Guocang Group Ltd reports 4,198% Net Income decline in 2016 and 632 pp EBITDA Margin decline from -166% to -798%
30/09/2016 • About Guocang Group Ltd (
$559) • By InTwits
Guocang Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Guocang Group Ltd is a company in decline: FY2016 revenue growth was -66.9%, 5 years revenue CAGR was -46.6%
- The company operates at negative EBITDA Margin: -798.4%
- Guocang Group Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -31.5%0
- Guocang Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.9%. At the same time it's in pair with industry average of 7.0%.
- CAPEX is quite volatile: 16.0 in FY2016, 14.3 in FY2015, 2.0 in FY2014, 4.0 in FY2013, 0.44 in FY2012
- The company has unprofitable business model: ROIC is at -11.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guocang Group Ltd ($559) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 311.9 | 411.0 | 94.4 | 49.7 | 16.4 | -66.9% |
| Gross Profit | 14.2 | 52.7 | 21.9 | 28.2 | 5.4 | -80.9% |
| SG&A | 19.2 | 73.5 | 110.6 | 122.4 | 167.8 | 37.0% |
| EBITDA | 8.8 | -2.4 | -71.3 | -82.5 | -131.2 | |
| Net Income | -53.1 | -72.6 | -41.3 | 12.1 | -494.1 | -4,198.4% |
Balance Sheet
|
|---|
| Cash | 288.2 | 328.2 | 406.6 | 179.6 | 63.8 | -64.4% |
| Short Term Debt | 62.2 | 44.1 | 166.7 | 0.0 | 73.5 | |
| Long Term Debt | 0.0 | 0.0 | 69.5 | 179.7 | 110.9 | -38.3% |
Cash flow
|
|---|
| Capex | 0.4 | 4.0 | 2.0 | 14.3 | 16.0 | 12.0% |
Ratios
|
|---|
| Revenue growth | -17.7% | 31.8% | -77.0% | -47.3% | -66.9% | |
| EBITDA growth | -246.2% | -126.9% | 2,912.9% | 15.7% | 59.1% | |
| Gross Margin | 4.6% | 12.8% | 23.2% | 56.8% | 32.9% | -24.0% |
| EBITDA Margin | 2.8% | -0.6% | -75.6% | -166.0% | -798.4% | -632.4% |
| Net Income Margin | -17.0% | -17.7% | -43.7% | 24.3% | -3,006.3% | -3,030.6% |
| SG&A, % of revenue | 6.1% | 17.9% | 117.2% | 246.3% | 1,020.9% | 774.5% |
| CAPEX, % of revenue | 0.1% | 1.0% | 2.1% | 28.8% | 97.6% | 68.8% |
| ROIC | -1.0% | -2.5% | -9.7% | -7.1% | -11.8% | -4.7% |
| ROE | -8.6% | -10.9% | -5.5% | 1.2% | -47.9% | -49.1% |
| Net Debt/EBITDA | -25.7x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 66.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 44.8 pp from 44.2% to 89.0% in FY2016.
Gross Margin dropped on 24.0 pp from 56.8% to 32.9% in FY2016. SG&A as a % of Revenue surged on 775 pp from 246% to 1,021% in FY2016.
Net Income marign dropped on 3,031 pp from 24.3% to -3,006% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Guocang Group Ltd's CAPEX/Revenue was 97.6% in FY2016. CAPEX/Revenue jumped on 96.6 pp from 0.98% in FY2013 to 97.6% in FY2016. It's average CAPEX/Revenue for the last three years was 42.8%.
Return on investment
The company operates at negative ROIC (-11.76%) and ROE (-47.90%). ROIC decreased on 4.7 pp from -7.1% to -11.8% in FY2016. ROE dropped on 49.1 pp from 1.2% to -47.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -37.7x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt increased on 2.6% while cash dropped on 64.4%.
Appendix 1: Peers in Holding Companies-Divers
Below you can find Guocang Group Ltd benchmarking vs. other companies in Holding Companies-Divers 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 |
|---|
| 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) | 9.4% | 4.9% | 15.7% | 6.6% | -4.5% |
|---|
| Guocang Group Ltd ($559) | | 31.8% | -77.0% | -47.3% | -66.9% |
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% | 34.2% | 41.8% |
|---|
| Guocang Group Ltd ($559) | 4.6% | 12.8% | 23.2% | 56.8% | 32.9% |
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) | 3.3% | 3.8% | 9.3% | 7.3% | 9.1% |
|---|
| Guocang Group Ltd ($559) | 2.8% | -0.6% | -75.6% | -166.0% | -798.4% |
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% | 5.8% | 7.7% |
|---|
| Guocang Group Ltd ($559) | 0.1% | 1.0% | 2.1% | 28.8% | 97.6% |
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) | 0.1% | 0.6% | 1.2% | 0.4% | 2.1% |
|---|
| Guocang Group Ltd ($559) | -1.0% | -2.5% | -9.7% | -7.1% | -11.8% |
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 (26 companies) | 2.4x | 2.7x | 2.8x | 2.4x | 4.3x |
|---|
