TK Group Holdings Ltd CAPEX dropped on 19.3% while Revenue increased slightly on 1.3%
13/03/2017 • About TK Group Holdings Ltd (
$2283) • By InTwits
TK Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TK Group Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.8%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 4.9 in FY2016, 16.1 in FY2015, 0.32 in FY2014, 0.39 in FY2013, 0.62 in FY2012
- The company has highly profitable business model: ROIC is at 26.0%
- It operates with high leverage: Net Debt/EBITDA is -0.6x while industry average is -3.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TK Group Holdings Ltd ($2283) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,096 | 1,198 | 1,339 | 1,606 | 1,627 | 1.3% |
| Gross Profit | 372 | 332 | 365 | 419 | 456 | 9.0% |
| SG&A | 198 | 186 | 197 | 230 | 268 | 16.6% |
| EBITDA | 234 | 226 | 239 | 276 | 302 | 9.4% |
| Net Income | 135 | 121 | 154 | 187 | 206 | 9.9% |
Balance Sheet
|
|---|
| Cash | 94 | 333 | 267 | 319 | 381 | 19.6% |
| Short Term Debt | 162 | 116 | 85 | 137 | 165 | 20.2% |
| Long Term Debt | 52 | 53 | 47 | 68 | 34 | -49.6% |
Cash flow
|
|---|
| Capex | 146 | 98 | 183 | 123 | 99 | -19.3% |
Ratios
|
|---|
| Revenue growth | 40.2% | 9.3% | 11.8% | 20.0% | 1.3% | |
| EBITDA growth | 35.9% | -3.6% | 5.9% | 15.2% | 9.4% | |
| Gross Margin | 33.9% | 27.7% | 27.3% | 26.1% | 28.1% | 2.0% |
| EBITDA Margin | 21.4% | 18.9% | 17.9% | 17.2% | 18.5% | 1.4% |
| Net Income Margin | 12.3% | 10.1% | 11.5% | 11.6% | 12.6% | 1.0% |
| SG&A, % of revenue | 18.1% | 15.5% | 14.7% | 14.3% | 16.5% | 2.2% |
| CAPEX, % of revenue | 13.3% | 8.1% | 13.7% | 7.6% | 6.1% | -1.6% |
| ROIC | 36.8% | 31.1% | 29.4% | 27.6% | 26.0% | -1.6% |
| ROE | 57.0% | 37.5% | 34.3% | 33.0% | 31.9% | -1.2% |
| Net Debt/EBITDA | 0.5x | -0.7x | -0.6x | -0.4x | -0.6x | -0.2x |
Revenue and profitability
The company's Revenue increased slightly on 1.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 0.18% to 2.2% in FY2016.
Gross Margin increased slightly on 2.0 pp from 26.1% to 28.1% in FY2016. SG&A as a % of Revenue increased on 2.2 pp from 14.3% to 16.5% in FY2016.
Net Income marign increased slightly on 1.00 pp from 11.6% to 12.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 6.1%. CAPEX/Revenue decreased on 2.1 pp from 8.1% in FY2013 to 6.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 9.1%.
