PPS International Holdings Ltd reports 32.9% revenue growth in FY2016 and 12.4 pp EBITDA Margin decline from -2.5% to -14.9%
27/09/2016 • About PPS International Holdings Ltd (
$8201) • By InTwits
PPS International Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- PPS International Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -40.7%
- The company operates at negative EBITDA Margin: -14.9%
- EBITDA Margin is quite volatile: -14.9% in FY2016, -2.5% in FY2015, 11.1% in FY2014, 10.4% in FY2013, 14.6% in FY2012
- The company has unprofitable business model: ROIC is at -40.7%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
PPS International Holdings Ltd ($8201) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 163.6 | 194.5 | 193.1 | 202.2 | 268.7 | 32.9% |
| Gross Profit | 32.1 | 29.8 | 27.0 | 23.7 | 27.6 | 16.2% |
| SG&A | 11.8 | 14.9 | 16.1 | 31.4 | 76.4 | 143.1% |
| EBITDA | 24.0 | 20.3 | 21.4 | -5.0 | -40.1 | |
| Net Income | 16.2 | 3.1 | 13.1 | -27.2 | -51.1 | |
Balance Sheet
|
|---|
| Cash | 22.6 | 29.6 | 37.4 | 45.4 | 48.7 | 7.3% |
| Short Term Debt | 10.9 | 4.6 | 4.0 | 1.0 | 4.6 | 343.9% |
| Long Term Debt | 3.8 | 2.4 | 0.8 | 9.3 | 9.8 | 5.8% |
Cash flow
|
|---|
| Capex | 1.2 | | 1.9 | 10.1 | 3.4 | -66.1% |
Ratios
|
|---|
| Revenue growth | -2.5% | 18.9% | -0.7% | 4.7% | 32.9% | |
| EBITDA growth | 2.1% | -15.2% | 5.1% | -123.4% | 700.9% | |
| Gross Margin | 19.6% | 15.3% | 14.0% | 11.7% | 10.3% | -1.5% |
| EBITDA Margin | 14.6% | 10.4% | 11.1% | -2.5% | -14.9% | -12.4% |
| Net Income Margin | 9.9% | 1.6% | 6.8% | -13.5% | -19.0% | -5.5% |
| SG&A, % of revenue | 7.2% | 7.6% | 8.3% | 15.6% | 28.4% | 12.9% |
| CAPEX, % of revenue | 0.7% | | 1.0% | 5.0% | 1.3% | -3.7% |
| ROIC | 101.6% | 35.6% | 23.8% | -13.7% | -40.7% | -27.0% |
| ROE | 634.7% | 10.9% | 22.2% | -38.5% | -52.3% | -13.7% |
| Net Debt/EBITDA | -0.3x | -1.1x | -1.5x | | | 0.0x |
Revenue and profitability
The company's Revenue surged on 32.9%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 12.4 pp from -2.5% to -14.9% in FY2016.
Gross Margin decreased slightly on 1.5 pp from 11.7% to 10.3% in FY2016. SG&A as a % of Revenue jumped on 12.9 pp from 15.6% to 28.4% in FY2016.
Net Income marign decreased on 5.5 pp from -13.5% to -19.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 1.3%. The company showed small growth in CAPEX/Revenue1.3 pp from in FY2013 to 1.3% in FY2016. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at negative ROIC (-40.75%) and ROE (-52.25%). ROIC dropped on 27.0 pp from -13.7% to -40.7% in FY2016. ROE dropped on 13.7 pp from -38.5% to -52.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt jumped on 39.8% while cash increased on 7.3%.
