Time Watch Investments Ltd reports 21.1% EBITDA decline in 2016 and 1.7% Revenue decline
27/09/2016 • About Time Watch Investments Ltd (
$2033) • By InTwits
Time Watch Investments Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Time Watch Investments Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 38.3%.
- CAPEX is quite volatile: 94.4 in FY2016, 161 in FY2015, 100 in FY2014, 52.2 in FY2013, 32.8 in FY2012
- The company has highly profitable business model: ROIC is at 18.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Time Watch Investments Ltd ($2033) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,525 | 1,912 | 2,402 | 2,653 | 2,607 | -1.7% |
| Gross Profit | 918 | 1,159 | 1,561 | 1,807 | 1,784 | -1.3% |
| SG&A | | 850 | 1,154 | 1,333 | 1,450 | 8.8% |
| EBITDA | 269 | 321 | 467 | 543 | 428 | -21.1% |
| Net Income | 184 | 214 | 310 | 337 | 296 | -12.0% |
Balance Sheet
|
|---|
| Cash | 157 | 537 | 660 | 676 | 498 | -26.3% |
| Short Term Debt | 292 | 49 | 39 | 43 | 61 | 42.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 50 | |
Cash flow
|
|---|
| Capex | 33 | 52 | 100 | 161 | 94 | -41.3% |
Ratios
|
|---|
| Revenue growth | 28.2% | 25.4% | 25.6% | 10.4% | -1.7% | |
| EBITDA growth | 34.2% | 19.4% | 45.4% | 16.3% | -21.1% | |
| Gross Margin | 60.2% | 60.6% | 65.0% | 68.1% | 68.5% | 0.3% |
| EBITDA Margin | 17.6% | 16.8% | 19.4% | 20.5% | 16.4% | -4.0% |
| Net Income Margin | 12.1% | 11.2% | 12.9% | 12.7% | 11.4% | -1.3% |
| SG&A, % of revenue | | 44.5% | 48.0% | 50.2% | 55.6% | 5.4% |
| CAPEX, % of revenue | 2.2% | 2.7% | 4.2% | 6.1% | 3.6% | -2.4% |
| ROIC | 34.5% | 27.1% | 27.8% | 27.9% | 18.6% | -9.3% |
| ROE | 44.4% | 25.7% | 22.8% | 22.0% | 17.5% | -4.5% |
| Net Debt/EBITDA | 0.5x | -1.5x | -1.3x | -1.2x | -0.9x | 0.3x |
Revenue and profitability
The company's Revenue decreased slightly on 1.7%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 4.0 pp from 20.5% to 16.4% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased on 5.4 pp from 50.2% to 55.6% in FY2016.
Net Income marign decreased slightly on 1.3 pp from 12.7% to 11.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.6%. CAPEX/Revenue increased slightly on 0.89 pp from 2.7% in FY2013 to 3.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 4.6%.
