Global Digital Creations Holdings Ltd Net Income dropped on 665% and Revenue dropped on 19.2%
22/03/2017 • About Global Digital Creations Holdings Ltd (
$8271) • By InTwits
Global Digital Creations Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Global Digital Creations Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.7%
- EBITDA Margin is quite volatile: 24.9% in FY2016, 16.0% in FY2015, 30.5% in FY2014, 15.0% in FY2013, -5.7% in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Global Digital Creations Holdings Ltd ($8271) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 111.0 | 160.7 | 204.4 | 181.7 | 146.8 | -19.2% |
| Gross Profit | 36.1 | 64.3 | 77.6 | 72.9 | 68.4 | -6.1% |
| SG&A | 72.8 | 87.2 | 85.6 | 72.9 | 69.1 | -5.2% |
| EBITDA | -6.3 | 24.0 | 62.4 | 29.0 | 36.5 | 25.7% |
| Net Income | 60.5 | 33.8 | 31.9 | 11.0 | -62.2 | -665.4% |
Balance Sheet
|
|---|
| Cash | 309.2 | 93.4 | 98.0 | 137.3 | 274.5 | 99.9% |
| Short Term Debt | 30.0 | 35.9 | 45.0 | 0.0 | 0.0 | |
| Long Term Debt | 115.0 | 82.1 | 35.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 124.6 | 22.6 | 18.3 | 15.4 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 17.3% | 44.8% | 27.2% | -11.1% | -19.2% | |
| EBITDA growth | -49.1% | -483.0% | 159.6% | -53.5% | 25.7% | |
| Gross Margin | 32.5% | 40.0% | 38.0% | 40.1% | 46.6% | 6.5% |
| EBITDA Margin | -5.7% | 15.0% | 30.5% | 16.0% | 24.9% | 8.9% |
| Net Income Margin | 54.5% | 21.1% | 15.6% | 6.1% | -42.4% | -48.4% |
| SG&A, % of revenue | 65.6% | 54.3% | 41.9% | 40.1% | 47.1% | 6.9% |
| CAPEX, % of revenue | 112.3% | 14.1% | 9.0% | 8.5% | | -8.5% |
| ROIC | -2.4% | 0.4% | 3.6% | 0.7% | 1.7% | 1.0% |
| ROE | 7.0% | 3.6% | 3.3% | 1.1% | -7.0% | -8.2% |
| Net Debt/EBITDA | | 1.0x | -0.3x | -4.7x | -7.5x | -2.8x |
Revenue and profitability
The company's Revenue dropped on 19.2%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.9 pp from 16.0% to 24.9% in FY2016.
Gross Margin increased on 6.5 pp from 40.1% to 46.6% in FY2016. SG&A as a % of Revenue increased on 6.9 pp from 40.1% to 47.1% in FY2016.
Net Income marign dropped on 48.4 pp from 6.1% to -42.4% in FY2016.
Return on investment
The company operates at low but positive ROIC (1.68%) and negative ROE (-7.02%). ROIC increased slightly on 0.99 pp from 0.69% to 1.7% in FY2016. ROE decreased on 8.2 pp from 1.1% to -7.0% in FY2016.
Leverage (Debt)
The company has no debt. Cash surged on 99.9%.
