AVIC International Holdings Ltd EBITDA dropped on 13.5% in 2016 and Revenue decreased on 3.9%
12/03/2017 • About AVIC International Holdings Ltd (
$161) • By InTwits
AVIC International 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: 8.6% in FY2016 vs. 9.6% in FY2015 vs. 8.6% in FY2012
- AVIC International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.5%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: 709 in FY2016, 1,622 in FY2015, 1,631 in FY2014, 1,181 in FY2013, 913 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AVIC International Holdings Ltd ($161) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 31,253 | 37,262 | 33,960 | 34,351 | 33,008 | -3.9% |
| Gross Profit | 3,909 | 5,006 | 5,619 | 5,724 | 5,687 | -0.6% |
| SG&A | 2,934 | 4,112 | 2,919 | 3,302 | 5,204 | 57.6% |
| EBITDA | 2,697 | 3,639 | 3,485 | 3,291 | 2,848 | -13.5% |
| Net Income | 971 | 1,031 | 642 | 1,212 | 806 | -33.5% |
Balance Sheet
|
|---|
| Cash | 4,038 | 5,076 | 4,834 | 11,781 | 9,020 | -23.4% |
| Short Term Debt | 11,318 | 13,205 | 9,429 | 8,772 | 9,320 | 6.2% |
| Long Term Debt | 4,045 | 6,835 | 10,477 | 10,221 | 8,905 | -12.9% |
Cash flow
|
|---|
| Capex | 1,866 | 2,164 | 2,611 | 3,638 | 4,038 | 11.0% |
Ratios
|
|---|
| Revenue growth | 12.3% | 19.2% | -8.9% | 1.1% | -3.9% | |
| EBITDA growth | 10.8% | 34.9% | -4.2% | -5.6% | -13.5% | |
| Gross Margin | 12.5% | 13.4% | 16.5% | 16.7% | 17.2% | 0.6% |
| EBITDA Margin | 8.6% | 9.8% | 10.3% | 9.6% | 8.6% | -1.0% |
| Net Income Margin | 3.1% | 2.8% | 1.9% | 3.5% | 2.4% | -1.1% |
| SG&A, % of revenue | 9.4% | 11.0% | 8.6% | 9.6% | 15.8% | 6.2% |
| CAPEX, % of revenue | 6.0% | 5.8% | 7.7% | 10.6% | 12.2% | 1.6% |
| ROIC | 6.4% | 6.5% | 4.5% | 2.9% | 2.2% | -0.7% |
| ROE | 13.7% | 15.2% | 10.0% | 15.5% | 8.9% | -6.6% |
| Net Debt/EBITDA | 4.2x | 4.1x | 4.3x | 2.2x | 3.2x | 1.0x |
Revenue and profitability
The company's Revenue decreased on 3.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 34.9% to 37.2% in 2016.
Gross Margin increased slightly on 0.57 pp from 16.7% to 17.2% in FY2016. SG&A as a % of Revenue increased on 6.2 pp from 9.6% to 15.8% in FY2016.
Net Income marign decreased slightly on 1.1 pp from 3.5% to 2.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 AVIC International Holdings Ltd had CAPEX/Revenue of 12.2%. CAPEX/Revenue increased on 6.4 pp from 5.8% in FY2013 to 12.2% in FY2016. For the last three years the average CAPEX/Revenue was 10.2%.AVIC International Holdings Ltd has spent a lot to CAPEX (142% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (2.18%) and ROE (8.95%). ROIC decreased slightly on 0.68 pp from 2.9% to 2.2% in FY2016. ROE decreased on 6.6 pp from 15.5% to 8.9% in FY2016.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and 6.4x Debt / EBITDA. Net Debt / EBITDA surged on 1.0x from 2.2x to 3.2x in FY2016. Debt decreased on 4.0% while cash dropped on 23.4%.
Appendix 1: Peers in Electronics
Below you can find AVIC International Holdings 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% | 7.2% | -1.2% | -0.9% |
|---|
| AVIC International Holdings Ltd ($161) | | 19.2% | -8.9% | 1.1% | -3.9% |
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% |
| Hi Sun Technology China Ltd ($818) | 28.1% | 37.4% | 33.3% | 34.7% | 30.8% |
| Datronix Holdings Ltd ($889) | 32.9% | 32.0% | 34.1% | 34.6% | |
| |
|---|
| Median (48 companies) | 14.1% | 13.8% | 13.9% | 14.0% | 14.1% |
|---|
| AVIC International Holdings Ltd ($161) | 12.5% | 13.4% | 16.5% | 16.7% | 17.2% |
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) | 6.5% | 6.0% | 4.6% | 4.6% | 0.7% |
|---|
| AVIC International Holdings Ltd ($161) | 8.6% | 9.8% | 10.3% | 9.6% | 8.6% |
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% | 3.7% | 2.9% | 2.1% |
|---|
| AVIC International Holdings Ltd ($161) | 6.0% | 5.8% | 7.7% | 10.6% | 12.2% |
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) | 4.3% | 3.5% | 3.0% | 1.9% | 0.2% |
|---|
| AVIC International Holdings Ltd ($161) | 6.4% | 6.5% | 4.5% | 2.9% | 2.2% |
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 | 0.8x | 0.2x | 0.7x |
|---|
| AVIC International Holdings Ltd ($161) | 4.2x | 4.1x | 4.3x | 2.2x | 3.2x |
