Far East Global Group Ltd Debt jumped on 32.5% while EBITDA dropped on 24.4%
16/03/2017 • About Far East Global Group Ltd (
$830) • By InTwits
Far East Global Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Far East Global Group Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -2.0% for the sames years0
- The company has potentially unprofitable business model: ROIC is at 2.3%
- It operates with high leverage: Net Debt/EBITDA is 3.7x while industry average is -8.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Far East Global Group Ltd ($830) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,296 | 1,419 | 1,682 | 2,195 | 2,647 | 20.6% |
| Gross Profit | 77 | 8 | 175 | 212 | 190 | -10.4% |
| SG&A | | 21 | 18 | 175 | 161 | -8.0% |
| EBITDA | -144 | -129 | -1 | 50 | 38 | -24.4% |
| Net Income | -136 | 50 | 58 | 71 | 88 | 23.7% |
Balance Sheet
|
|---|
| Cash | 340 | 310 | 242 | 200 | 387 | 93.0% |
| Short Term Debt | 25 | 159 | 121 | 181 | 324 | 78.5% |
| Long Term Debt | 32 | 630 | 219 | 215 | 202 | -6.2% |
Cash flow
|
|---|
| Capex | 60 | 19 | 12 | 6 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 52.9% | 9.5% | 18.6% | 30.5% | 20.6% | |
| EBITDA growth | -246.8% | -10.5% | -99.5% | -7,636.0% | -24.4% | |
| Gross Margin | 6.0% | 0.6% | 10.4% | 9.6% | 7.2% | -2.5% |
| EBITDA Margin | -11.1% | -9.1% | -0.0% | 2.3% | 1.4% | -0.8% |
| Net Income Margin | -10.5% | 3.6% | 3.4% | 3.3% | 3.3% | 0.1% |
| SG&A, % of revenue | | 1.5% | 1.0% | 8.0% | 6.1% | -1.9% |
| CAPEX, % of revenue | 4.6% | 1.3% | 0.7% | 0.3% | | -0.3% |
| ROIC | -16.4% | -10.2% | -1.5% | 3.2% | 2.3% | -0.9% |
| ROE | -16.3% | 4.5% | 5.0% | 6.1% | 8.4% | 2.3% |
| Net Debt/EBITDA | | | | 4.0x | 3.7x | -0.3x |
Revenue and profitability
Far East Global Group Ltd's Revenue surged on 20.6%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.84 pp from 2.3% to 1.4% in FY2016.
Gross Margin decreased on 2.5 pp from 9.6% to 7.2% in FY2016. SG&A as a % of Revenue decreased slightly on 1.9 pp from 8.0% to 6.1% in FY2016.
Net Income marign showed almost no change in FY2016.
Return on investment
The company operates at low ROIC (2.32%) and ROE (8.41%). ROIC decreased slightly on 0.85 pp from 3.2% to 2.3% in FY2016. ROE increased on 2.3 pp from 6.1% to 8.4% in FY2016.
Leverage (Debt)
Debt level is 3.7x Net Debt / EBITDA and 14.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 4.0x to 3.7x in FY2016. Debt jumped on 32.5% while cash jumped on 93.0%.
