Haitong International Securities Group Ltd Net Debt / EBITDA jumped on 5.9x from 3.9x to 9.8x in 2016 while Revenue decreased on 7.9%
09/03/2017 • About Haitong International Securities Group Ltd (
$665) • By InTwits
Haitong International Securities Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has potentially unprofitable business model: ROIC is at 2.8%
- It operates with high leverage: Net Debt/EBITDA is 9.8x while industry average is 2.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Haitong International Securities Group Ltd ($665) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,179 | 1,650 | 2,700 | 5,815 | 5,358 | -7.9% |
| EBITDA | 411 | 753 | 1,616 | 4,152 | 3,508 | -15.5% |
| Net Income | 293 | 529 | 1,018 | 2,510 | 1,680 | -33.1% |
Balance Sheet
|
|---|
| Cash | 5,560 | 12,542 | 14,905 | 24,671 | 27,358 | 10.9% |
| Short Term Debt | 4,362 | 9,122 | 14,257 | 30,339 | 47,908 | 57.9% |
| Long Term Debt | 0 | 1,393 | 6,362 | 10,459 | 13,776 | 31.7% |
Cash flow
|
|---|
| Capex | 13 | 24 | 20 | 26 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 16.1% | 39.9% | 63.7% | 115.4% | -7.9% | |
| EBITDA growth | 67.8% | 83.2% | 114.5% | 156.9% | -15.5% | |
| EBITDA Margin | 34.9% | 45.7% | 59.9% | 71.4% | 65.5% | -5.9% |
| Net Income Margin | 24.9% | 32.1% | 37.7% | 43.2% | 31.4% | -11.8% |
| CAPEX, % of revenue | 1.1% | 1.5% | 0.7% | 0.4% | | -0.4% |
| ROIC | 5.5% | 5.1% | 5.5% | 6.8% | 2.8% | -3.9% |
| ROE | 9.3% | 12.9% | 15.1% | 17.1% | 7.8% | -9.3% |
| Net Debt/EBITDA | -2.9x | -2.7x | 3.5x | 3.9x | 9.8x | 5.9x |
Revenue and profitability
The company's Revenue decreased on 7.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.9 pp from 71.4% to 65.5% in FY2016.
Net Income marign dropped on 11.8 pp from 43.2% to 31.4% in FY2016.
Return on investment
The company operates at low ROIC (2.84%) and ROE (7.76%). ROIC decreased on 3.9 pp from 6.8% to 2.8% in FY2016. ROE decreased on 9.3 pp from 17.1% to 7.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 9.8x and Debt / EBITDA is 17.6x. Net Debt / EBITDA jumped on 5.9x from 3.9x to 9.8x in FY2016. Debt jumped on 51.2% while cash jumped on 10.9%.
Appendix 1: Peers in Diversified Finan Serv
Below we provide Haitong International Securities Group Ltd benchmarking against other companies in Diversified Finan Serv 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 |
|---|
| 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) | 9.3% | 14.9% | 26.5% | 24.0% | 15.1% |
|---|
| Haitong International Securities Group Ltd ($665) | | 39.9% | 63.7% | 115.4% | -7.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | 73.7% |
| 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% |
|---|
| Haitong International Securities Group Ltd ($665) | 34.9% | 45.7% | 59.9% | 71.4% | 65.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | 1.7% |
|---|
| Haitong International Securities Group Ltd ($665) | 1.1% | 1.5% | 0.7% | 0.4% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong Exchanges and Clearing Ltd ($388) | 29.1% | 20.1% | 21.5% | 29.1% | 19.3% |
| 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% |
| Emperor Capital Group Ltd ($717) | 5.1% | 12.8% | 13.1% | 14.6% | 12.4% |
| Roma Group Ltd ($8072) | 19.6% | 43.7% | 107.8% | 13.3% | 9.8% |
| |
|---|
| Median (69 companies) | 3.9% | 4.0% | 4.8% | 3.5% | 4.2% |
|---|
| Haitong International Securities Group Ltd ($665) | 5.5% | 5.1% | 5.5% | 6.8% | 2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 |
|---|
| Haitong International Securities Group Ltd ($665) | -2.9x | -2.7x | 3.5x | 3.9x | 9.8x |