Appendix 1: Peers in Entertainment
Below we provide Global Digital Creations Holdings Ltd benchmarking against other companies in Entertainment 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 |
|---|
| Neo Telemedia Ltd ($8167) | 268.8% | -60.2% | -13.4% | 5,442.4% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | -57.9% | 181.2% | -20.1% | 162.4% | |
| Alibaba Pictures Group Ltd ($1060) | 169.4% | -45.8% | -63.8% | 108.3% | |
| SMI Holdings Group Ltd ($198) | 16.4% | 65.4% | 16.4% | 77.2% | |
| Universe International Holdings Ltd ($1046) | | 4.3% | 159.4% | 46.3% | -97.5% |
| |
|---|
| Median (27 companies) | 3.0% | 10.4% | 1.1% | -4.3% | 5.5% |
|---|
| Global Digital Creations Holdings Ltd ($8271) | | 44.8% | 27.2% | -11.1% | -19.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amax International Holdings Ltd ($959) | | 92.1% | 98.6% | 96.6% | 70.6% |
| China Vanguard Group Ltd ($8156) | 63.8% | 88.2% | 93.8% | 95.2% | 91.0% |
| Universe International Holdings Ltd ($1046) | 22.1% | 36.7% | 11.4% | 84.8% | -635.1% |
| Cheung Wo International Holdings Ltd ($9) | -17.5% | 71.4% | 77.7% | 77.8% | |
| REXLot Holdings Ltd ($555) | 70.2% | 73.1% | 73.4% | 67.4% | |
| |
|---|
| Median (23 companies) | 44.8% | 52.7% | 44.3% | 44.3% | 30.9% |
|---|
| Global Digital Creations Holdings Ltd ($8271) | 32.5% | 40.0% | 38.0% | 40.1% | 46.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Neptune Group Ltd ($70) | 98.6% | 98.6% | 86.6% | 99.0% | 76.3% |
| Universe International Holdings Ltd ($1046) | 36.6% | 44.6% | 74.6% | 73.6% | -1,418.4% |
| Haichang Holdings Ltd ($2255) | 55.0% | 44.5% | 46.3% | 56.6% | |
| REXLot Holdings Ltd ($555) | 53.7% | 55.1% | 6.1% | 40.5% | |
| SMI Holdings Group Ltd ($198) | 19.2% | 35.4% | 34.5% | 31.2% | |
| |
|---|
| Median (27 companies) | 24.0% | 20.3% | 17.0% | -1.7% | -14.4% |
|---|
| Global Digital Creations Holdings Ltd ($8271) | -5.7% | 15.0% | 30.5% | 16.0% | 24.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Star Cultural Media Group Ltd ($8172) | 8.9% | 0.0% | 0.0% | 848.3% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | 1,237.1% | 771.1% | 799.0% | 508.9% | |
| Cheung Wo International Holdings Ltd ($9) | 90.3% | 465.2% | 383.2% | 202.4% | |
| Haichang Holdings Ltd ($2255) | 21.4% | 18.5% | 10.3% | 64.2% | |
| Amax International Holdings Ltd ($959) | 10.4% | 2.7% | 17.2% | 59.8% | 42.5% |
| |
|---|
| Median (27 companies) | 8.5% | 6.6% | 4.6% | 8.1% | 4.3% |
|---|
| Global Digital Creations Holdings Ltd ($8271) | 112.3% | 14.1% | 9.0% | 8.5% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | -17.0% |
| China Animation Characters Co Ltd ($1566) | | 119.2% | 117.8% | 24.1% | 14.0% |
| Neptune Group Ltd ($70) | 22.8% | 23.8% | 21.1% | 18.1% | 0.3% |
| SMI Holdings Group Ltd ($198) | 1.3% | 8.4% | 9.9% | 10.5% | |
| Dynam Japan Holdings Co Ltd ($6889) | 23.8% | 25.4% | 21.8% | 10.5% | 12.6% |
| |
|---|
| Median (28 companies) | -1.1% | 5.1% | -0.3% | -2.6% | -7.1% |
|---|
| Global Digital Creations Holdings Ltd ($8271) | -2.4% | 0.4% | 3.6% | 0.7% | 1.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 1.1x | 4.2x | 2.7x | 25.8x | |
| Nan Hai Corp Ltd ($680) | 80.8x | 3.5x | 20.8x | 12.6x | 4.5x |
| Haichang Holdings Ltd ($2255) | 7.0x | 4.7x | 1.7x | 1.7x | |
| SMI Holdings Group Ltd ($198) | 2.0x | 1.6x | 2.1x | 1.6x | |
| REXLot Holdings Ltd ($555) | -0.0x | -0.2x | 7.2x | 1.6x | |
| |
|---|
| Median (13 companies) | -0.1x | -0.6x | -0.3x | -0.4x | -0.2x |
|---|
| Global Digital Creations Holdings Ltd ($8271) | | 1.0x | -0.3x | -4.7x | -7.5x |
