NWS Holdings Ltd revenue jumped on 20.4% in 2016 while EBITDA Margin decreased slightly on 1.3 pp from 18.4% to 17.1%
20/09/2016 • About NWS Holdings Ltd (
$659) • By InTwits
NWS Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 17.1% in FY2016 vs. 18.4% in FY2015 vs. 34.1% in FY2012
- NWS Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 5.5%.
- CAPEX is quite volatile: 549 in FY2016, 237 in FY2015, 223 in FY2014, 140 in FY2013, 183 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
NWS Holdings Ltd ($659) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,954 | 16,248 | 21,443 | 24,492 | 29,498 | 20.4% |
| Gross Profit | 3,078 | 3,134 | 3,080 | 3,151 | 3,353 | 6.4% |
| SG&A | 655 | 747 | 881 | 1,014 | 1,104 | 8.8% |
| EBITDA | 5,100 | 3,881 | 4,042 | 4,508 | 5,047 | 12.0% |
| Net Income | 5,251 | 4,008 | 4,325 | 4,478 | 4,913 | 9.7% |
Balance Sheet
|
|---|
| Cash | 5,199 | 7,748 | 7,619 | 10,406 | 8,880 | -14.7% |
| Short Term Debt | 2,556 | 1,404 | 5,514 | 3,324 | 5,813 | 74.9% |
| Long Term Debt | 15,110 | 16,276 | 12,154 | 13,487 | 9,252 | -31.4% |
Cash flow
|
|---|
| Capex | 183 | 140 | 223 | 237 | 549 | 131.3% |
Ratios
|
|---|
| Revenue growth | 56.4% | 8.7% | 32.0% | 14.2% | 20.4% | |
| EBITDA growth | 101.5% | -23.9% | 4.2% | 11.5% | 12.0% | |
| Gross Margin | 20.6% | 19.3% | 14.4% | 12.9% | 11.4% | -1.5% |
| EBITDA Margin | 34.1% | 23.9% | 18.9% | 18.4% | 17.1% | -1.3% |
| Net Income Margin | 35.1% | 24.7% | 20.2% | 18.3% | 16.7% | -1.6% |
| SG&A, % of revenue | 4.4% | 4.6% | 4.1% | 4.1% | 3.7% | -0.4% |
| CAPEX, % of revenue | 1.2% | 0.9% | 1.0% | 1.0% | 1.9% | 0.9% |
| ROIC | 9.1% | 5.1% | 5.0% | 5.4% | 6.2% | 0.8% |
| ROE | 15.7% | 10.6% | 10.5% | 10.2% | 10.8% | 0.6% |
| Net Debt/EBITDA | 2.4x | 2.6x | 2.5x | 1.4x | 1.2x | -0.2x |
Revenue and profitability
The company's Revenue surged on 20.4%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.0 pp from 17.5% to 20.5% in FY2016.
Gross Margin decreased slightly on 1.5 pp from 12.9% to 11.4% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 1.6 pp from 18.3% to 16.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 NWS Holdings Ltd had CAPEX/Revenue of 1.9%. CAPEX/Revenue increased slightly on 1.00 pp from 0.86% in FY2013 to 1.9% in FY2016. Average CAPEX/Revenue for the last three years was 1.3%.
Return on investment
The company operates at low ROIC (6.23%) and ROE (10.79%). ROIC increased slightly on 0.80 pp from 5.4% to 6.2% in FY2016. ROE increased slightly on 0.57 pp from 10.2% to 10.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 3.0x. Net Debt / EBITDA dropped on 0.2x from 1.4x to 1.2x in FY2016. Debt dropped on 10.4% while cash dropped on 14.7%.
Management team
NWS Holdings Ltd's CEO is Tsang Yam Pui. Tsang Yam Pui has 3 years tenure at the company.
