Dah Chong Hong Holdings Ltd Debt jumped on 13.3% in 2016 and Net Debt / EBITDA surged on 0.5x from 3.3x to 3.8x
28/02/2017 • About Dah Chong Hong Holdings Ltd (
$1828) • By InTwits
Dah Chong Hong Holdings 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: 3.5% in FY2016 vs. 3.8% in FY2015 vs. 4.7% in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.3%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dah Chong Hong Holdings Ltd ($1828) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 48,014 | 42,261 | 46,489 | 44,803 | 46,462 | 3.7% |
| Gross Profit | 5,603 | 4,872 | 5,257 | 5,238 | 5,461 | 4.3% |
| SG&A | 4,491 | 4,242 | 4,763 | 4,899 | 5,521 | 12.7% |
| EBITDA | 2,242 | 1,964 | 1,955 | 1,692 | 1,634 | -3.4% |
| Net Income | 1,045 | 901 | 750 | 570 | 511 | -10.4% |
Balance Sheet
|
|---|
| Cash | 2,966 | 1,920 | 1,243 | 985 | 1,160 | 17.8% |
| Short Term Debt | 3,471 | 5,608 | 5,402 | 2,455 | 2,357 | -4.0% |
| Long Term Debt | 2,938 | 1,816 | 3,259 | 4,095 | 5,067 | 23.7% |
Cash flow
|
|---|
| Capex | 1,096 | 1,054 | 933 | 657 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 4.1% | -12.0% | 10.0% | -3.6% | 3.7% | |
| EBITDA growth | 2.0% | -12.4% | -0.5% | -13.5% | -3.4% | |
| Gross Margin | 11.7% | 11.5% | 11.3% | 11.7% | 11.8% | 0.1% |
| EBITDA Margin | 4.7% | 4.6% | 4.2% | 3.8% | 3.5% | -0.3% |
| Net Income Margin | 2.2% | 2.1% | 1.6% | 1.3% | 1.1% | -0.2% |
| SG&A, % of revenue | 9.4% | 10.0% | 10.2% | 10.9% | 11.9% | 0.9% |
| CAPEX, % of revenue | 2.3% | 2.5% | 2.0% | 1.5% | | -1.5% |
| ROIC | 11.4% | 8.5% | 7.7% | 6.2% | 6.3% | 0.1% |
| ROE | 12.7% | 10.3% | 8.2% | 6.2% | 5.7% | -0.5% |
| Net Debt/EBITDA | 1.5x | 2.8x | 3.8x | 3.3x | 3.8x | 0.5x |
Revenue and profitability
Dah Chong Hong Holdings Ltd's Revenue increased on 3.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 6.7% to 7.8% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.95 pp from 10.9% to 11.9% in FY2016.
Net Income marign showed almost no change in FY2016.
Return on investment
The company operates at low ROIC (6.29%) and ROE (5.75%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.8x and Debt / EBITDA is 4.5x. Net Debt / EBITDA surged on 0.5x from 3.3x to 3.8x in FY2016. Debt jumped on 13.3% while cash surged on 17.8%.
Appendix 1: Peers in Auto Manufacturers
Below we provide Dah Chong Hong Holdings Ltd benchmarking against other companies in Auto Manufacturers 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 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | -95.4% | 511.9% | 123.0% | 52.3% | |
| Byd Co Ltd ($1211) | -4.2% | 16.4% | 7.2% | 40.2% | |
| Geely Automobile Holdings Ltd ($175) | 17.5% | 16.6% | -24.3% | 38.6% | |
| Guangzhou Automobile Group Co Ltd ($2238) | 18.0% | 45.2% | 18.9% | 31.4% | |
| Great Wall Motor Co Ltd ($2333) | 43.1% | 31.7% | 10.2% | 21.3% | |
| |
|---|
| Median (9 companies) | -4.2% | 16.4% | 7.2% | 21.3% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | | -12.0% | 10.0% | -3.6% | 3.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 24.1% | 25.9% | 25.0% | 22.3% | |
| Qingling Motors Co Ltd ($1122) | 12.3% | 15.2% | 15.1% | 18.7% | |
| Geely Automobile Holdings Ltd ($175) | 18.5% | 20.1% | 18.2% | 18.2% | |
| Sinotruk Hong Kong Ltd ($3808) | 14.9% | 16.7% | 16.9% | 17.8% | |
| Byd Co Ltd ($1211) | 11.6% | 13.4% | 13.8% | 15.3% | |
| |
|---|
| Median (9 companies) | 11.8% | 13.4% | 13.8% | 15.3% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 11.7% | 11.5% | 11.3% | 11.7% | 11.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 18.0% | 19.5% | 17.8% | 15.5% | |
| Geely Automobile Holdings Ltd ($175) | 14.6% | 15.8% | 15.9% | 14.4% | |
| Byd Co Ltd ($1211) | 10.2% | 9.6% | 12.0% | 14.2% | |
| Qingling Motors Co Ltd ($1122) | 10.3% | 12.8% | 11.4% | 12.2% | |
| Sinotruk Hong Kong Ltd ($3808) | 6.6% | 7.4% | 7.8% | 7.5% | |
| |
|---|
| Median (9 companies) | 6.6% | 7.4% | 7.8% | 7.5% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 4.7% | 4.6% | 4.2% | 3.8% | 3.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 22.7% | 10.1% | 15.7% | 14.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 8.9% | 10.1% | 13.4% | 12.5% | |
| Great Wall Motor Co Ltd ($2333) | 10.7% | 13.0% | 12.0% | 8.0% | |
| Byd Co Ltd ($1211) | 13.0% | 11.2% | 4.2% | 5.7% | |
| Geely Automobile Holdings Ltd ($175) | 4.5% | 3.9% | 5.0% | 5.3% | |
| |
|---|
| Median (9 companies) | 6.4% | 3.9% | 4.2% | 5.3% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 2.3% | 2.5% | 2.0% | 1.5% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Wall Motor Co Ltd ($2333) | 27.7% | 32.2% | 25.5% | 22.5% | |
| Geely Automobile Holdings Ltd ($175) | 16.2% | 19.6% | 13.4% | 15.0% | |
| Wuling Motors Holdings Ltd ($305) | 7.2% | 7.7% | 10.0% | 11.8% | |
| Byd Co Ltd ($1211) | 2.7% | 2.5% | 3.9% | 8.5% | |
| Qingling Motors Co Ltd ($1122) | 4.5% | 5.7% | 5.1% | 5.8% | |
| |
|---|
| Median (9 companies) | 2.7% | 3.5% | 3.9% | 5.8% | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 11.4% | 8.5% | 7.7% | 6.2% | 6.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Byd Co Ltd ($1211) | 3.4x | 6.7x | 3.9x | 2.9x | |
| Sinotruk Hong Kong Ltd ($3808) | 3.8x | 2.6x | 0.3x | 0.3x | |
| Great Wall Motor Co Ltd ($2333) | -0.2x | -0.1x | 0.1x | 0.3x | |
| Guangzhou Automobile Group Co Ltd ($2238) | | | 13.2x | 0.3x | |
| Wuling Motors Holdings Ltd ($305) | 2.0x | 1.9x | 0.8x | -0.6x | |
| |
|---|
| Median (8 companies) | 2.0x | 0.9x | 0.6x | -0.2x | |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 2.8x | 3.8x | 3.3x | 3.8x |
