Kingdee International Software Group Co Ltd reports 250% CAPEX growth in 2016 and 17.4% Revenue growth
15/03/2017 • About Kingdee International Software Group Co Ltd (
$268) • By InTwits
Kingdee International Software Group Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 31.3% in FY2016, 31.9% in FY2015, 37.2% in FY2014, 33.2% in FY2013, 7.8% in FY2012
- Kingdee International Software Group Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.4%. At the same time it's a lot of higher than industry average of 5.9%.
- CAPEX is quite volatile: 154 in FY2016, 44.0 in FY2015, 69.8 in FY2014, 139 in FY2013, 315 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.8%
- It operates with high leverage: Net Debt/EBITDA is -1.0x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kingdee International Software Group Co Ltd ($268) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,765 | 1,602 | 1,547 | 1,586 | 1,862 | 17.4% |
| Gross Profit | 1,147 | 1,206 | 1,276 | 1,292 | 1,514 | 17.2% |
| SG&A | 1,370 | 1,034 | 990 | 1,175 | 1,307 | 11.2% |
| EBITDA | 137 | 532 | 575 | 506 | 582 | 15.1% |
| Net Income | -140 | 126 | 197 | 106 | 288 | 172.5% |
Balance Sheet
|
|---|
| Cash | 913 | 999 | 1,521 | 2,071 | 2,084 | 0.6% |
| Short Term Debt | 227 | 420 | 546 | 244 | 81 | -66.9% |
| Long Term Debt | 1,364 | 1,155 | 1,291 | 1,213 | 1,416 | 16.7% |
Cash flow
|
|---|
| Capex | 315 | 139 | 70 | 44 | 154 | 249.9% |
Ratios
|
|---|
| Revenue growth | -12.7% | -9.3% | -3.5% | 2.6% | 17.4% | |
| EBITDA growth | -65.2% | 288.8% | 8.1% | -12.1% | 15.1% | |
| Gross Margin | 65.0% | 75.3% | 82.5% | 81.5% | 81.3% | -0.1% |
| EBITDA Margin | 7.8% | 33.2% | 37.2% | 31.9% | 31.3% | -0.6% |
| Net Income Margin | -7.9% | 7.9% | 12.7% | 6.7% | 15.5% | 8.8% |
| SG&A, % of revenue | 77.6% | 64.5% | 64.0% | 74.1% | 70.2% | -3.9% |
| CAPEX, % of revenue | 17.9% | 8.7% | 4.5% | 2.8% | 8.3% | 5.5% |
| ROIC | -3.6% | 7.0% | 8.0% | 5.1% | 4.8% | -0.4% |
| ROE | -8.8% | 7.6% | 10.5% | 4.1% | 8.6% | 4.5% |
| Net Debt/EBITDA | 5.0x | 1.1x | 0.5x | -1.2x | -1.0x | 0.2x |
Revenue and profitability
The company's Revenue jumped on 17.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.5 pp from 11.9% to 7.4% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 3.9 pp from 74.1% to 70.2% in FY2016.
Net Income marign increased on 8.8 pp from 6.7% to 15.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Kingdee International Software Group Co Ltd had CAPEX/Revenue of 8.3%. Kingdee International Software Group Co Ltd showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 5.2%.
Return on investment
The company operates at low ROIC (4.80%) and ROE (8.61%). ROIC showed almost no change in FY2016. ROE increased on 4.5 pp from 4.1% to 8.6% in FY2016.
Leverage (Debt)
Debt level is -1.0x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from -1.2x to -1.0x in FY2016. Debt increased on 2.7% while cash increased slightly on 0.61%.
