Mega Expo Holdings Ltd reports 1,648% CAPEX growth in 2016 while 14.9% Revenue decline
28/09/2016 • About Mega Expo Holdings Ltd (
$1360) • By InTwits
Mega Expo Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mega Expo Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -19.1%
- EBITDA Margin is declining: -11.3% in FY2016 vs. 8.1% in FY2015 vs. 18.8% in FY2012
- EBITDA Margin is quite volatile: -11.3% in FY2016, 8.1% in FY2015, 10.8% in FY2014, 16.0% in FY2013, 18.8% in FY2012
- Mega Expo Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 8.2 in FY2016, 0.47 in FY2015, 10.4 in FY2014, 1.7 in FY2013, 0.21 in FY2012
- The company has unprofitable business model: ROIC is at -19.1%
- It operates with high leverage: Net Debt/EBITDA is 0.8x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mega Expo Holdings Ltd ($1360) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 166.8 | 220.6 | 205.8 | 188.3 | 160.3 | -14.9% |
| SG&A | | | | 25.7 | 19.1 | -25.9% |
| EBITDA | 31.4 | 35.4 | 22.2 | 15.3 | -18.2 | -218.6% |
| Net Income | 25.1 | 26.2 | 14.1 | 45.9 | -67.3 | -246.7% |
Balance Sheet
|
|---|
| Cash | 29.9 | 73.8 | 135.1 | 230.7 | 28.4 | -87.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.2 | 1.7 | 10.4 | 0.5 | 8.2 | 1,647.8% |
Ratios
|
|---|
| Revenue growth | 12.9% | 32.3% | -6.7% | -8.5% | -14.9% | |
| EBITDA growth | -0.2% | 12.8% | -37.1% | -31.1% | -218.6% | |
| EBITDA Margin | 18.8% | 16.0% | 10.8% | 8.1% | -11.3% | -19.5% |
| Net Income Margin | 15.0% | 11.9% | 6.9% | 24.4% | -42.0% | -66.4% |
| SG&A, % of revenue | | | | 13.7% | 11.9% | -1.8% |
| CAPEX, % of revenue | 0.1% | 0.8% | 5.0% | 0.2% | 5.1% | 4.8% |
| ROIC | 270.5% | 481.1% | 54.4% | 10.1% | -19.1% | -29.1% |
| ROE | 924.9% | | | 42.1% | -54.3% | -96.4% |
| Net Debt/EBITDA | -1.0x | -2.1x | -6.1x | -15.1x | | 15.1x |
Revenue and profitability
Mega Expo Holdings Ltd's Revenue dropped on 14.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 19.5 pp from 8.1% to -11.3% in FY2016.
SG&A as a % of Revenue decreased slightly on 1.8 pp from 13.7% to 11.9% in FY2016.
Net Income marign dropped on 66.4 pp from 24.4% to -42.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.1% in FY2016. CAPEX/Revenue increased on 4.3 pp from 0.77% in FY2013 to 5.1% in FY2016. For the last three years the average CAPEX/Revenue was 3.5%.
Return on investment
The company operates at negative ROIC (-19.07%) and ROE (-54.27%). ROIC dropped on 29.1 pp from 10.1% to -19.1% in FY2016. ROE dropped on 96.4 pp from 42.1% to -54.3% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 87.7%.
Appendix 1: Peers in Commercial Services
Below you can find Mega Expo Holdings Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| 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% | 4.7% | 9.4% |
|---|
| Mega Expo Holdings Ltd ($1360) | | 32.3% | -6.7% | -8.5% | -14.9% |
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 (62 companies) | 31.6% | 30.7% | 31.0% | 31.2% | 26.9% |
|---|
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) | 17.5% | 14.9% | 12.9% | 10.1% | 1.0% |
|---|
| Mega Expo Holdings Ltd ($1360) | 18.8% | 16.0% | 10.8% | 8.1% | -11.3% |
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% | 3.8% | 2.4% | 3.9% | 1.7% |
|---|
| Mega Expo Holdings Ltd ($1360) | 0.1% | 0.8% | 5.0% | 0.2% | 5.1% |
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% | 3.3% | 1.5% |
|---|
| Mega Expo Holdings Ltd ($1360) | 270.5% | 481.1% | 54.4% | 10.1% | -19.1% |
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 (44 companies) | 0.0x | -0.7x | -0.6x | -0.6x | -2.4x |
|---|
| Mega Expo Holdings Ltd ($1360) | -1.0x | -2.1x | -6.1x | -15.1x | |
