GF Securities Co Ltd reports 39.2% Net Income decline while 1.2 pp EBITDA Margin growth from 62.8% to 64.0%
24/03/2017 • About GF Securities Co Ltd (
$1776) • By InTwits
GF Securities Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 64.0% in 2016 vs. 62.8% in 2015 vs. 43.8% in 2012
- GF Securities Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: 780 in FY2016, 676 in FY2015, 566 in FY2014, 388 in FY2013, 307 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
GF Securities Co Ltd ($1776) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,990 | 9,215 | 16,126 | 42,555 | 27,381 | -35.7% |
| EBITDA | 3,063 | 4,710 | 9,326 | 26,738 | 17,520 | -34.5% |
| Net Income | 2,191 | 2,813 | 5,023 | 13,201 | 8,030 | -39.2% |
Balance Sheet
|
|---|
| Cash | 36,379 | 31,374 | 67,199 | 106,250 | 80,297 | -24.4% |
| Short Term Debt | 11,132 | 14,789 | 31,946 | 31,266 | 31,800 | 1.7% |
| Long Term Debt | 0 | 11,980 | 29,031 | 75,739 | 76,254 | 0.7% |
Cash flow
|
|---|
| Capex | 338 | 239 | 235 | 390 | 389 | -0.2% |
Ratios
|
|---|
| Revenue growth | 16.3% | 31.8% | 75.0% | 163.9% | -35.7% | |
| EBITDA growth | 13.0% | 53.8% | 98.0% | 186.7% | -34.5% | |
| EBITDA Margin | 43.8% | 51.1% | 57.8% | 62.8% | 64.0% | 1.2% |
| Net Income Margin | 31.4% | 30.5% | 31.1% | 31.0% | 29.3% | -1.7% |
| CAPEX, % of revenue | 4.8% | 2.6% | 1.5% | 0.9% | 1.4% | 0.5% |
| ROIC | 5.0% | 4.6% | 5.3% | 8.2% | 4.0% | -4.2% |
| ROE | 6.8% | 8.3% | 13.5% | 22.5% | 10.3% | -12.2% |
| Net Debt/EBITDA | -8.2x | -1.0x | -0.7x | 0.0x | 1.6x | 1.6x |
Revenue and profitability
The company's Revenue dropped on 35.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 62.8% to 64.0% in 2016.
Net Income marign decreased slightly on 1.7 pp from 31.0% to 29.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 GF Securities Co Ltd had CAPEX/Revenue of 1.4%. GF Securities Co Ltd showed small CAPEX/Revenue decline of 1.2 pp from 2.6% in 2013 to 1.4% in 2016. For the last three years the average CAPEX/Revenue was 1.3%.
Return on investment
The company operates at low ROIC (3.96%) and ROE (10.29%). ROIC decreased on 4.2 pp from 8.2% to 4.0% in 2016. ROE dropped on 12.2 pp from 22.5% to 10.3% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 6.2x. Net Debt / EBITDA jumped on 1.6x from 0.028x to 1.6x in 2016. Debt increased slightly on 0.98% while cash dropped on 24.4%.
