ETS Group Ltd Net Income dropped on 47.6% and EBITDA Margin decreased on 3.6 pp from 15.0% to 11.4%
17/03/2017 • About ETS Group Ltd (
$8031) • By InTwits
ETS 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 6.0%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
ETS Group Ltd ($8031) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 164.6 | 169.7 | 176.0 | 143.6 | 146.2 | 1.8% |
| EBITDA | 23.0 | 39.2 | 25.3 | 21.5 | 16.7 | -22.5% |
| Net Income | 14.2 | 25.7 | 14.4 | 9.2 | 4.8 | -47.6% |
Balance Sheet
|
|---|
| Cash | 40.4 | 34.5 | 17.1 | 31.9 | 47.2 | 47.9% |
| Short Term Debt | 13.5 | 7.1 | 3.9 | 1.7 | 6.4 | 272.1% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.4 | |
Cash flow
|
|---|
| Capex | 1.8 | 6.3 | 6.3 | 0.4 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -15.9% | 3.1% | 3.7% | -18.4% | 1.8% | |
| EBITDA growth | -23.9% | 70.5% | -35.6% | -15.0% | -22.5% | |
| EBITDA Margin | 14.0% | 23.1% | 14.4% | 15.0% | 11.4% | -3.6% |
| Net Income Margin | 8.6% | 15.1% | 8.2% | 6.4% | 3.3% | -3.1% |
| CAPEX, % of revenue | 1.1% | 3.7% | 3.6% | 0.3% | | -0.3% |
| ROIC | 21.5% | 31.9% | 14.5% | 12.1% | 6.0% | -6.1% |
| ROE | 24.3% | 29.7% | 14.3% | 8.6% | 4.4% | -4.2% |
| Net Debt/EBITDA | -1.2x | -0.7x | -0.5x | -1.4x | -2.4x | -1.0x |
Revenue and profitability
The company's Revenue increased slightly on 1.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 35.4 pp from 32.6% to 68.0% in FY2016.
Net Income marign decreased on 3.1 pp from 6.4% to 3.3% in FY2016.
Return on investment
The company operates at low ROIC (6.03%) and ROE (4.39%). ROIC decreased on 6.1 pp from 12.1% to 6.0% in FY2016. ROE decreased on 4.2 pp from 8.6% to 4.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 0.4x. Net Debt / EBITDA dropped on 1.0x from -1.4x to -2.4x in FY2016. Debt jumped on 296% while cash surged on 47.9%.
Appendix 1: Peers in Telecommunications
Below you can find ETS Group Ltd benchmarking vs. other companies in Telecommunications 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 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 107.4% | -82.2% | 8,010.0% | |
| Hanny Holdings Ltd ($275) | | 131.2% | -85.2% | 349.3% | -78.5% |
| CCT Fortis Holdings Ltd ($138) | -24.1% | -55.3% | -71.3% | 207.1% | |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | -8.5% | -45.9% | -56.2% | 111.6% | |
| China Trends Holdings Ltd ($8171) | | -70.2% | -16.7% | 106.0% | -22.7% |
| |
|---|
| Median (52 companies) | 5.5% | 9.8% | 9.8% | 8.5% | -2.5% |
|---|
| ETS Group Ltd ($8031) | | 3.1% | 3.7% | -18.4% | 1.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HKBN Ltd ($1310) | | 84.3% | 86.5% | 86.9% | 83.8% |
| Netel Technology Holdings Ltd ($8256) | 27.9% | 42.1% | 54.9% | 72.3% | 73.1% |
| Great World Co Holdings Ltd ($8003) | -11.0% | 43.0% | 45.5% | 67.9% | 42.0% |
| APT Satellite Holdings Ltd ($1045) | 58.7% | 64.1% | 62.5% | 61.0% | |
| Cisco Systems Inc ($4333) | 61.2% | 60.6% | 58.9% | 60.4% | 62.9% |
| |
|---|
| Median (50 companies) | 25.5% | 24.4% | 26.1% | 23.1% | 35.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 86.5% | 85.8% | 81.6% | 82.4% | 81.5% |
| APT Satellite Holdings Ltd ($1045) | 81.0% | 78.9% | 77.5% | 78.8% | |
| Synertone Communication Corp ($1613) | 44.9% | 48.5% | 49.4% | 51.5% | -77.6% |
| HKBN Ltd ($1310) | | 39.2% | 40.1% | 39.0% | 35.2% |
| HKT Trust & HKT Ltd ($6823) | 36.3% | 35.0% | 35.9% | 34.9% | 37.2% |
| |
|---|
| Median (52 companies) | 6.7% | 5.5% | 5.4% | 8.3% | 8.1% |
|---|
| ETS Group Ltd ($8031) | 14.0% | 23.1% | 14.4% | 15.0% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| APT Satellite Holdings Ltd ($1045) | 74.3% | 2.5% | 27.2% | 115.8% | |
| Hong Kong Television Network Ltd ($1137) | 12,435.9% | 504.9% | 1,283.5% | 79.4% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 93.8% | 71.7% | 75.0% | 52.8% | |
| China Fiber Optic Network System Group Ltd ($3777) | 4.8% | 16.3% | 13.1% | 31.9% | |
| Directel Holdings Ltd ($8337) | 2.1% | 0.1% | 0.6% | 30.2% | |
| |
|---|
| Median (52 companies) | 2.3% | 2.9% | 2.9% | 2.6% | 8.4% |
|---|
| ETS Group Ltd ($8031) | 1.1% | 3.7% | 3.6% | 0.3% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telecom Service One Holdings Ltd ($8145) | 95.0% | 5.4% | 26.7% | 39.8% | 37.4% |
| VTech Holdings Ltd ($303) | 37.6% | 39.5% | 40.0% | 39.8% | 37.9% |
| Coolpad Group Ltd ($2369) | 8.1% | 6.0% | 9.6% | 29.1% | |
| Telecom Digital Holdings Ltd ($8336) | | 13.3% | 20.2% | 18.9% | 16.7% |
| SmarTone Telecommunications Holdings Ltd ($315) | 37.2% | 23.1% | 12.8% | 17.7% | 14.5% |
| |
|---|
| Median (53 companies) | 7.1% | 5.8% | 5.8% | 5.4% | 4.9% |
|---|
| ETS Group Ltd ($8031) | 21.5% | 31.9% | 14.5% | 12.1% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CCT Land Holdings Ltd ($261) | 10.1x | 23.8x | 48.4x | 44.8x | |
| China Energine International Holdings Ltd ($1185) | | | 13.3x | 31.7x | |
| China Ground Source Energy Industry Group Ltd ($8128) | -1.6x | 3.5x | 14.3x | 11.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.0x | -1.3x | 12.5x | 7.6x | |
| China All Access Holdings Ltd ($633) | 0.9x | 1.8x | 5.2x | 5.6x | |
| |
|---|
| Median (38 companies) | -0.2x | 0.7x | 1.0x | 0.8x | 1.8x |
|---|
| ETS Group Ltd ($8031) | -1.2x | -0.7x | -0.5x | -1.4x | -2.4x |