Appendix 1: Peers in Building Materials
Below we provide Far East Global Group Ltd benchmarking against other companies in Building Materials 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 |
|---|
| Pacific Plywood Hldg Ltd ($767) | | -14.5% | 119.5% | 57.3% | 441.9% |
| WLS Holdings Ltd/Hong Kong ($8021) | | 9.4% | -11.1% | 22.0% | 13.8% |
| China Wood Optimization Holding Ltd ($8099) | 68.7% | 77.9% | 6.5% | 18.9% | |
| Steed Oriental Holdings Co Ltd ($8277) | | -4.2% | 11.0% | 9.4% | -21.5% |
| Dongpeng Holdings Co Ltd ($3386) | 26.2% | 34.8% | 15.6% | 5.6% | |
| |
|---|
| Median (25 companies) | -4.2% | 9.7% | 6.5% | -14.4% | 9.5% |
|---|
| Far East Global Group Ltd ($830) | | 9.5% | 18.6% | 30.5% | 20.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 91.4% | 82.0% | 97.2% | 98.6% | 99.9% |
| Sustainable Forest Holdings Ltd ($723) | -2.4% | 12.1% | 19.7% | 55.2% | 83.9% |
| Dongpeng Holdings Co Ltd ($3386) | 35.6% | 37.1% | 38.5% | 39.1% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 37.2% | 36.9% | 37.0% | 36.4% | |
| Anhui Conch Cement Co Ltd ($914) | 27.3% | 32.5% | 33.2% | 26.9% | |
| |
|---|
| Median (25 companies) | 20.6% | 22.1% | 20.9% | 15.4% | 22.4% |
|---|
| Far East Global Group Ltd ($830) | 6.0% | 0.6% | 10.4% | 9.6% | 7.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 12.6% | -19.8% | 50.5% | 34.7% | 67.6% |
| China Tianrui Group Cement Co Ltd ($1252) | 28.5% | 23.7% | 26.7% | 32.8% | |
| Anhui Conch Cement Co Ltd ($914) | 27.1% | 31.1% | 32.1% | 29.7% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 30.4% | 29.9% | 23.8% | 26.2% | |
| Dongpeng Holdings Co Ltd ($3386) | 14.3% | 21.5% | 22.6% | 24.4% | |
| |
|---|
| Median (25 companies) | 15.8% | 16.6% | 18.2% | 14.0% | 9.2% |
|---|
| Far East Global Group Ltd ($830) | -11.1% | -9.1% | -0.0% | 2.3% | 1.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Wood Optimization Holding Ltd ($8099) | 10.9% | 9.6% | 1.8% | 19.3% | |
| China Shanshui Cement Group Ltd ($691) | 18.9% | 21.1% | 12.1% | 14.3% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 0.6% | 0.5% | 4.1% | 14.2% | |
| China Glass Holdings Ltd ($3300) | 19.6% | 12.5% | 12.4% | 13.5% | |
| WLS Holdings Ltd/Hong Kong ($8021) | 6.0% | 6.6% | 7.9% | 11.5% | 1.5% |
| |
|---|
| Median (25 companies) | 9.8% | 9.1% | 7.5% | 6.6% | 1.3% |
|---|
| Far East Global Group Ltd ($830) | 4.6% | 1.3% | 0.7% | 0.3% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dongpeng Holdings Co Ltd ($3386) | 37.1% | 35.8% | 27.2% | 26.6% | |
| China Wood Optimization Holding Ltd ($8099) | 33.5% | 27.3% | 17.7% | 17.7% | |
| China Lesso Group Holdings Ltd ($2128) | 20.5% | 19.4% | 18.2% | 17.2% | 16.5% |
| Anhui Conch Cement Co Ltd ($914) | 12.7% | 17.5% | 18.4% | 11.7% | |
| Hong Wei Asia Holdings Co Ltd ($8191) | 17.0% | 5.2% | 9.3% | 8.6% | |
| |
|---|
| Median (25 companies) | 6.6% | 6.9% | 5.7% | 1.2% | 2.6% |
|---|
| Far East Global Group Ltd ($830) | -16.4% | -10.2% | -1.5% | 3.2% | 2.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Tianrui Group Cement Co Ltd ($1252) | 4.2x | 5.1x | 5.2x | 7.9x | |
| BBMG Corp ($2009) | 4.6x | 5.0x | 6.1x | 6.6x | |
| Asia Cement China Holdings Corp ($743) | 3.2x | 2.7x | 2.8x | 5.1x | |
| West China Cement Ltd ($2233) | 3.3x | 2.9x | 3.6x | 4.2x | 1.5x |
| China Singyes Solar Technologies Holdings Ltd ($750) | 0.9x | 0.8x | 1.8x | 4.0x | |
| |
|---|
| Median (15 companies) | 2.3x | 1.1x | 1.9x | 3.3x | 0.3x |
|---|
| Far East Global Group Ltd ($830) | | | | 4.0x | 3.7x |
