Heng Tai Consumables Group Ltd reports 890% EBITDA growth in 2016 and 2.0 pp EBITDA Margin growth from 0.18% to 2.2%
30/09/2016 • About Heng Tai Consumables Group Ltd (
$197) • By InTwits
Heng Tai Consumables Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Heng Tai Consumables Group Ltd is a company in decline: FY2016 revenue growth was -16.8%, 5 years revenue CAGR was -8.4%
- Heng Tai Consumables Group Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -3.2% for the sames years0
- Heng Tai Consumables Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.5%. At the same time it's in pair with industry average of 4.8%.
- CAPEX is quite volatile: 43.1 in FY2016, 55.1 in FY2015, 90.2 in FY2014, 142 in FY2013, 170 in FY2012
- The company has unprofitable business model: ROIC is at -2.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Heng Tai Consumables Group Ltd ($197) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,028 | 1,902 | 1,712 | 1,641 | 1,366 | -16.8% |
| Gross Profit | 348 | 209 | 140 | 136 | 142 | 4.4% |
| SG&A | | 386 | 312 | 215 | 189 | -12.2% |
| EBITDA | 96 | -50 | -353 | 3 | 30 | 889.9% |
| Net Income | -30 | -179 | -682 | -73 | -273 | |
Balance Sheet
|
|---|
| Cash | 726 | 545 | 301 | 348 | 431 | 23.7% |
| Short Term Debt | 83 | 88 | 66 | 64 | 61 | -4.9% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | -32.7% |
Cash flow
|
|---|
| Capex | 170 | 142 | 90 | 55 | 43 | -21.8% |
Ratios
|
|---|
| Revenue growth | -4.5% | -6.2% | -10.0% | -4.1% | -16.8% | |
| EBITDA growth | -64.0% | -151.8% | 608.0% | -100.9% | 889.9% | |
| Gross Margin | 17.2% | 11.0% | 8.2% | 8.3% | 10.4% | 2.1% |
| EBITDA Margin | 4.7% | -2.6% | -20.6% | 0.2% | 2.2% | 2.0% |
| Net Income Margin | -1.5% | -9.4% | -39.8% | -4.5% | -20.0% | -15.5% |
| SG&A, % of revenue | | 20.3% | 18.2% | 13.1% | 13.8% | 0.7% |
| CAPEX, % of revenue | 8.4% | 7.5% | 5.3% | 3.4% | 3.2% | -0.2% |
| ROIC | -0.9% | -5.6% | -15.6% | -3.2% | -2.0% | 1.2% |
| ROE | -0.9% | -5.1% | -22.2% | -2.6% | -10.1% | -7.5% |
| Net Debt/EBITDA | -6.7x | | | -93.9x | -12.3x | 81.5x |
Revenue and profitability
The company's Revenue dropped on 16.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 0.18% to 2.2% in FY2016.
Gross Margin increased on 2.1 pp from 8.3% to 10.4% in FY2016. SG&A as a % of Revenue increased slightly on 0.72 pp from 13.1% to 13.8% in FY2016.
Net Income marign dropped on 15.5 pp from -4.5% to -20.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.2%. CAPEX/Revenue decreased on 4.3 pp from 7.5% in FY2013 to 3.2% in FY2016. For the last three years the average CAPEX/Revenue was 3.9%.The company has spent a lot to CAPEX (144% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-2.02%) and ROE (-10.13%). ROIC increased slightly on 1.2 pp from -3.2% to -2.0% in FY2016. ROE decreased on 7.5 pp from -2.6% to -10.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -12.3x and Debt / EBITDA is 2.1x. Net Debt / EBITDA surged on 81.5x from -93.9x to -12.3x in FY2016. Debt decreased on 4.9% while cash jumped on 23.7%.
