Inno-Tech Holdings Ltd reports 105% Net Income decline in 2016 and 6.4 pp EBITDA Margin decline from -31.6% to -37.9%
31/08/2016 • About Inno-Tech Holdings Ltd (
$8202) • By InTwits
Inno-Tech Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -37.9%
- Inno-Tech Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- It operates with high leverage: Net Debt/EBITDA is 1.0x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Inno-Tech Holdings Ltd ($8202) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 42.889 | 55.847 | 51.375 | 39.218 | 42.208 | 7.6% |
| Gross Profit | -6.918 | -34.755 | -24.776 | -31.222 | 1.045 | |
| SG&A | 39.801 | 22.676 | 30.146 | 31.405 | 18.103 | -42.4% |
| EBITDA | -33.961 | 86.541 | -15.350 | -12.377 | -16.012 | |
| Net Income | -47.160 | -1,563.180 | -371.458 | 716.253 | -34.309 | -104.8% |
Balance Sheet
|
|---|
| Cash | 4.419 | 25.133 | 1.704 | 7.506 | 5.438 | -27.6% |
| Short Term Debt | 4.400 | 20.400 | 215.609 | 88.693 | 94.500 | 6.5% |
| Long Term Debt | 0.000 | 1,099.657 | 693.458 | 0.000 | 10.000 | |
Cash flow
|
|---|
| Capex | 0.409 | 0.113 | 0.884 | 0.109 | 0.046 | -57.8% |
Ratios
|
|---|
| Revenue growth | 42.3% | 30.2% | -8.0% | -23.7% | 7.6% | |
| EBITDA growth | 12.8% | -354.8% | -117.7% | -19.4% | 29.4% | |
| Gross Margin | -16.1% | -62.2% | -48.2% | -79.6% | 2.5% | 82.1% |
| EBITDA Margin | -79.2% | 155.0% | -29.9% | -31.6% | -37.9% | -6.4% |
| Net Income Margin | -110.0% | -2,799.0% | -723.0% | 1,826.3% | -81.3% | -1,907.6% |
| SG&A, % of revenue | 92.8% | 40.6% | 58.7% | 80.1% | 42.9% | -37.2% |
| CAPEX, % of revenue | 1.0% | 0.2% | 1.7% | 0.3% | 0.1% | -0.2% |
| ROIC | -21.3% | -21.0% | -35.7% | | | 0.0% |
| ROE | -20.8% | | | | | 0.0% |
| Net Debt/EBITDA | | 12.7x | | | | 0.0x |
Revenue and profitability
The company's Revenue increased on 7.6%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.4 pp from -31.6% to -37.9% in FY2016.
Gross Margin surged on 82.1 pp from -79.6% to 2.5% in FY2016. SG&A as a % of Revenue dropped on 37.2 pp from 80.1% to 42.9% in FY2016.
Net Income marign dropped on 1,908 pp from 1,826% to -81.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.11% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.70%.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt jumped on 17.8% while cash dropped on 27.6%.