Appendix 1: Peers in Commercial Services
Below we provide PPS International Holdings Ltd benchmarking against other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 99.1% | 14.9% | -88.3% | 271.8% | |
| China Seven Star Holdings Ltd ($245) | 6.7% | -81.8% | -39.3% | 195.3% | |
| China Smartpay Group Holdings Ltd ($8325) | | 274.7% | 75.6% | 124.5% | 79.5% |
| Celebrate International Holdings Ltd ($8212) | | 1,437.6% | -6.3% | 117.0% | -78.1% |
| Haier Healthwise Holdings Ltd ($348) | | -50.1% | -7.5% | 101.1% | -9.4% |
| |
|---|
| Median (67 companies) | 6.7% | 8.6% | 9.9% | 4.0% | 8.7% |
|---|
| PPS International Holdings Ltd ($8201) | | 18.9% | -0.7% | 4.7% | 32.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HC International Inc ($2280) | 87.5% | 91.9% | 92.5% | 89.6% | |
| Winto Group Holdings Ltd ($8238) | 90.2% | 93.4% | 92.0% | 88.4% | |
| Dingyi Group Investment Ltd ($508) | 75.8% | | 64.5% | 86.0% | 89.6% |
| Fu Shou Yuan International Group Ltd ($1448) | 80.5% | 80.4% | 80.0% | 77.6% | |
| Nirvana Asia Ltd ($1438) | 68.3% | 69.6% | 70.5% | 75.7% | |
| |
|---|
| Median (61 companies) | 31.9% | 31.0% | 31.1% | 31.5% | 29.3% |
|---|
| PPS International Holdings Ltd ($8201) | 19.6% | 15.3% | 14.0% | 11.7% | 10.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | 61.6% | 84.9% | 75.9% | 80.9% | |
| Shenzhen International Holdings Ltd ($152) | 60.2% | 65.8% | 97.1% | 73.6% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 78.3% | 74.5% | 74.0% | 71.6% | |
| CAR Inc ($699) | 43.6% | 30.1% | 43.1% | 67.4% | |
| Jiangsu Expressway Co Ltd ($177) | 57.0% | 60.7% | 59.3% | 61.5% | |
| |
|---|
| Median (67 companies) | 17.6% | 16.0% | 12.9% | 10.1% | 1.5% |
|---|
| PPS International Holdings Ltd ($8201) | 14.6% | 10.4% | 11.1% | -2.5% | -14.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 21.3% | 9.0% | 13.9% | 47.4% | |
| COSCO Pacific Ltd ($1199) | 96.6% | 66.6% | 43.3% | 45.8% | |
| Shenzhen International Holdings Ltd ($152) | 23.0% | 22.1% | 20.9% | 35.0% | |
| Celebrate International Holdings Ltd ($8212) | 211.7% | 12.0% | 6.2% | 34.2% | 18.6% |
| China Maple Leaf Educational Systems Ltd ($1317) | 25.7% | 50.9% | 21.1% | 32.8% | |
| |
|---|
| Median (67 companies) | 3.0% | 3.6% | 2.6% | 2.8% | 1.7% |
|---|
| PPS International Holdings Ltd ($8201) | 0.7% | | 1.0% | 5.0% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bamboos Health Care Holdings Ltd ($8216) | | 71.1% | 50.1% | 58.3% | 40.0% |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 51.5% | 26.6% | 30.0% | 29.5% | 19.8% |
| 1010 Printing Group Ltd ($1127) | 13.5% | 20.8% | 17.8% | 19.9% | |
| China Packaging Holdings Development Ltd ($1439) | 52.0% | 46.6% | 34.1% | 19.8% | |
| iOne Holdings Ltd ($982) | 12.5% | 11.1% | 9.4% | 19.2% | |
| |
|---|
| Median (67 companies) | 6.3% | 6.4% | 5.8% | 3.6% | 1.8% |
|---|
| PPS International Holdings Ltd ($8201) | 101.6% | 35.6% | 23.8% | -13.7% | -40.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | 22.2x | |
| Kai Yuan Holdings Ltd ($1215) | -143.8x | -0.7x | | 18.8x | |
| Eagle Legend Asia Ltd ($936) | 4.0x | 4.0x | 3.3x | 6.2x | |
| Sichuan Expressway Co Ltd ($107) | 2.7x | 3.8x | 4.3x | 5.5x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 4.5x | 3.1x | 2.7x | 5.3x | |
| |
|---|
| Median (45 companies) | 0.0x | -0.7x | -0.6x | -0.6x | -2.4x |
|---|