Appendix 1: Peers in Food
Below you can find Heng Tai Consumables Group Ltd benchmarking vs. other companies in Food 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 |
|---|
| Imperial Pacific International Holdings Ltd ($1076) | -27.6% | -18.5% | 2.7% | 70.3% | |
| China Shengmu Organic Milk Ltd ($1432) | 80.0% | 63.2% | 86.4% | 45.4% | |
| Chinese Food and Beverage Group ($8272) | 207.7% | 149.2% | 26.8% | 31.6% | |
| Huisheng International Holdings Ltd ($1340) | -2.4% | 5.6% | 8.7% | 25.9% | |
| Jiashili Group Ltd ($1285) | 14.9% | 15.1% | 12.3% | 19.8% | |
| |
|---|
| Median (42 companies) | 10.2% | 9.0% | 5.5% | -2.9% | -8.3% |
|---|
| Heng Tai Consumables Group Ltd ($197) | | -6.2% | -10.0% | -4.1% | -16.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hung Fook Tong Group Holdings Ltd ($1446) | 60.7% | 60.0% | 58.7% | 60.7% | |
| Honworld Group Ltd ($2226) | 57.2% | 59.0% | 57.8% | 56.4% | |
| Yashili International Holdings Ltd ($1230) | 53.7% | 53.5% | 51.2% | 50.8% | |
| Natural Dairy NZ Holdings Ltd ($462) | -13.7% | 27.5% | 48.8% | 49.6% | |
| China Shengmu Organic Milk Ltd ($1432) | 33.4% | 42.9% | 50.2% | 47.7% | |
| |
|---|
| Median (41 companies) | 16.5% | 20.3% | 22.2% | 23.7% | 20.2% |
|---|
| Heng Tai Consumables Group Ltd ($197) | 17.2% | 11.0% | 8.2% | 8.3% | 10.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shenguan Holdings Group Ltd ($829) | 58.7% | 59.2% | 54.5% | 43.6% | |
| Honworld Group Ltd ($2226) | 44.4% | 42.1% | 42.0% | 42.9% | |
| China Shengmu Organic Milk Ltd ($1432) | 31.5% | 38.3% | 47.1% | 41.9% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 45.1% | 47.9% | 47.1% | 37.2% | 36.0% |
| YuanShengTai Dairy Farm Ltd ($1431) | 40.3% | 48.4% | 47.1% | 35.4% | |
| |
|---|
| Median (41 companies) | 8.1% | 7.1% | 7.9% | 8.5% | 4.7% |
|---|
| Heng Tai Consumables Group Ltd ($197) | 4.7% | -2.6% | -20.6% | 0.2% | 2.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 98.2% | 29.8% | 132.0% | 109.8% | 37.5% |
| Imperial Pacific International Holdings Ltd ($1076) | 0.0% | 0.0% | 15.6% | 88.5% | |
| China Modern Dairy Holdings Ltd ($1117) | 50.6% | | 18.7% | 42.4% | |
| Labixiaoxin Snacks Group Ltd ($1262) | 13.3% | 10.3% | 14.6% | 32.0% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 26.1% | 18.3% | 43.4% | 30.1% | |
| |
|---|
| Median (40 companies) | 5.1% | 5.3% | 5.1% | 4.9% | 0.6% |
|---|
| Heng Tai Consumables Group Ltd ($197) | 8.4% | 7.5% | 5.3% | 3.4% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Major Holdings Ltd ($8209) | | 23.1% | 13.8% | 22.3% | 7.8% |
| Jiashili Group Ltd ($1285) | 45.6% | 51.8% | 27.8% | 22.2% | |
| Want Want China Holdings Ltd ($151) | 27.9% | 29.4% | 22.8% | 21.8% | |
| China Shengmu Organic Milk Ltd ($1432) | 16.4% | 19.6% | 22.5% | 17.3% | |
| Honworld Group Ltd ($2226) | 50.4% | 44.5% | 23.6% | 16.5% | |
| |
|---|
| Median (43 companies) | 8.4% | 7.3% | 7.4% | 5.6% | 2.4% |
|---|
| Heng Tai Consumables Group Ltd ($197) | -0.9% | -5.6% | -15.6% | -3.2% | -2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ausnutria Dairy Corp Ltd ($1717) | -1.4x | 0.8x | 1.7x | 27.9x | |
| Beijing Jingkelong Co Ltd ($814) | 5.0x | 4.8x | 5.3x | 9.3x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.8x | 3.8x | 4.5x | 5.6x | |
| China Kangda Food Co Ltd ($834) | 2.8x | 2.5x | 2.3x | 5.4x | |
| China Modern Dairy Holdings Ltd ($1117) | 3.7x | 5.2x | 4.1x | 5.3x | |
| |
|---|
| Median (32 companies) | 0.1x | 0.8x | 0.7x | 1.2x | 1.6x |
|---|
| Heng Tai Consumables Group Ltd ($197) | -6.7x | | | -93.9x | -12.3x |