Return on investment
The company operates at high and attractive ROIC (26.00%) and ROE (31.88%). ROIC decreased slightly on 1.6 pp from 27.6% to 26.0% in FY2016. ROE decreased slightly on 1.2 pp from 33.0% to 31.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.7x. Net Debt / EBITDA dropped on 0.2x from -0.4x to -0.6x in FY2016. Debt decreased on 2.9% while cash surged on 19.6%.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find TK Group Holdings Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| Karrie International Hldgs ($1050) | | 0.1% | -11.3% | 27.4% | 11.8% |
| Sunny Optical Technology Group Co Ltd ($2382) | | 45.9% | 45.0% | 26.9% | 36.6% |
| AMCO United Holding Ltd ($2970) | | 10.8% | 53.9% | 16.8% | 31.1% |
| Yusei Holdings Ltd ($96) | 18.4% | -9.3% | 6.7% | 15.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 1.5% | 22.2% | 43.2% | 11.7% | |
| |
|---|
| Median (25 companies) | -7.3% | -0.7% | 6.7% | -5.6% | 11.8% |
|---|
| TK Group Holdings Ltd ($2283) | | 9.3% | 11.8% | 20.0% | 1.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Man Sang International Ltd ($938) | 42.4% | 32.8% | 60.3% | 78.6% | 56.4% |
| Time Watch Investments Ltd ($2033) | 60.2% | 60.6% | 65.0% | 68.1% | 68.5% |
| China Environmental Energy Investment Ltd ($986) | 14.0% | 1.2% | 9.0% | 49.2% | 40.4% |
| Lee & Man Chemical Co Ltd ($746) | 34.3% | 35.7% | 41.9% | 39.6% | 36.3% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 33.2% | 35.1% | 37.4% | 38.7% | |
| |
|---|
| Median (24 companies) | 19.7% | 19.7% | 23.4% | 22.4% | 18.3% |
|---|
| TK Group Holdings Ltd ($2283) | 33.9% | 27.7% | 27.3% | 26.1% | 28.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 30.4% | 31.3% | 38.4% | 37.6% | 37.0% |
| Man Sang International Ltd ($938) | 24.9% | 15.4% | 37.0% | 33.8% | 40.4% |
| IPE Group Ltd ($929) | 25.6% | 22.5% | 29.5% | 29.1% | |
| DeTeam Co Ltd ($65) | 8.0% | 3.9% | -1.3% | 24.3% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 18.4% | 19.8% | 20.6% | 24.2% | |
| |
|---|
| Median (25 companies) | 7.9% | 7.8% | 7.4% | 6.1% | 6.7% |
|---|
| TK Group Holdings Ltd ($2283) | 21.4% | 18.9% | 17.9% | 17.2% | 18.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Environmental Energy Investment Ltd ($986) | 6.1% | 0.4% | 17.9% | 47.6% | 6.2% |
| DeTeam Co Ltd ($65) | 6.7% | 47.0% | 5.6% | 33.1% | |
| Lee & Man Chemical Co Ltd ($746) | 5.8% | 51.1% | 33.7% | 22.8% | |
| China International Marine Containers Group Co Ltd ($2039) | 3.9% | 12.1% | 18.5% | 21.2% | |
| IPE Group Ltd ($929) | 6.3% | 13.3% | 12.3% | 13.3% | |
| |
|---|
| Median (25 companies) | 4.6% | 4.2% | 3.8% | 4.3% | 3.7% |
|---|
| TK Group Holdings Ltd ($2283) | 13.3% | 8.1% | 13.7% | 7.6% | 6.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Time Watch Investments Ltd ($2033) | 34.5% | 27.1% | 27.8% | 27.9% | 18.6% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 16.9% | 17.7% | 20.0% | 21.1% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 19.7% | 17.8% | 16.5% | 19.4% | 26.8% |
| Yusei Holdings Ltd ($96) | 4.2% | 7.0% | 13.6% | 14.1% | |
| AMCO United Holding Ltd ($2970) | | 10.5% | 11.4% | 11.6% | 9.5% |
| |
|---|
| Median (25 companies) | 3.2% | 3.6% | 3.9% | 1.5% | 9.0% |
|---|
| TK Group Holdings Ltd ($2283) | 36.8% | 31.1% | 29.4% | 27.6% | 26.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Continental Holdings Ltd ($513) | | 20.1x | 92.9x | 4,203.6x | |
| South China China Ltd ($413) | | 37.5x | 2,842.3x | 27.3x | |
| Launch Tech Co Ltd ($2488) | 7.6x | 2.4x | 3.9x | 14.5x | |
| China International Marine Containers Group Co Ltd ($2039) | 4.0x | 4.7x | 5.8x | 9.8x | |
| VS International Group Ltd ($1002) | 5.1x | 6.5x | 4.4x | 3.3x | 4.6x |
| |
|---|
| Median (22 companies) | -0.2x | 0.2x | 0.1x | 0.4x | -0.3x |
|---|
| TK Group Holdings Ltd ($2283) | 0.5x | -0.7x | -0.6x | -0.4x | -0.6x |
