guoco Group Ltd ($53) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10,514 | 21,932 | 24,926 | 23,783 | 19,823 | -16.7% |
| EBITDA | -306 | 8,360 | 7,535 | 7,252 | 6,686 | -7.8% |
| Net Income | -1,297 | 6,296 | 5,756 | 4,626 | 3,088 | -33.2% |
Balance Sheet
|
|---|
| Cash | 8,802 | 16,078 | 14,006 | 20,477 | 18,977 | -7.3% |
| Short Term Debt | 14,972 | 13,890 | 18,916 | 12,078 | 14,654 | 21.3% |
| Long Term Debt | 28,888 | 36,173 | 29,644 | 32,033 | 19,850 | -38.0% |
Cash flow
|
|---|
| Capex | 1,213 | 776 | 1,421 | 2,207 | 2,187 | -0.9% |
Ratios
|
|---|
| Revenue growth | 16.1% | 108.6% | 13.6% | -4.6% | -16.7% | |
| EBITDA growth | -109.4% | -2,833.9% | -9.9% | -3.8% | -7.8% | |
| EBITDA Margin | -2.9% | 38.1% | 30.2% | 30.5% | 33.7% | 3.2% |
| Net Income Margin | -12.3% | 28.7% | 23.1% | 19.4% | 15.6% | -3.9% |
| CAPEX, % of revenue | 11.5% | 3.5% | 5.7% | 9.3% | 11.0% | 1.8% |
| ROIC | -1.5% | 6.2% | 4.8% | 4.7% | 4.7% | -0.0% |
| ROE | -2.8% | 13.3% | 10.8% | 8.1% | 5.4% | -2.7% |
| Net Debt/EBITDA | | 4.1x | 4.6x | 3.3x | 2.3x | -0.9x |
Revenue and profitability
Guoco Group Ltd's Revenue dropped on 16.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.2 pp from 30.5% to 33.7% in FY2016.
Net Income marign decreased on 3.9 pp from 19.4% to 15.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 11.0%. CAPEX/Revenue increased on 7.5 pp from 3.5% in FY2013 to 11.0% in FY2016. It's average CAPEX/Revenue for the last three years was 8.7%.
Return on investment
The company operates at low ROIC (4.67%) and ROE (5.39%). ROIC showed almost no change in FY2016. ROE decreased on 2.7 pp from 8.1% to 5.4% in FY2016.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 5.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 3.3x to 2.3x in FY2016. Debt dropped on 21.8% while cash decreased on 7.3%.
Appendix 1: Peers in Diversified Finan Serv
Below you can find Guoco Group Ltd benchmarking vs. other companies in Diversified Finan Serv 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 |
|---|
| 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) | 6.1% | 14.9% | 27.6% | 25.3% | 19.8% |
|---|
| Guoco Group Ltd ($53) | | 108.6% | 13.6% | -4.6% | -16.7% |
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 (12 companies) | 64.2% | 75.1% | 88.2% | 90.3% | 69.9% |
|---|
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% | 36.2% | 47.9% | 32.4% | 53.8% |
|---|
| Guoco Group Ltd ($53) | -2.9% | 38.1% | 30.2% | 30.5% | 33.7% |
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% | 1.8% | 1.1% | 1.5% | 1.3% |
|---|
| Guoco Group Ltd ($53) | 11.5% | 3.5% | 5.7% | 9.3% | 11.0% |
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% | 4.0% | 4.9% | 3.5% | 3.4% |
|---|
| Guoco Group Ltd ($53) | -1.5% | 6.2% | 4.8% | 4.7% | 4.7% |
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 (49 companies) | -0.6x | 0.1x | -0.1x | -0.1x | 0.5x |
|---|
| Guoco Group Ltd ($53) | | 4.1x | 4.6x | 3.3x | 2.3x |
