Hi Sun Technology China Ltd reports 238% EBITDA growth in 2016 and 6.8 pp EBITDA Margin growth from 4.8% to 11.6%
08/03/2017 • About Hi Sun Technology China Ltd (
$818) • By InTwits
Hi Sun Technology China Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 11.6% in 2016, 4.8% in 2015, 8.4% in 2014, 1.2% in 2013, -21.4% in 2012
- Hi Sun Technology China Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.1%. At the same time it's a lot of higher than industry average of 12.6%.
- CAPEX is quite volatile: 171 in 2016, 100 in 2015, 49.9 in 2014, 65.5 in 2013, 52.1 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hi Sun Technology China Ltd ($818) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 868 | 1,294 | 1,529 | 1,377 | 1,921 | 39.5% |
| Gross Profit | 244 | 484 | 509 | 478 | 593 | 24.1% |
| SG&A | 440 | 504 | 560 | 490 | 483 | -1.4% |
| EBITDA | -186 | 16 | 128 | 66 | 223 | 237.9% |
| Net Income | -161 | 30 | 397 | 183 | 284 | 54.8% |
Balance Sheet
|
|---|
| Cash | 814 | 1,082 | 1,989 | 2,316 | 2,745 | 18.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 52 | 65 | 50 | 100 | 171 | 70.7% |
Ratios
|
|---|
| Revenue growth | 3.5% | 49.1% | 18.1% | -10.0% | 39.5% | |
| EBITDA growth | -43.4% | -108.7% | 693.7% | -48.4% | 237.9% | |
| Gross Margin | 28.1% | 37.4% | 33.3% | 34.7% | 30.8% | -3.8% |
| EBITDA Margin | -21.4% | 1.2% | 8.4% | 4.8% | 11.6% | 6.8% |
| Net Income Margin | -18.5% | 2.3% | 26.0% | 13.3% | 14.8% | 1.5% |
| SG&A, % of revenue | 50.7% | 39.0% | 36.6% | 35.6% | 25.2% | -10.5% |
| CAPEX, % of revenue | 6.0% | 5.1% | 3.3% | 7.3% | 8.9% | 1.6% |
| ROIC | -8.1% | -1.1% | 2.1% | 0.0% | 3.4% | 3.4% |
| ROE | -5.9% | 1.1% | 13.3% | 5.6% | 8.3% | 2.7% |
| Net Debt/EBITDA | | -67.0x | -15.5x | -35.0x | -12.3x | 22.7x |
Revenue and profitability
Hi Sun Technology China Ltd's Revenue surged on 39.5%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.8 pp from 4.8% to 11.6% in 2016.
Gross Margin decreased on 3.8 pp from 34.7% to 30.8% in 2016. SG&A as a % of Revenue dropped on 10.5 pp from 35.6% to 25.2% in 2016.
Net Income marign increased slightly on 1.5 pp from 13.3% to 14.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.9% in 2016. The company's CAPEX/Revenue increased on 3.8 pp from 5.1% in 2013 to 8.9% in 2016. It's average CAPEX/Revenue for the last three years was 6.5%.Hi Sun Technology China Ltd invested a big chunk of EBITDA (76.5%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (3.37%) and ROE (8.30%). ROIC increased on 3.4 pp from 0.010% to 3.4% in 2016. ROE increased on 2.7 pp from 5.6% to 8.3% in 2016.
Leverage (Debt)
The company has no debt. Cash jumped on 18.5%.
Appendix 1: Peers in Electronics
Below you can find Hi Sun Technology China 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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) | 7.4% | 3.6% | 5.0% | 0.4% | -1.5% |
|---|
| Hi Sun Technology China Ltd ($818) | | 49.1% | 18.1% | -10.0% | 39.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 54.0% | 58.1% | 49.5% | 49.6% | |
| AAC Technologies Holdings Inc ($2018) | 44.2% | 42.7% | 41.4% | 41.5% | |
| TeleEye Holdings Ltd ($8051) | 44.0% | 42.1% | 38.5% | 37.0% | 40.9% |
| Datronix Holdings Ltd ($889) | 32.9% | 32.0% | 34.1% | 34.6% | |
| China Automation Group Ltd ($569) | 39.1% | 35.9% | 32.4% | 30.3% | |
| |
|---|
| Median (48 companies) | 13.6% | 13.8% | 13.9% | 14.0% | 13.4% |
|---|
| Hi Sun Technology China Ltd ($818) | 28.1% | 37.4% | 33.3% | 34.7% | 30.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.8% | 35.8% | 34.9% | 34.8% | |
| GCL New Energy Holdings Ltd ($451) | 10.8% | 11.1% | 12.6% | 33.0% | |
| Daiwa Associate Holdings ($1037) | 2.4% | 3.8% | 2.8% | 25.6% | -53.6% |
| Wasion Group Holdings Ltd ($3393) | 18.8% | 21.2% | 22.0% | 19.3% | |
| Tongda Group Holdings Ltd ($698) | 17.1% | 16.8% | 18.4% | 18.9% | |
| |
|---|
| Median (50 companies) | 7.4% | 7.6% | 4.6% | 4.9% | -3.4% |
|---|
| Hi Sun Technology China Ltd ($818) | -21.4% | 1.2% | 8.4% | 4.8% | 11.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| GCL New Energy Holdings Ltd ($451) | 5.5% | 5.1% | 5.4% | 401.2% | |
| National Electronic Hldgs ($213) | 3.4% | 18.1% | 7.1% | 49.7% | 4.7% |
| Irico Group Electronics Co Ltd ($438) | 39.9% | 30.4% | 17.4% | 25.8% | |
| Kingwell Group Ltd ($1195) | 8.6% | 5.4% | 5.3% | 21.4% | 0.0% |
| AAC Technologies Holdings Inc ($2018) | 18.7% | 8.7% | 19.6% | 18.4% | |
| |
|---|
| Median (50 companies) | 3.7% | 3.0% | 4.2% | 2.9% | 1.9% |
|---|
| Hi Sun Technology China Ltd ($818) | 6.0% | 5.1% | 3.3% | 7.3% | 8.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AAC Technologies Holdings Inc ($2018) | 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) | 29.6% | 17.7% | 15.1% | 16.7% | |
| Tongda Group Holdings Ltd ($698) | 15.2% | 13.5% | 16.5% | 16.3% | |
| Alltronics Holdings Ltd ($833) | 13.1% | 15.2% | 19.8% | 15.6% | |
| |
|---|
| Median (50 companies) | 4.6% | 4.1% | 3.7% | 2.4% | -6.9% |
|---|
| Hi Sun Technology China Ltd ($818) | -8.1% | -1.1% | 2.1% | 0.0% | 3.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| National Electronic Hldgs ($213) | 16.3x | 30.2x | 84.8x | 19.9x | 42.7x |
| GCL New Energy Holdings Ltd ($451) | 2.9x | 2.6x | 1.7x | 17.4x | |
| Man Yue Technology Holdings Ltd ($894) | 2.1x | 2.7x | 3.3x | 6.5x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.2x | 2.6x | 5.7x | 5.4x | 14.1x |
| SAS Dragon Hldg Ltd ($1184) | 7.1x | 2.0x | 6.4x | 4.8x | |
| |
|---|
| Median (32 companies) | 1.0x | 1.1x | 1.0x | 0.4x | 0.7x |
|---|
| Hi Sun Technology China Ltd ($818) | | -67.0x | -15.5x | -35.0x | -12.3x |