Appendix 1: Peers in Diversified Finan Serv
Below you can find GF Securities Co Ltd benchmarking vs. other companies in Diversified Finan Serv 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 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | | -23.1% | -87.3% | 1,860.5% | 25.3% |
| Crown International Corp Ltd ($727) | | -75.0% | 117.4% | 802.5% | -25.1% |
| Global Strategic Group Ltd ($8007) | | 2.1% | 806.3% | 681.2% | -83.2% |
| Upbest Group Ltd ($335) | | -61.8% | 24.1% | 208.1% | -63.4% |
| AID Partners Capital Holdings Ltd ($8088) | | -79.5% | 655.2% | 162.0% | |
| |
|---|
| Median (64 companies) | 10.6% | 14.9% | 26.5% | 24.0% | 9.1% |
|---|
| GF Securities Co Ltd ($1776) | | 31.8% | 75.0% | 163.9% | -35.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Roma Group Ltd ($8072) | | | 99.4% | 98.7% | |
| First China Financial Network Holdings Ltd ($8123) | 93.4% | | 94.5% | 97.4% | |
| China Smarter Energy Group Holdings Ltd ($1004) | 6.2% | 4.0% | 46.9% | 96.9% | 98.4% |
| Chinese Strategic Holdings Ltd ($8089) | 99.1% | 97.9% | 97.0% | 96.6% | |
| Allied Group Ltd ($373) | 95.1% | 94.4% | 93.6% | 92.2% | |
| |
|---|
| Median (12 companies) | 64.2% | 75.1% | 88.2% | 90.3% | 69.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Smarter Energy Group Holdings Ltd ($1004) | -282.7% | -373.2% | -1,524.9% | 212.2% | 55.6% |
| China Aircraft Leasing Group Holdings Ltd ($1848) | 91.3% | 86.4% | 92.9% | 107.0% | |
| Get Nice Holdings Ltd ($64) | 2.6% | 153.4% | 92.7% | 83.9% | 84.5% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 81.6% | 73.4% | 75.7% | 82.1% | 73.7% |
| Hong Kong Finance Group Co Ltd ($1273) | 76.9% | 67.5% | 65.2% | 74.8% | 70.3% |
| |
|---|
| Median (66 companies) | 18.8% | 36.2% | 47.2% | 31.4% | 49.3% |
|---|
| GF Securities Co Ltd ($1776) | 43.8% | 51.1% | 57.8% | 62.8% | 64.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Aircraft Leasing Group Holdings Ltd ($1848) | 351.0% | 0.1% | 33.3% | 64.6% | |
| Willie International Holdings Ltd ($273) | | 0.3% | 0.8% | 58.0% | |
| China Assurance Finance Group Ltd ($8090) | 94.7% | 68.9% | 53.3% | 51.0% | |
| AID Partners Capital Holdings Ltd ($8088) | 4.1% | 2.9% | 28.4% | 26.6% | |
| Hongkong Chinese Ltd ($655) | | | 0.1% | 25.6% | 0.1% |
| |
|---|
| Median (65 companies) | 1.9% | 1.8% | 1.1% | 1.5% | 1.6% |
|---|
| GF Securities Co Ltd ($1776) | 4.8% | 2.6% | 1.5% | 0.9% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong Exchanges and Clearing Ltd ($388) | 29.1% | 20.1% | 21.5% | 29.1% | 19.3% |
| China Smarter Energy Group Holdings Ltd ($1004) | -19.4% | -23.0% | -14.0% | 22.5% | 2.1% |
| Oi Wah Pawnshop Credit Holdings Ltd ($1319) | 32.7% | 20.7% | 14.0% | 15.3% | 12.5% |
| Emperor Capital Group Ltd ($717) | 5.1% | 12.8% | 13.1% | 14.6% | 12.4% |
| Roma Group Ltd ($8072) | 19.6% | 43.7% | 107.8% | 13.3% | 9.8% |
| |
|---|
| Median (69 companies) | 3.9% | 4.0% | 4.8% | 3.5% | 4.0% |
|---|
| GF Securities Co Ltd ($1776) | 5.0% | 4.6% | 5.3% | 8.2% | 4.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hoifu Energy Group Ltd ($7) | | | | 62.5x | |
| South China Financial Holdings Ltd ($619) | | | | 56.9x | |
| Bright Smart Securities & Commodities Group Ltd ($1428) | 2.1x | 10.3x | 9.3x | 39.3x | 4.3x |
| Far East Horizon Ltd ($3360) | 16.9x | 21.7x | 20.0x | 20.8x | |
| Quam Ltd ($952) | 58.9x | 15.9x | 4.1x | 14.8x | -18.0x |
| |
|---|
| Median (49 companies) | -0.5x | 0.3x | 0.1x | -0.1x | 0.5x |
|---|
| GF Securities Co Ltd ($1776) | -8.2x | -1.0x | -0.7x | 0.0x | 1.6x |
