China Strategic Holdings Ltd reports 175% Net Income decline in 2016 while 51.9 pp EBITDA Margin growth from -7.3% to 44.6%
23/03/2017 • About China Strategic Holdings Ltd (
$235) • By InTwits
China Strategic Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Strategic Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -2.6%0
- The company has potentially unprofitable business model: ROIC is at 3.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Strategic Holdings Ltd ($235) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5.7 | 109.5 | 417.6 | 239.5 | 270.7 | 13.0% |
| Gross Profit | 0.6 | 12.9 | 30.7 | 33.6 | 189.7 | 464.6% |
| SG&A | 42.0 | 43.1 | 45.4 | 53.9 | 72.7 | 34.7% |
| EBITDA | -90.8 | -27.3 | -11.9 | -17.5 | 120.7 | |
| Net Income | -90.6 | -15.4 | 377.0 | 584.1 | -436.9 | -174.8% |
Balance Sheet
|
|---|
| Cash | 243.6 | 180.1 | 302.5 | 372.0 | 1,958.9 | 426.6% |
| Short Term Debt | 113.5 | 111.7 | 0.0 | 101.1 | 88.1 | -12.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 1,470.9 | |
Cash flow
|
|---|
| Capex | 0.0 | 0.0 | 2.5 | 1.6 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -39.2% | 1,832.6% | 281.4% | -42.7% | 13.0% | |
| EBITDA growth | 34.1% | -69.9% | -56.5% | 47.2% | -790.2% | |
| Gross Margin | 11.4% | 11.7% | 7.4% | 14.0% | 70.1% | 56.0% |
| EBITDA Margin | -1,603.6% | -25.0% | -2.8% | -7.3% | 44.6% | 51.9% |
| Net Income Margin | -1,599.5% | -14.1% | 90.3% | 243.9% | -161.4% | -405.3% |
| SG&A, % of revenue | 740.9% | 39.4% | 10.9% | 22.5% | 26.8% | 4.3% |
| CAPEX, % of revenue | 0.0% | 0.0% | 0.6% | 0.7% | | -0.7% |
| ROIC | -12.0% | -4.0% | -1.3% | -0.8% | 3.0% | 3.7% |
| ROE | -13.5% | -2.5% | 40.4% | 25.2% | -13.9% | -39.1% |
| Net Debt/EBITDA | | | | | -3.3x | -3.3x |
Revenue and profitability
The company's Revenue jumped on 13.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from -6.9% to -5.4% in FY2016.
Gross Margin jumped on 56.0 pp from 14.0% to 70.1% in FY2016. SG&A as a % of Revenue increased on 4.3 pp from 22.5% to 26.8% in FY2016.
Net Income marign dropped on 405 pp from 244% to -161% in FY2016.
Return on investment
The company operates at low but positive ROIC (2.97%) and negative ROE (-13.89%). ROIC increased on 3.7 pp from -0.77% to 3.0% in FY2016. ROE dropped on 39.1 pp from 25.2% to -13.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -3.3x and Debt / EBITDA is 12.9x. Net Debt / EBITDA dropped3.3x from to -3.3x in FY2016. Debt jumped on 1,442% while cash jumped on 427%.