Return on investment
The company operates at good ROIC (18.60%) and ROE (17.52%). ROIC decreased on 9.3 pp from 27.9% to 18.6% in FY2016. ROE decreased on 4.5 pp from 22.0% to 17.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 0.3x. Net Debt / EBITDA surged on 0.3x from -1.2x to -0.9x in FY2016. Debt jumped on 159% while cash dropped on 26.3%.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find Time Watch Investments Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| Karrie International Hldgs ($1050) | | 0.1% | -11.3% | 27.4% | 11.8% |
| Sunny Optical Technology Group Co Ltd ($2382) | 59.5% | 45.9% | 45.0% | 26.9% | |
| TK Group Holdings Ltd ($2283) | 40.2% | 9.3% | 11.8% | 20.0% | |
| AMCO United Holding Ltd ($2970) | | 10.8% | 53.9% | 16.8% | 31.1% |
| Yusei Holdings Ltd ($96) | 18.4% | -9.3% | 6.7% | 15.6% | |
| |
|---|
| Median (25 companies) | -1.8% | -0.7% | 6.7% | -5.6% | 26.0% |
|---|
| Time Watch Investments Ltd ($2033) | | 25.4% | 25.6% | 10.4% | -1.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Man Sang International Ltd ($938) | 42.4% | 32.8% | 60.3% | 78.6% | 56.4% |
| China Environmental Energy Investment Ltd ($986) | 14.0% | 1.2% | 9.0% | 49.2% | 40.4% |
| Lee & Man Chemical Co Ltd ($746) | 34.3% | 35.7% | 41.9% | 39.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 33.2% | 35.1% | 37.4% | 38.7% | |
| Launch Tech Co Ltd ($2488) | 27.4% | 33.6% | 33.6% | 38.3% | |
| |
|---|
| Median (24 companies) | 19.7% | 19.7% | 23.4% | 22.4% | 20.4% |
|---|
| Time Watch Investments Ltd ($2033) | 60.2% | 60.6% | 65.0% | 68.1% | 68.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 30.4% | 31.3% | 38.4% | 37.6% | |
| Man Sang International Ltd ($938) | 24.9% | 15.4% | 37.0% | 33.8% | 40.4% |
| IPE Group Ltd ($929) | 25.6% | 22.5% | 29.5% | 29.1% | |
| DeTeam Co Ltd ($65) | 8.0% | 3.9% | -1.3% | 24.3% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 18.4% | 19.8% | 20.6% | 24.2% | |
| |
|---|
| Median (25 companies) | 7.9% | 7.8% | 7.4% | 6.1% | 5.7% |
|---|
| Time Watch Investments Ltd ($2033) | 17.6% | 16.8% | 19.4% | 20.5% | 16.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Environmental Energy Investment Ltd ($986) | 6.1% | 0.4% | 17.9% | 47.6% | 6.2% |
| DeTeam Co Ltd ($65) | 6.7% | 47.0% | 5.6% | 33.1% | |
| Lee & Man Chemical Co Ltd ($746) | 5.8% | 51.1% | 33.7% | 22.8% | |
| China International Marine Containers Group Co Ltd ($2039) | 3.9% | 12.1% | 18.5% | 21.2% | |
| IPE Group Ltd ($929) | 6.3% | 13.3% | 12.3% | 13.3% | |
| |
|---|
| Median (25 companies) | 4.7% | 4.2% | 3.8% | 4.3% | 4.0% |
|---|
| Time Watch Investments Ltd ($2033) | 2.2% | 2.7% | 4.2% | 6.1% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TK Group Holdings Ltd ($2283) | 36.8% | 31.1% | 29.4% | 27.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 16.9% | 17.7% | 20.0% | 21.1% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 19.7% | 17.8% | 16.5% | 19.4% | |
| Yusei Holdings Ltd ($96) | 4.2% | 7.0% | 13.6% | 14.1% | |
| AMCO United Holding Ltd ($2970) | | 10.5% | 11.4% | 11.6% | 9.5% |
| |
|---|
| Median (25 companies) | 3.2% | 3.6% | 3.9% | 1.5% | 7.1% |
|---|
| Time Watch Investments Ltd ($2033) | 34.5% | 27.1% | 27.8% | 27.9% | 18.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Continental Holdings Ltd ($513) | | 20.1x | 92.9x | 4,203.6x | |
| South China China Ltd ($413) | | 37.5x | 2,842.3x | 27.3x | |
| Launch Tech Co Ltd ($2488) | 7.6x | 2.4x | 3.9x | 14.5x | |
| China International Marine Containers Group Co Ltd ($2039) | 4.0x | 4.7x | 5.8x | 9.8x | |
| VS International Group Ltd ($1002) | 5.1x | 6.5x | 4.4x | 3.3x | 4.6x |
| |
|---|
| Median (22 companies) | -0.2x | 0.2x | 0.1x | 0.4x | -1.0x |
|---|
| Time Watch Investments Ltd ($2033) | 0.5x | -1.5x | -1.3x | -1.2x | -0.9x |
