Hengxin Technology Ltd EBITDA dropped on 18.5% and EBITDA Margin decreased slightly on 1.8 pp from 10.7% to 8.9%
16/02/2017 • About Hengxin Technology Ltd (
$1085) • By InTwits
Hengxin Technology Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 8.9% in FY2016 vs. 10.7% in FY2015 vs. 9.8% in FY2012
- Hengxin Technology Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 6.2%.
- CAPEX is quite volatile: 16.6 in FY2016, 30.2 in FY2015, 53.3 in FY2014, 11.1 in FY2013, 12.6 in FY2012
- The company has business model with low profitability: ROIC is at 7.9%
- It operates with high leverage: Net Debt/EBITDA is -3.9x while industry average is -19.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hengxin Technology Ltd ($1085) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,134 | 1,238 | 1,475 | 1,566 | 1,532 | -2.2% |
| Gross Profit | 208 | 242 | 262 | 306 | 317 | 3.5% |
| SG&A | 101 | 108 | 113 | 132 | 161 | 22.2% |
| EBITDA | 111 | 128 | 140 | 167 | 136 | -18.5% |
| Net Income | 67 | 79 | 97 | 115 | 100 | -13.3% |
Balance Sheet
|
|---|
| Cash | 266 | 372 | 469 | 606 | 554 | -8.5% |
| Short Term Debt | 42 | 177 | 205 | 117 | 27 | -77.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 13 | 11 | 53 | 30 | 17 | -45.1% |
Ratios
|
|---|
| Revenue growth | -20.1% | 9.2% | 19.2% | 6.1% | -2.2% | |
| EBITDA growth | -32.3% | 15.5% | 8.7% | 19.5% | -18.5% | |
| Gross Margin | 18.4% | 19.6% | 17.7% | 19.5% | 20.7% | 1.1% |
| EBITDA Margin | 9.8% | 10.4% | 9.5% | 10.7% | 8.9% | -1.8% |
| Net Income Margin | 5.9% | 6.4% | 6.6% | 7.4% | 6.5% | -0.8% |
| SG&A, % of revenue | 8.9% | 8.7% | 7.6% | 8.4% | 10.5% | 2.1% |
| CAPEX, % of revenue | 1.1% | 0.9% | 3.6% | 1.9% | 1.1% | -0.8% |
| ROIC | 8.1% | 9.3% | 9.0% | 10.2% | 7.9% | -2.3% |
| ROE | 6.9% | 7.5% | 8.6% | 9.4% | 7.4% | -1.9% |
| Net Debt/EBITDA | -2.0x | -1.5x | -1.9x | -2.9x | -3.9x | -1.0x |
Revenue and profitability
Hengxin Technology Ltd's Revenue decreased on 2.2%. 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 slightly on 1.1 pp from 19.5% to 20.7% in FY2016. SG&A as a % of Revenue increased on 2.1 pp from 8.4% to 10.5% in FY2016.
Net Income marign decreased slightly on 0.84 pp from 7.4% to 6.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Hengxin Technology Ltd's CAPEX/Revenue was 1.1% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at low ROIC (7.91%) and ROE (7.44%). ROIC decreased on 2.3 pp from 10.2% to 7.9% in FY2016. ROE decreased slightly on 1.9 pp from 9.4% to 7.4% in FY2016.
Leverage (Debt)
Debt level is -3.9x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from -2.9x to -3.9x in FY2016. Debt dropped on 77.0% while cash decreased on 8.5%.
