Daisho Microline Holdings Ltd reports 173% CAPEX growth while 2.4% Revenue decline
07/10/2016 • About Daisho Microline Holdings Ltd (
$567) • By InTwits
Daisho Microline Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Daisho Microline Holdings Ltd is a company in decline: FY2015 revenue growth was -2.4%, 5 years revenue CAGR was -7.3%
- The company operates at negative EBITDA Margin: -14.9%
- Daisho Microline Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: 34.1 in FY2015, 12.5 in FY2014, 8.7 in FY2013, 0.62 in FY2012, 14.2 in FY2011
- The company has unprofitable business model: ROIC is at -9.0%
- It operates with high leverage: Net Debt/EBITDA is 6.2x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Daisho Microline Holdings Ltd ($567) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 442.4 | 362.0 | 295.9 | 244.4 | 238.6 | -2.4% |
| Gross Profit | 55.2 | 0.1 | 15.6 | 9.8 | 7.8 | -20.5% |
| SG&A | | | 38.2 | 36.2 | 46.8 | 29.1% |
| EBITDA | 51.2 | -1.1 | 4.0 | -9.5 | -35.5 | 272.2% |
| Net Income | 16.7 | -92.3 | -68.5 | -37.5 | 14.3 | -138.1% |
Balance Sheet
|
|---|
| Cash | 157.7 | 160.2 | 109.5 | 70.8 | 91.1 | 28.7% |
| Short Term Debt | 82.4 | 97.4 | 161.7 | 237.3 | 241.8 | 1.9% |
| Long Term Debt | 16.6 | 18.5 | 3.1 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 14.2 | 0.6 | 8.7 | 12.5 | 34.1 | 173.1% |
Ratios
|
|---|
| Revenue growth | 27.1% | -18.2% | -18.3% | -17.4% | -2.4% | |
| EBITDA growth | 3.9% | -102.2% | -455.8% | -336.4% | 272.2% | |
| Gross Margin | 12.5% | 0.0% | 5.3% | 4.0% | 3.3% | -0.7% |
| EBITDA Margin | 11.6% | -0.3% | 1.4% | -3.9% | -14.9% | -11.0% |
| Net Income Margin | 3.8% | -25.5% | -23.2% | -15.4% | 6.0% | 21.4% |
| SG&A, % of revenue | | | 12.9% | 14.8% | 19.6% | 4.8% |
| CAPEX, % of revenue | 3.2% | 0.2% | 2.9% | 5.1% | 14.3% | 9.2% |
| ROIC | 2.3% | -7.6% | -4.8% | -5.0% | -9.0% | -3.9% |
| ROE | 3.7% | -21.1% | -18.5% | -11.7% | 4.6% | 16.3% |
| Net Debt/EBITDA | -1.1x | | 13.7x | | | 0.0x |
Revenue and profitability
Daisho Microline Holdings Ltd's Revenue decreased on 2.4% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.0 pp from -3.9% to -14.9% in FY2015.
Gross Margin decreased slightly on 0.74 pp from 4.0% to 3.3% in FY2015. SG&A as a % of Revenue increased on 4.8 pp from 14.8% to 19.6% in FY2015.
Net Income marign surged on 21.4 pp from -15.4% to 6.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 14.3%. The company's CAPEX/Revenue surged on 14.1 pp from 0.17% in FY2012 to 14.3% in FY2015. Average CAPEX/Revenue for the last three years was 7.5%.
Return on investment
The company operates at negative ROIC (-8.96%) and low but positive ROE (4.62%). ROIC decreased on 3.9 pp from -5.0% to -9.0% in FY2015. ROE jumped on 16.3 pp from -11.7% to 4.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt increased slightly on 1.9% in FY2015 while cash surged on 28.7% in FY2015.
