Emperor Capital Group Ltd is an attractive stock for a growth investor
15/12/2016 • About Emperor Capital Group Ltd (
$717) • By InTwits
Emperor Capital Group Ltd is a fast-growing stock in Diversified Finan Serv industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Emperor Capital Group Ltd showed fast growth in the last financial year. The company's revenue surged on 18.1% in FY2016. In addition to revenue Emperor Capital Group Ltd also keeps delivering EBITDA growth. It was 23.2% in FY2016
In the last 3 years the company showed fast revenue growth of 31.4% from FY2013 to FY2016 annualy. EBITDA surged on 54.0% from FY2013 to FY2016 annualy.
Emperor Capital Group Ltd ($717) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 224 | 435 | 546 | 835 | 986 |
|---|
| Revenue growth, % | | 94.3% | 25.7% | 52.8% | 18.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 66 | 193 | 309 | 572 | 704 |
|---|
| EBITDA growth, % | | 191.4% | 60.2% | 85.2% | 23.2% |
|---|
| EBITDA margin, % | 29.6% | 44.3% | 56.5% | 68.4% | 71.4% |
|---|
| Net Income | 63 | 156 | 221 | 430 | 526 |
|---|
| Net Income margin, % | 28.3% | 35.8% | 40.4% | 51.5% | 53.3% |
|---|
| |
| CAPEX | 4 | 2 | 2 | 2 | 1 |
|---|
| CAPEX/Revenue, % | 1.68% | 0.423% | 0.389% | 0.195% | 0.103% |
|---|
| Debt | 0 | 310 | 1,326 | 1,086 | 2,120 |
|---|
| Cash | 222 | 339 | 528 | 462 | 480 |
|---|
| Net Debt/EBITDA | -3.4x | -0.1x | 2.6x | 1.1x | 2.3x |
|---|
| |
| ROIC, % | 5.1% | 12.8% | 13.1% | 14.6% | 12.4% |
|---|
| ROE, % | 5.1% | 11.8% | 14.9% | 16.5% | 13.3% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. Emperor Capital Group Ltd's EBITDA margin increased slightly on 3 pp from 68.4% to 71.4% in FY2016. If we look for the longer period the company showed fast EBITDA margin growth of 27.1 pp from 44.3% in FY2013 to 71.4% in FY2016.
We call Emperor Capital Group Ltd an attractive growth stock as together with the growth it delivers high ROIC at 12.4%. Three years ago it was about the same at 12.8%. It's average ROIC for the last three years was 13.4%.
The company's Net Income margin increased slightly on 1.80 pp from 51.5% to 53.3% in FY2016. In the longer period Emperor Capital Group Ltd's Net Income margin surged on 17.5 pp from 35.8% in FY2013 to 53.3% in FY2016.
Emperor Capital Group Ltd operates at ROE of 13.3%. Average ROE for the last three years was 14.9%.
Capital expenditures (CAPEX)
Emperor Capital Group Ltd's CAPEX/Revenue was 0.103% in FY2016. CAPEX/Revenue dropped on 0.319 pp from 0.423% in FY2013 to 0.103% in FY2016. It's average CAPEX/Revenue for the last three years was 0.229%.
Leverage (Debt)
Having such a fast growth profile Emperor Capital Group Ltd keeps medium debt level at 2.3x Net Debt/EBITDA. In the last 3 years leverage surged on 2.48x from -0.15x in FY2013 to 2.33x in FY2016.
Valuation vs. comparable companies
At the end of trading day today Emperor Capital Group Ltd traded at 8.8x EV/EBITDA which is 73.3% lower than 33.1x Diversified Finan Serv peer group avearge calculated on the basis of 72 companies. The company trades at 8.7x P/E which is 88.8% lower than 78.1x Diversified Finan Serv industry avearge calculated based on 19 companies.