Appendix 1: Peers in Software
Below we provide Inno-Tech Holdings Ltd benchmarking against other companies in Software 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 |
|---|
| Yunbo Digital Synergy Group Ltd ($8050) | | 241.6% | -31.9% | 348.0% | 99.6% |
| Pizu Group Holdings Ltd ($8053) | | -42.9% | 1,742.9% | 157.9% | 235.2% |
| China Eco-Farming Ltd ($8166) | -23.6% | -7.7% | 21.8% | 155.5% | |
| ICO Group Ltd ($8140) | | -11.1% | -3.1% | 104.9% | 29.8% |
| Aurum Pacific China Group Ltd ($8148) | | | 50.0% | 92.7% | |
| |
|---|
| Median (37 companies) | 18.6% | 11.1% | 21.5% | 10.7% | -2.6% |
|---|
| Inno-Tech Holdings Ltd ($8202) | | 30.2% | -8.0% | -23.7% | 7.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Bio Cassava Holdings Ltd ($8129) | 90.4% | 97.4% | 98.4% | 98.3% | |
| Chanjet Information Technology Co Ltd ($1588) | 89.2% | 91.3% | 92.4% | 91.4% | |
| China Binary Sale Technology Ltd ($8255) | 63.5% | 68.5% | 67.7% | 85.9% | |
| Kingdee International Software Group Co Ltd ($268) | 65.0% | 75.3% | 82.5% | 81.5% | |
| Tian Ge Interactive Holdings Ltd ($1980) | 88.5% | 87.6% | 84.8% | 77.7% | |
| |
|---|
| Median (36 companies) | 45.4% | 42.5% | 42.8% | 43.5% | 38.6% |
|---|
| Inno-Tech Holdings Ltd ($8202) | -16.1% | -62.2% | -48.2% | -79.6% | 2.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| International Entertainment Corp ($1009) | 50.8% | 64.0% | 54.9% | 62.0% | 45.5% |
| Sinosoft Technology Group Ltd ($1297) | 62.6% | 54.9% | 57.2% | 59.0% | |
| China Binary Sale Technology Ltd ($8255) | 35.1% | 35.4% | 44.4% | 50.5% | |
| Boyaa Interactive International Ltd ($434) | 38.5% | 25.8% | 30.7% | 47.6% | |
| TravelSky Technology Ltd ($696) | 38.1% | 35.8% | 31.9% | 41.1% | |
| |
|---|
| Median (37 companies) | 11.1% | 10.9% | 11.1% | 9.8% | 2.8% |
|---|
| Inno-Tech Holdings Ltd ($8202) | -79.2% | 155.0% | -29.9% | -31.6% | -37.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NetDragon Websoft Inc ($777) | 21.1% | 34.6% | 54.6% | 42.9% | |
| China Information Technology Development Ltd ($8178) | 4.1% | 1.1% | 0.5% | 40.7% | |
| Aurum Pacific China Group Ltd ($8148) | | 2.9% | 7.5% | 20.6% | |
| TravelSky Technology Ltd ($696) | 8.9% | 21.7% | 18.1% | 18.1% | |
| Kingsoft Corp Ltd ($3888) | 4.3% | 3.8% | 14.3% | 11.1% | |
| |
|---|
| Median (37 companies) | 1.4% | 1.8% | 3.5% | 2.2% | 1.2% |
|---|
| Inno-Tech Holdings Ltd ($8202) | 1.0% | 0.2% | 1.7% | 0.3% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pizu Group Holdings Ltd ($8053) | -21.8% | -13.4% | -6.8% | 120.0% | 51.7% |
| ICO Group Ltd ($8140) | | 43.5% | 6.8% | 37.7% | 27.1% |
| IGG Inc ($8002) | | 55.9% | 41.4% | 25.9% | |
| Boyaa Interactive International Ltd ($434) | 75.3% | 21.3% | 20.0% | 21.4% | |
| Sinosoft Technology Group Ltd ($1297) | 34.0% | 21.9% | 20.2% | 20.8% | |
| |
|---|
| Median (37 companies) | 5.6% | 6.7% | 6.8% | 2.2% | 4.1% |
|---|
| Inno-Tech Holdings Ltd ($8202) | -21.3% | -21.0% | -35.7% | | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Epicurean and Co Ltd ($8213) | 2.3x | 4.7x | 12.3x | 12.0x | 13.9x |
| Sing Lee Software Group Ltd ($8076) | | | 6.2x | 4.4x | |
| Century Sage Scientific Holdings Ltd ($1450) | 0.2x | 0.0x | -0.2x | 1.8x | |
| Microsoft Corp ($4338) | | | 0.4x | 1.2x | 1.4x |
| Chinasoft International Ltd ($354) | -0.7x | 0.7x | 1.5x | 0.7x | |
| |
|---|
| Median (22 companies) | -1.0x | -1.7x | -1.6x | -1.1x | 0.4x |
|---|
