Tongda Group Holdings Ltd is an attractive growth stock: revenue grew 29.2% and EBITDA 37.4% annually over the last three years
27/03/2017 • About Tongda Group Holdings Ltd (
$698) • By InTwits
Tongda Group Holdings Ltd is an attractive growth stock in Electronics industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Tongda Group Holdings Ltd showed fast growth in the last financial year. The company's revenue surged on 28.8% in FY2016. In addition to revenue Tongda Group Holdings Ltd also keeps delivering EBITDA growth. It was 37.6% in FY2016
In the last 3 years Tongda Group Holdings Ltd showed fast revenue growth of 29.2% from FY2013 to FY2016 annualy. EBITDA surged on 37.4% from FY2013 to FY2016 annualy.
Tongda Group Holdings Ltd ($698) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 3,408 | 3,627 | 4,791 | 6,074 | 7,825 |
|---|
| Revenue growth, % | | 6.4% | 32.1% | 26.8% | 28.8% |
|---|
| Gross margin, % | 21.4% | 22.0% | 23.9% | 24.9% | 24.1% |
|---|
| SG&A, % | 8.58% | 9.82% | 9.23% | 9.78% | 8.67% |
|---|
| EBITDA | 583 | 610 | 882 | 1,148 | 1,580 |
|---|
| EBITDA growth, % | | 4.5% | 44.7% | 30.1% | 37.6% |
|---|
| EBITDA margin, % | 17.1% | 16.8% | 18.4% | 18.9% | 20.2% |
|---|
| Net Income | 300 | 360 | 502 | 703 | 1,004 |
|---|
| Net Income margin, % | 8.80% | 9.93% | 10.5% | 11.6% | 12.8% |
|---|
| |
| CAPEX | 266 | 178 | 547 | 986 | 0 |
|---|
| CAPEX/Revenue, % | 7.80% | 4.90% | 11.4% | 16.2% | 0% |
|---|
| Debt | 653 | 850 | 980 | 2,369 | 2,976 |
|---|
| Cash | 221 | 178 | 360 | 762 | 869 |
|---|
| Net Debt/EBITDA | 0.7x | 1.1x | 0.7x | 1.4x | 1.3x |
|---|
| |
| ROIC, % | 15.2% | 13.5% | 16.5% | 16.3% | 17.8% |
|---|
| ROE, % | 15.2% | 15.8% | 16.9% | 18.7% | 23.0% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Tongda Group Holdings Ltd showed EBITDA margin growth of 1.30 pp from 18.9% to 20.2% in FY2016. In the longer period EBITDA margin surged on 3.40 pp from 16.8% in FY2013 to 20.2% in FY2016.
Tongda Group Holdings Ltd shows attractive ROIC at 17.8% for the last 12 months which assumes stable development model. During the last three years it surged - it was 13.5% in FY2013. It's average ROIC for the last three years was 16.9%.
Tongda Group Holdings Ltd showed fast Net Income margin growth of 1.20 pp from 11.6% to 12.8% in FY2016. In the last 3 years Net Income margin surged on 2.90 pp from 9.90% in FY2013 to 12.8% in FY2016.
Tongda Group Holdings Ltd operates at ROE of 23.0%. It's average level of ROE for the last three years was 19.5%.
Capital expenditures (CAPEX)
In FY2016 Tongda Group Holdings Ltd had CAPEX/Revenue of 0%. Tongda Group Holdings Ltd's CAPEX/Revenue dropped on 4.90 pp from 4.90% in FY2013 to 0% in FY2016.
Leverage (Debt)
Having such a fast growth profile Tongda Group Holdings Ltd keeps medium debt level at 1.3x Net Debt/EBITDA. In the longer period the company's leverage surged on 0.23x from 1.10x in FY2013 to 1.33x in FY2016.
Valuation vs. comparable companies
The company trades at 11.1x EV/EBITDA which is 65.9% lower than 32.5x Electronics industry avearge calculated based on 52 companies. At the end of trading day today Tongda Group Holdings Ltd traded at 15.4x P/E which is 49.6% lower than 30.5x Electronics peer group avearge calculated on the basis of 10 companies.
