Bank of East Asia Ltd/The Net Income dropped on 32.6% in 2016
17/02/2017 • About Bank of East Asia Ltd/The (
$23) • By InTwits
Bank of East Asia Ltd/The reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank of East Asia Ltd/The has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 5.5%.
- CAPEX is quite volatile: 448 in FY2016, 466 in FY2015, 349 in FY2014, 904 in FY2013, 474 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.1%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is -5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bank of East Asia Ltd/The ($23) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 28,865 | 31,063 | 31,979 | 29,876 | 25,108 | -16.0% |
| Net Income | 6,056 | 6,613 | 6,661 | 5,522 | 3,723 | -32.6% |
Balance Sheet
|
|---|
| Cash | 85,512 | 68,777 | 70,358 | 69,122 | 65,720 | -4.9% |
| Short Term Debt | 30,477 | 27,861 | 32,081 | 31,548 | 26,525 | -15.9% |
| Long Term Debt | 23,061 | 19,433 | 41,022 | 32,060 | 27,762 | -13.4% |
Cash flow
|
|---|
| Capex | 474 | 904 | 349 | 466 | 448 | -3.9% |
Ratios
|
|---|
| Revenue growth | 15.1% | 7.6% | 2.9% | -6.6% | -16.0% | |
| Net Income Margin | 21.0% | 21.3% | 20.8% | 18.5% | 14.8% | -3.7% |
| CAPEX, % of revenue | 1.6% | 2.9% | 1.1% | 1.6% | 1.8% | 0.2% |
| ROIC | 6.0% | 6.2% | 5.6% | 3.7% | 2.1% | -1.6% |
| ROE | 11.6% | 10.9% | 10.0% | 7.5% | 4.1% | -3.4% |
Revenue and profitability
Bank of East Asia Ltd/The's Revenue dropped on 16.0%.
Net Income marign decreased on 3.7 pp from 18.5% to 14.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Bank of East Asia Ltd/The had CAPEX/Revenue of 1.8%. The company's CAPEX/Revenue decreased slightly on 1.1 pp from 2.9% in FY2013 to 1.8% in FY2016. For the last three years the average CAPEX/Revenue was 1.5%.
Return on investment
The company operates at low ROIC (2.12%) and ROE (4.14%). ROIC decreased slightly on 1.6 pp from 3.7% to 2.1% in FY2016. ROE decreased on 3.4 pp from 7.5% to 4.1% in FY2016.
Leverage (Debt)
Debt dropped on 14.7% while cash decreased on 4.9%.
Management team
The company's CEO is Li Kwok Po "David". Li Kwok Po "David" has 37 years tenure at the company.
Appendix 1: Peers in Banks
Below you can find Bank of East Asia Ltd/The benchmarking vs. other companies in Banks 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 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -20.6% | 43.4% | 6.8% | 116.4% | |
| Huishang Bank Corp Ltd ($3698) | 33.9% | 22.8% | 24.3% | 24.6% | |
| Shengjing Bank Co Ltd ($2066) | 36.5% | 36.3% | 40.1% | 24.3% | |
| Bank of Chongqing Co Ltd ($1963) | 38.4% | 26.6% | 28.4% | 18.5% | |
| BOC Hong Kong Holdings Ltd ($2388) | 15.1% | 11.4% | -3.0% | 11.6% | |
| |
|---|
| Median (13 companies) | 16.3% | 12.5% | 24.0% | 7.6% | -6.0% |
|---|
| Bank of East Asia Ltd/The ($23) | | 7.6% | 2.9% | -6.6% | -16.0% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 4.1% | 29.9% | 27.0% | 33.5% | |
| |
|---|
| Median (1 company) | 4.1% | 29.9% | 27.0% | 33.5% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dah Sing Banking Group Ltd ($2356) | 3.9% | 4.1% | 2.2% | 7.5% | |
| Dah Sing Financial Holdings Ltd ($440) | 3.0% | 3.4% | 1.7% | 5.9% | |
| Harbin Bank Co Ltd ($6138) | 19.8% | 9.9% | 6.5% | 5.8% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.0% | 4.3% | 4.8% | 4.4% | |
| Shengjing Bank Co Ltd ($2066) | 1.6% | 2.2% | 5.0% | 3.0% | |
| |
|---|
| Median (13 companies) | 2.8% | 2.9% | 1.8% | 2.8% | 1.0% |
|---|
| Bank of East Asia Ltd/The ($23) | 1.6% | 2.9% | 1.1% | 1.6% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hang Seng Bank Ltd ($11) | 8.6% | 9.5% | 9.0% | 8.3% | |
| BOC Hong Kong Holdings Ltd ($2388) | 5.9% | 6.4% | 5.8% | 6.2% | |
| Dah Sing Financial Holdings Ltd ($440) | 3.8% | 5.1% | 5.2% | 5.9% | |
| Chong Hing Bank Ltd ($1111) | 5.5% | 5.2% | 16.4% | 5.7% | |
| Dah Sing Banking Group Ltd ($2356) | 4.2% | 5.4% | 5.4% | 5.5% | |
| |
|---|
| Median (13 companies) | 6.0% | 6.0% | 5.3% | 4.8% | 0.6% |
|---|
| Bank of East Asia Ltd/The ($23) | 6.0% | 6.2% | 5.6% | 3.7% | 2.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -66.3x | -7.1x | -10.6x | -5.7x | |
| |
|---|
| Median (1 company) | -66.3x | -7.1x | -10.6x | -5.7x | |
|---|