Appendix 1: Peers in Electrical Compo&Equip
Below we provide Hengxin Technology Ltd benchmarking against other companies in Electrical Compo&Equip industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Applied Development Holdings Ltd ($519) | | | | 850.5% | 187.4% |
| Jimei International Entertainment Group Ltd ($1159) | 100.6% | 652.0% | -31.2% | 273.5% | |
| FDG Electric Vehicles Ltd ($729) | | -7.0% | 54.0% | 270.8% | 19.7% |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | -12.0% | 8.7% | 44.1% | 69.8% | |
| Sun King Power Electronics Group ($580) | -6.0% | 29.0% | -30.1% | 51.2% | |
| |
|---|
| Median (33 companies) | 0.9% | 8.5% | 15.5% | 6.0% | 3.1% |
|---|
| Hengxin Technology Ltd ($1085) | | 9.2% | 19.2% | 6.1% | -2.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Titans Energy Technology Group Co Ltd ($2188) | 41.4% | 27.3% | 33.7% | 36.6% | |
| Boer Power Holdings Ltd ($1685) | 36.8% | 36.0% | 35.3% | 35.7% | |
| Sun King Power Electronics Group ($580) | 25.4% | 30.0% | 30.8% | 34.1% | |
| China High Speed Transmission Equipment Group Co Ltd ($658) | 24.4% | 24.9% | 24.8% | 32.5% | |
| CEC International Holdings Ltd ($759) | 23.6% | 27.9% | 29.9% | 31.8% | 33.4% |
| |
|---|
| Median (31 companies) | 19.6% | 17.4% | 16.2% | 16.2% | 26.4% |
|---|
| Hengxin Technology Ltd ($1085) | 18.4% | 19.6% | 17.7% | 19.5% | 20.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shougang Concord Technology Holdings ($521) | 12.3% | 28.1% | 31.9% | 45.8% | |
| Boer Power Holdings Ltd ($1685) | 26.3% | 27.8% | 28.5% | 28.6% | |
| China High Speed Transmission Equipment Group Co Ltd ($658) | 20.2% | 19.2% | 20.8% | 26.3% | |
| China Titans Energy Technology Group Co Ltd ($2188) | 10.8% | -11.9% | 2.0% | 16.5% | |
| Sun King Power Electronics Group ($580) | 8.4% | 13.8% | 2.2% | 15.8% | |
| |
|---|
| Median (33 companies) | 7.8% | 7.0% | 3.8% | 6.2% | -1.1% |
|---|
| Hengxin Technology Ltd ($1085) | 9.8% | 10.4% | 9.5% | 10.7% | 8.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| FDG Electric Vehicles Ltd ($729) | 374.3% | 82.3% | 71.1% | 417.0% | 311.5% |
| Applied Development Holdings Ltd ($519) | 79.7% | | 1,285.3% | 89.8% | 683.8% |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | 23.1% | 50.7% | 13.5% | 22.8% | |
| Jimei International Entertainment Group Ltd ($1159) | 0.1% | 15.2% | 0.6% | 7.3% | |
| CEC International Holdings Ltd ($759) | 8.8% | 10.1% | 4.3% | 6.9% | 2.8% |
| |
|---|
| Median (33 companies) | 6.7% | 5.4% | 4.0% | 2.6% | 10.0% |
|---|
| Hengxin Technology Ltd ($1085) | 1.1% | 0.9% | 3.6% | 1.9% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Boer Power Holdings Ltd ($1685) | 18.0% | 17.0% | 21.2% | 19.5% | |
| Tianneng Power International Ltd ($819) | 20.0% | 4.5% | -3.6% | 14.9% | |
| Jiangnan Group Ltd ($1366) | 14.9% | 14.1% | 13.5% | 12.8% | |
| Xinjiang Goldwind Science & Technology Co Ltd ($2208) | 1.8% | 3.0% | 10.4% | 12.0% | |
| Johnson Electric Holdings Ltd ($179) | 11.7% | 11.6% | 12.7% | 11.2% | 7.4% |
| |
|---|
| Median (33 companies) | 2.7% | 3.0% | 0.7% | 2.7% | -2.0% |
|---|
| Hengxin Technology Ltd ($1085) | 8.1% | 9.3% | 9.0% | 10.2% | 7.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wai Chi Holdings Co Ltd ($1305) | 3.4x | 3.1x | 2.0x | 11.8x | |
| Coslight Technology International Group Co Ltd ($1043) | 51.9x | 8.7x | 54.7x | 7.7x | |
| Guodian Technology & Environment Group Corp Ltd ($1296) | 6.3x | 7.6x | 6.8x | 6.9x | |
| Leoch International Technology Ltd ($842) | 9.3x | 16.3x | 4.7x | 5.0x | |
| CEC International Holdings Ltd ($759) | 3.9x | 6.1x | 4.1x | 4.9x | 6.0x |
| |
|---|
| Median (25 companies) | 1.6x | 1.8x | 2.3x | 1.4x | 0.8x |
|---|
| Hengxin Technology Ltd ($1085) | -2.0x | -1.5x | -1.9x | -2.9x | -3.9x |