Appendix 1: Peers in Holding Companies-Divers
Below we provide NWS Holdings Ltd benchmarking against other companies in Holding Companies-Divers 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 |
|---|
| Beijing Development HK Ltd ($154) | 12.5% | | | 1,048.9% | |
| CIAM Group Ltd ($378) | -62.2% | 47.9% | -40.0% | 211.5% | |
| Melco International Development Ltd ($200) | 16.5% | 21.7% | 3.0% | 134.9% | |
| New Century Group Hong Kong Ltd ($234) | | 326.7% | -70.3% | 118.2% | -78.2% |
| Greater China Holdings Ltd ($431) | -35.8% | -72.1% | 67.3% | 110.3% | |
| |
|---|
| Median (44 companies) | 7.8% | 4.9% | 12.6% | 3.3% | -5.1% |
|---|
| NWS Holdings Ltd ($659) | | 8.7% | 32.0% | 14.2% | 20.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Century Group Hong Kong Ltd ($234) | 27.3% | 85.2% | 82.8% | 91.5% | 43.4% |
| Melco International Development Ltd ($200) | 63.1% | 52.9% | 54.5% | 79.4% | |
| CIAM Group Ltd ($378) | | | | 75.8% | |
| Emperor International Holdings Ltd ($163) | 71.3% | 64.9% | 79.2% | 75.3% | 55.3% |
| Heng Fai Enterprises Ltd ($185) | 89.0% | 89.5% | 58.3% | 74.7% | |
| |
|---|
| Median (38 companies) | 33.4% | 36.0% | 34.4% | 37.6% | 42.9% |
|---|
| NWS Holdings Ltd ($659) | 20.6% | 19.3% | 14.4% | 12.9% | 11.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Century Group Hong Kong Ltd ($234) | -5.5% | 78.8% | 58.3% | 85.0% | 33.8% |
| Emperor International Holdings Ltd ($163) | 180.7% | 131.8% | 100.6% | 73.9% | -20.1% |
| Pioneer Global Group Ltd ($224) | -0.5% | -9.9% | -11.6% | 64.3% | 66.8% |
| C C Land Holdings Ltd ($1224) | 27.0% | 23.6% | 24.6% | 55.7% | |
| China Merchants Holdings International Co Ltd ($144) | 56.4% | 50.8% | 45.2% | 55.7% | |
| |
|---|
| Median (44 companies) | 2.8% | 2.8% | 7.4% | 6.5% | 9.1% |
|---|
| NWS Holdings Ltd ($659) | 34.1% | 23.9% | 18.9% | 18.4% | 17.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Heng Fai Enterprises Ltd ($185) | 4.8% | 77.1% | 310.0% | 458.1% | |
| Chinney Investments Ltd ($216) | 17.5% | 103.4% | 111.3% | 230.9% | 26.6% |
| China Investments Holdings Ltd ($132) | 4.8% | 81.9% | 382.2% | 222.5% | |
| Goldin Properties Holdings Ltd ($283) | 2,178.4% | 1,190.0% | 50.1% | 202.4% | 128.8% |
| Carnival Group International Holdings Ltd ($996) | | 137.9% | 61.0% | 133.3% | |
| |
|---|
| Median (44 companies) | 2.7% | 3.8% | 6.1% | 7.6% | 8.5% |
|---|
| NWS Holdings Ltd ($659) | 1.2% | 0.9% | 1.0% | 1.0% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fulum Group Holdings Ltd ($1443) | | 116.3% | 55.5% | 29.8% | 12.9% |
| C C Land Holdings Ltd ($1224) | 7.4% | 5.3% | 7.9% | 15.0% | |
| Chinney Alliance Group Ltd ($385) | 6.4% | 8.1% | 13.6% | 15.0% | |
| Niraku GC Holdings Inc ($1245) | | 19.0% | 18.8% | 13.1% | 2.7% |
| Top Spring International Holdings Ltd ($3688) | 15.6% | 6.9% | 7.3% | 8.0% | |
| |
|---|
| Median (44 companies) | -0.2% | 0.2% | 0.8% | 0.3% | 1.8% |
|---|
| NWS Holdings Ltd ($659) | 9.1% | 5.1% | 5.0% | 5.4% | 6.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chinney Investments Ltd ($216) | 10.3x | 63.7x | 48.6x | 93.7x | 13.5x |
| Carnival Group International Holdings Ltd ($996) | | | 23.7x | 92.3x | |
| Multifield International Holdings Ltd ($898) | 3.2x | 7.3x | 3.0x | 55.9x | |
| CIAM Group Ltd ($378) | | | | 32.6x | |
| Chuang's Consortium International Ltd ($367) | 0.7x | 5.0x | | 23.9x | 8.7x |
| |
|---|
| Median (25 companies) | 2.4x | 2.9x | 2.9x | 2.8x | 4.4x |
|---|
| NWS Holdings Ltd ($659) | 2.4x | 2.6x | 2.5x | 1.4x | 1.2x |