Peers in Diversified Finan Serv
Below you can find Emperor Capital Group Ltd benchmarking vs. other companies in Diversified Finan Serv 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | | -23.1% | -87.3% | 1,860.5% | 25.3% |
| Crown International Corp Ltd ($727) | | -75.0% | 117.4% | 802.5% | -25.1% |
| Global Strategic Group Ltd ($8007) | -3.9% | 2.1% | 806.3% | 681.2% | |
| Upbest Group Ltd ($335) | | -61.8% | 24.1% | 208.1% | -63.4% |
| GF Securities Co Ltd ($1776) | 16.3% | 31.8% | 75.0% | 163.9% | |
| |
|---|
| Median (64 companies) | 7.7% | 14.9% | 27.6% | 24.0% | 19.1% |
|---|
| Emperor Capital Group Ltd ($717) | | 94.3% | 25.7% | 52.8% | 18.1% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Roma Group Ltd ($8072) | | | 99.4% | 98.7% | |
| First China Financial Network Holdings Ltd ($8123) | 93.4% | | 94.5% | 97.4% | |
| China Smarter Energy Group Holdings Ltd ($1004) | 6.2% | 4.0% | 46.9% | 96.9% | 98.4% |
| Chinese Strategic Holdings Ltd ($8089) | 99.1% | 97.9% | 97.0% | 96.6% | |
| Allied Group Ltd ($373) | 95.1% | 94.4% | 93.6% | 92.2% | |
| |
|---|
| Median (12 companies) | 64.2% | 75.1% | 88.2% | 90.3% | 69.9% |
|---|
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -282.7% | -373.2% | -1,524.9% | 212.2% | 55.6% |
| China Aircraft Leasing Group Holdings Ltd ($1848) | 91.3% | 86.4% | 92.9% | 107.0% | |
| Get Nice Holdings Ltd ($64) | 2.6% | 153.4% | 92.7% | 83.9% | 84.5% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 81.6% | 73.4% | 75.7% | 82.1% | |
| Hong Kong Finance Group Co Ltd ($1273) | 76.9% | 67.5% | 65.2% | 74.8% | 70.3% |
| |
|---|
| Median (66 companies) | 18.8% | 36.2% | 47.2% | 31.4% | 49.6% |
|---|
| Emperor Capital Group Ltd ($717) | 29.6% | 44.3% | 56.5% | 68.4% | 71.4% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Aircraft Leasing Group Holdings Ltd ($1848) | 351.0% | 0.1% | 33.3% | 64.6% | |
| Willie International Holdings Ltd ($273) | | 0.3% | 0.8% | 58.0% | |
| China Assurance Finance Group Ltd ($8090) | 94.7% | 68.9% | 53.3% | 51.0% | |
| AID Partners Capital Holdings Ltd ($8088) | 4.1% | 2.9% | 28.4% | 26.6% | |
| Hongkong Chinese Ltd ($655) | | | 0.1% | 25.6% | 0.1% |
| |
|---|
| Median (65 companies) | 2.1% | 1.9% | 1.1% | 1.5% | 1.5% |
|---|
| Emperor Capital Group Ltd ($717) | 1.7% | 0.4% | 0.4% | 0.2% | 0.1% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Hong Kong Exchanges and Clearing Ltd ($388) | 29.1% | 20.1% | 21.5% | 29.1% | |
| China Smarter Energy Group Holdings Ltd ($1004) | -19.4% | -23.0% | -14.0% | 22.5% | 2.1% |
| Oi Wah Pawnshop Credit Holdings Ltd ($1319) | 32.7% | 20.7% | 14.0% | 15.3% | 12.5% |
| Roma Group Ltd ($8072) | 19.6% | 43.7% | 107.8% | 13.3% | 9.8% |
| Orient Securities International Holdings Ltd ($8001) | 10.6% | 13.3% | 12.1% | 12.4% | |
| |
|---|
| Median (69 companies) | 3.9% | 4.0% | 4.8% | 3.5% | 3.0% |
|---|
| Emperor Capital Group Ltd ($717) | 5.1% | 12.8% | 13.1% | 14.6% | 12.4% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Hoifu Energy Group Ltd ($7) | | | | 62.5x | |
| South China Financial Holdings Ltd ($619) | | | | 56.9x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 2.1x | 10.3x | 9.3x | 39.3x | 4.3x |
| Far East Horizon Ltd ($3360) | 16.9x | 21.7x | 20.0x | 20.8x | |
| Quam Ltd ($952) | 58.9x | 15.9x | 4.1x | 14.8x | -18.0x |
| |
|---|
| Median (49 companies) | -0.5x | 0.3x | -0.1x | -0.1x | 0.5x |
|---|
| Emperor Capital Group Ltd ($717) | -3.4x | -0.1x | 2.6x | 1.1x | 2.3x |