Peers in Electronics
Below we provide Tongda Group Holdings Ltd benchmarking against other companies in Electronics 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| GCL New Energy Holdings Ltd ($451) | 14.7% | -6.8% | 10.9% | 53.9% | |
| Tech Pro Technology Development Ltd ($3823) | 7.4% | -44.9% | -13.7% | 52.4% | |
| Nanjing Sample Technology Co Ltd ($1708) | 36.1% | 8.0% | 15.4% | 34.8% | |
| AAC Technologies Holdings Inc ($2018) | 54.8% | 28.9% | 9.7% | 32.2% | |
| Ningbo Wanhao Holdings Co Ltd ($8249) | 5.7% | 412.4% | -6.9% | 28.9% | |
| |
|---|
| Median (50 companies) | 5.0% | 3.6% | 5.0% | -1.2% | 0.6% |
|---|
| Tongda Group Holdings Ltd ($698) | | 6.4% | 32.1% | 26.8% | 28.8% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 54.0% | 58.1% | 49.5% | 49.6% | |
| AAC Technologies Holdings Inc ($2018) | 44.2% | 42.7% | 41.4% | 41.5% | |
| TeleEye Holdings Ltd ($8051) | 44.0% | 42.1% | 38.5% | 37.0% | 40.9% |
| Hi Sun Technology China Ltd ($818) | 28.1% | 37.4% | 33.3% | 34.7% | 30.8% |
| Datronix Holdings Ltd ($889) | 32.9% | 32.0% | 34.1% | 34.6% | |
| |
|---|
| Median (48 companies) | 13.6% | 13.8% | 13.9% | 14.0% | 14.1% |
|---|
| Tongda Group Holdings Ltd ($698) | 21.4% | 22.0% | 23.9% | 24.9% | 24.1% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.8% | 35.8% | 34.9% | 34.8% | |
| GCL New Energy Holdings Ltd ($451) | 10.8% | 11.1% | 12.6% | 33.0% | |
| Daiwa Associate Holdings ($1037) | 2.4% | 3.8% | 2.8% | 25.6% | -53.6% |
| Wasion Group Holdings Ltd ($3393) | 18.8% | 21.2% | 22.0% | 19.3% | |
| Technovator International Ltd ($1206) | 19.0% | 19.0% | 20.8% | 18.0% | 21.2% |
| |
|---|
| Median (50 companies) | 6.5% | 6.0% | 4.6% | 4.6% | 4.1% |
|---|
| Tongda Group Holdings Ltd ($698) | 17.1% | 16.8% | 18.4% | 18.9% | 20.2% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| GCL New Energy Holdings Ltd ($451) | 5.5% | 5.1% | 5.4% | 401.2% | |
| National Electronic Hldgs ($213) | 3.4% | 18.1% | 7.1% | 49.7% | 4.7% |
| Irico Group Electronics Co Ltd ($438) | 39.9% | 30.4% | 17.4% | 25.8% | |
| Kingwell Group Ltd ($1195) | 8.6% | 5.4% | 5.3% | 21.4% | 0.0% |
| AAC Technologies Holdings Inc ($2018) | 18.7% | 8.7% | 19.6% | 18.4% | |
| |
|---|
| Median (50 companies) | 3.7% | 3.0% | 3.7% | 2.9% | 3.2% |
|---|
| Tongda Group Holdings Ltd ($698) | 7.8% | 4.9% | 11.4% | 16.2% | |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| AAC Technologies Holdings Inc ($2018) | 29.1% | 30.0% | 26.0% | 27.8% | |
| Cowell e Holdings Inc ($1415) | 12.5% | 27.1% | 24.4% | 25.8% | |
| Changhong Jiahua Holdings Ltd ($8016) | 29.6% | 17.7% | 15.1% | 16.7% | |
| Alltronics Holdings Ltd ($833) | 13.1% | 15.2% | 19.8% | 15.6% | |
| Varitronix International Ltd ($710) | 8.7% | 17.5% | 11.4% | 11.6% | |
| |
|---|
| Median (50 companies) | 4.3% | 3.5% | 3.0% | 1.9% | 2.2% |
|---|
| Tongda Group Holdings Ltd ($698) | 15.2% | 13.5% | 16.5% | 16.3% | 17.8% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| National Electronic Hldgs ($213) | 16.3x | 30.2x | 84.8x | 19.9x | 42.7x |
| GCL New Energy Holdings Ltd ($451) | 2.9x | 2.6x | 1.7x | 17.4x | |
| Man Yue Technology Holdings Ltd ($894) | 2.1x | 2.7x | 3.3x | 6.5x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.2x | 2.6x | 5.7x | 5.4x | 14.1x |
| SAS Dragon Hldg Ltd ($1184) | 7.1x | 2.0x | 6.4x | 4.8x | |
| |
|---|
| Median (32 companies) | 1.1x | 1.1x | 1.0x | 0.2x | 0.8x |
|---|
| Tongda Group Holdings Ltd ($698) | 0.7x | 1.1x | 0.7x | 1.4x | 1.3x |