Appendix 1: Peers in Electronics
Below you can find Daisho Microline Holdings Ltd benchmarking vs. other companies in Electronics 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| GCL New Energy Holdings Ltd ($451) | | 14.7% | -6.8% | 10.9% | 53.9% |
| Tech Pro Technology Development Ltd ($3823) | | 7.4% | -44.9% | -13.7% | 52.4% |
| Nanjing Sample Technology Co Ltd ($1708) | | 36.1% | 8.0% | 15.4% | 34.8% |
| AAC Technologies Holdings Inc ($2018) | | 54.8% | 28.9% | 9.7% | 32.2% |
| Ningbo Wanhao Holdings Co Ltd ($8249) | | 5.7% | 412.4% | -6.9% | 28.9% |
| |
|---|
| Median (50 companies) | | 5.7% | 4.1% | 7.2% | 0.4% |
|---|
| Daisho Microline Holdings Ltd ($567) | | -18.2% | -18.3% | -17.4% | -2.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | 49.6% |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | 41.5% |
| TeleEye Holdings Ltd ($8051) | | 44.0% | 42.1% | 38.5% | 37.0% |
| Hi Sun Technology China Ltd ($818) | 20.8% | 28.1% | 37.4% | 33.3% | 34.7% |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | 34.6% |
| |
|---|
| Median (48 companies) | 16.7% | 14.1% | 13.8% | 14.1% | 15.3% |
|---|
| Daisho Microline Holdings Ltd ($567) | 12.5% | 0.0% | 5.3% | 4.0% | 3.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | 34.8% |
| GCL New Energy Holdings Ltd ($451) | 12.1% | 10.8% | 11.1% | 12.6% | 33.0% |
| Daiwa Associate Holdings ($1037) | | 2.4% | 3.8% | 2.8% | 25.6% |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | 19.3% |
| Tongda Group Holdings Ltd ($698) | 15.3% | 17.1% | 16.8% | 18.4% | 18.9% |
| |
|---|
| Median (50 companies) | 10.3% | 7.4% | 7.6% | 5.4% | 5.1% |
|---|
| Daisho Microline Holdings Ltd ($567) | 11.6% | -0.3% | 1.4% | -3.9% | -14.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| GCL New Energy Holdings Ltd ($451) | 11.1% | 5.5% | 5.1% | 5.4% | 401.2% |
| National Electronic Hldgs ($213) | | 3.4% | 18.1% | 7.1% | 49.7% |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | 25.8% |
| Kingwell Group Ltd ($1195) | | 8.6% | 5.4% | 5.3% | 21.4% |
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | 18.4% |
| |
|---|
| Median (50 companies) | 5.0% | 3.9% | 3.2% | 3.7% | 2.9% |
|---|
| Daisho Microline Holdings Ltd ($567) | 3.2% | 0.2% | 2.9% | 5.1% | 14.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | 27.8% |
| Cowell e Holdings Inc ($1415) | | 12.5% | 27.1% | 24.4% | 25.8% |
| Changhong Jiahua Holdings Ltd ($8016) | 8.7% | 29.6% | 17.7% | 15.1% | 16.7% |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | 16.3% |
| Alltronics Holdings Ltd ($833) | 19.3% | 13.1% | 15.2% | 19.8% | 15.6% |
| |
|---|
| Median (50 companies) | 7.2% | 4.6% | 4.1% | 3.7% | 2.4% |
|---|
| Daisho Microline Holdings Ltd ($567) | 2.3% | -7.6% | -4.8% | -5.0% | -9.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | | 16.3x | 30.2x | 84.8x | 19.9x |
| GCL New Energy Holdings Ltd ($451) | 2.7x | 2.9x | 2.6x | 1.7x | 17.4x |
| Man Yue Technology Holdings Ltd ($894) | 1.7x | 2.1x | 2.7x | 3.3x | 6.5x |
| Willas-Array Electronics Holdings Ltd ($854) | | 2.2x | 2.6x | 5.7x | 5.4x |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | 4.8x |
| |
|---|
| Median (33 companies) | 0.8x | 1.0x | 1.1x | 0.8x | 0.2x |
|---|