Appendix 1: Peers in Housewares
Below we provide China Strategic Holdings Ltd benchmarking against other companies in Housewares 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 |
|---|
| International Housewares Retail Co Ltd ($1373) | | 23.7% | 16.6% | 11.7% | 4.5% |
| World Houseware Holdings Ltd ($713) | -4.8% | -7.4% | -0.4% | 0.2% | |
| China Creative Home Group Ltd ($1678) | 20.5% | 23.4% | 17.9% | -9.0% | |
| Perfectech International Holdings Ltd ($765) | -21.9% | -3.5% | -9.3% | -12.2% | |
| Bolina Holding Co Ltd ($1190) | 24.6% | 11.8% | -5.2% | -17.3% | |
| |
|---|
| Median (5 companies) | 7.9% | 11.8% | -0.4% | -9.0% | 4.5% |
|---|
| China Strategic Holdings Ltd ($235) | | 1,832.6% | 281.4% | -42.7% | 13.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| International Housewares Retail Co Ltd ($1373) | 44.5% | 46.1% | 46.5% | 46.3% | 46.5% |
| Bolina Holding Co Ltd ($1190) | 47.7% | 46.8% | 43.5% | 39.9% | |
| China Creative Home Group Ltd ($1678) | 44.2% | 44.3% | 40.4% | 36.9% | |
| Perfectech International Holdings Ltd ($765) | 23.9% | 26.6% | 25.1% | 22.7% | |
| World Houseware Holdings Ltd ($713) | 13.1% | 10.3% | 10.8% | 14.6% | |
| |
|---|
| Median (5 companies) | 44.2% | 44.3% | 40.4% | 36.9% | 46.5% |
|---|
| China Strategic Holdings Ltd ($235) | 11.4% | 11.7% | 7.4% | 14.0% | 70.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Creative Home Group Ltd ($1678) | 36.0% | 33.8% | 32.6% | 28.5% | |
| Bolina Holding Co Ltd ($1190) | 37.8% | 34.0% | 28.7% | 20.4% | |
| International Housewares Retail Co Ltd ($1373) | 9.8% | 9.6% | 8.5% | 6.7% | 5.8% |
| Perfectech International Holdings Ltd ($765) | 14.6% | 14.9% | 11.7% | 4.6% | |
| World Houseware Holdings Ltd ($713) | 7.1% | 3.4% | 2.4% | 4.2% | |
| |
|---|
| Median (5 companies) | 14.6% | 14.9% | 11.7% | 6.7% | 5.8% |
|---|
| China Strategic Holdings Ltd ($235) | -1,603.6% | -25.0% | -2.8% | -7.3% | 44.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Creative Home Group Ltd ($1678) | 1.2% | 2.4% | 42.0% | 13.1% | |
| World Houseware Holdings Ltd ($713) | 3.6% | 6.2% | 12.4% | 5.1% | |
| International Housewares Retail Co Ltd ($1373) | 2.7% | 3.0% | 2.0% | 3.9% | 1.3% |
| Perfectech International Holdings Ltd ($765) | 2.3% | 16.2% | 19.8% | 2.9% | |
| Bolina Holding Co Ltd ($1190) | 5.2% | 4.4% | 1.8% | 0.6% | |
| |
|---|
| Median (5 companies) | 2.7% | 4.4% | 12.4% | 3.9% | 1.3% |
|---|
| China Strategic Holdings Ltd ($235) | 0.0% | 0.0% | 0.6% | 0.7% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Creative Home Group Ltd ($1678) | 38.8% | 28.1% | 23.6% | 15.3% | |
| International Housewares Retail Co Ltd ($1373) | 44.7% | 38.4% | 20.3% | 11.8% | 10.9% |
| Bolina Holding Co Ltd ($1190) | 38.8% | 24.7% | 16.8% | 8.5% | |
| Perfectech International Holdings Ltd ($765) | 11.7% | 11.8% | 7.6% | 0.5% | |
| World Houseware Holdings Ltd ($713) | 1.6% | -1.9% | -2.8% | -1.8% | |
| |
|---|
| Median (5 companies) | 38.8% | 24.7% | 16.8% | 8.5% | 10.9% |
|---|
| China Strategic Holdings Ltd ($235) | -12.0% | -4.0% | -1.3% | -0.8% | 3.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| World Houseware Holdings Ltd ($713) | 1.4x | 4.7x | 11.7x | 7.4x | |
| China Creative Home Group Ltd ($1678) | -0.4x | -2.3x | -1.4x | -1.8x | |
| Bolina Holding Co Ltd ($1190) | -1.7x | -1.1x | -1.9x | -2.4x | |
| International Housewares Retail Co Ltd ($1373) | -0.2x | -0.3x | -2.7x | -2.8x | -1.1x |
| Perfectech International Holdings Ltd ($765) | -1.8x | -1.7x | -0.7x | -4.4x | |
| |
|---|
| Median (5 companies) | -0.4x | -1.1x | -1.4x | -2.4x | -1.1x |
|---|