Appendix 1: Peers in Software
Below we provide Kingdee International Software Group Co Ltd benchmarking against other companies in Software 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 |
|---|
| Yunbo Digital Synergy Group Ltd ($8050) | | 241.6% | -31.9% | 348.0% | 99.6% |
| Pizu Group Holdings Ltd ($8053) | | -42.9% | 1,742.9% | 157.9% | 235.2% |
| China Eco-Farming Ltd ($8166) | -23.6% | -7.7% | 21.8% | 155.5% | |
| ICO Group Ltd ($8140) | | -11.1% | -3.1% | 104.9% | 29.8% |
| Aurum Pacific China Group Ltd ($8148) | | | 50.0% | 92.7% | -17.8% |
| |
|---|
| Median (37 companies) | 21.1% | 11.4% | 21.5% | 10.7% | -6.2% |
|---|
| Kingdee International Software Group Co Ltd ($268) | | -9.3% | -3.5% | 2.6% | 17.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Bio Cassava Holdings Ltd ($8129) | 90.4% | 97.4% | 98.4% | 98.3% | |
| Chanjet Information Technology Co Ltd ($1588) | 89.2% | 91.3% | 92.4% | 91.4% | |
| China Binary Sale Technology Ltd ($8255) | 63.5% | 68.5% | 67.7% | 85.9% | |
| Tian Ge Interactive Holdings Ltd ($1980) | 88.5% | 87.6% | 84.8% | 77.7% | |
| Kingsoft Corp Ltd ($3888) | 86.8% | 86.3% | 82.4% | 76.8% | |
| |
|---|
| Median (36 companies) | 40.0% | 38.6% | 39.7% | 41.4% | 36.5% |
|---|
| Kingdee International Software Group Co Ltd ($268) | 65.0% | 75.3% | 82.5% | 81.5% | 81.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| International Entertainment Corp ($1009) | 50.8% | 64.0% | 54.9% | 62.0% | 45.5% |
| Sinosoft Technology Group Ltd ($1297) | 62.6% | 54.9% | 57.2% | 59.0% | |
| China Binary Sale Technology Ltd ($8255) | 35.1% | 35.4% | 44.4% | 50.5% | |
| Boyaa Interactive International Ltd ($434) | 38.5% | 25.8% | 30.7% | 47.6% | |
| TravelSky Technology Ltd ($696) | 38.1% | 35.8% | 31.9% | 41.1% | |
| |
|---|
| Median (37 companies) | 11.1% | 10.9% | 9.1% | 9.1% | 2.4% |
|---|
| Kingdee International Software Group Co Ltd ($268) | 7.8% | 33.2% | 37.2% | 31.9% | 31.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NetDragon Websoft Inc ($777) | 21.1% | 34.6% | 54.6% | 42.9% | |
| China Information Technology Development Ltd ($8178) | 4.1% | 1.1% | 0.5% | 40.7% | |
| Aurum Pacific China Group Ltd ($8148) | | 2.9% | 7.5% | 20.6% | |
| TravelSky Technology Ltd ($696) | 8.9% | 21.7% | 18.1% | 18.1% | |
| Kingsoft Corp Ltd ($3888) | 4.3% | 3.8% | 14.3% | 11.1% | |
| |
|---|
| Median (37 companies) | 1.3% | 1.6% | 3.1% | 2.0% | 0.5% |
|---|
| Kingdee International Software Group Co Ltd ($268) | 17.9% | 8.7% | 4.5% | 2.8% | 8.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pizu Group Holdings Ltd ($8053) | -21.8% | -13.4% | -6.8% | 120.0% | 51.7% |
| ICO Group Ltd ($8140) | | 43.5% | 6.8% | 37.7% | 27.1% |
| IGG Inc ($8002) | | 55.9% | 41.4% | 25.9% | |
| Boyaa Interactive International Ltd ($434) | 75.3% | 21.3% | 20.0% | 21.4% | |
| Sinosoft Technology Group Ltd ($1297) | 34.0% | 21.9% | 20.2% | 20.8% | |
| |
|---|
| Median (37 companies) | 5.6% | 6.1% | 3.9% | 2.2% | 4.1% |
|---|
| Kingdee International Software Group Co Ltd ($268) | -3.6% | 7.0% | 8.0% | 5.1% | 4.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Epicurean and Co Ltd ($8213) | 2.3x | 4.7x | 12.3x | 12.0x | 13.9x |
| Sing Lee Software Group Ltd ($8076) | | | 6.2x | 4.4x | |
| Century Sage Scientific Holdings Ltd ($1450) | 0.2x | 0.0x | -0.2x | 1.8x | |
| Microsoft Corp ($4338) | | | 0.4x | 1.2x | 1.4x |
| Chinasoft International Ltd ($354) | -0.7x | 0.7x | 1.5x | 0.7x | |
| |
|---|
| Median (21 companies) | -1.1x | -1.7x | -1.8x | -1.0x | 0.2x |
|---|
| Kingdee International Software Group Co Ltd ($268) | 5.0x | 1.1x | 0.5x | -1.2x | -1.0x |
