Sunwah Kingsway Capital Holdings Ltd reports 17.8% revenue decline in FY2020 and 4.9 pp EBITDA Margin growth from -12.5% to -7.6%
18/09/2020 • About Sunwah Kingsway Capital Holdings Ltd (
$188) • By InTwits
Sunwah Kingsway Capital Holdings Ltd reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sunwah Kingsway Capital Holdings Ltd is a company in decline: FY2020 revenue growth was -17.8%, 5 years revenue CAGR was -3.4%
- The company operates at negative EBITDA Margin: -7.6%
- Sunwah Kingsway Capital Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -5.7% for the sames years
- Sunwah Kingsway Capital Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 1 HKDm in FY2020, 1 HKDm in FY2019, 1 HKDm in FY2018, 0 HKDm in FY2017, 6 HKDm in FY2016
- In the last 5 years the company invested considerably less than D&A: 8 HKDm vs. 47 HKDm. In FY2020 this situation was still the same: CAPEX was 1 while D&A was 14
- The company has unprofitable business model: ROIC is -2.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sunwah Kingsway Capital Holdings Ltd's Revenue dropped on 17.8%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.9 pp from -12.5% to -7.6% in FY2020.
Net Income margin dropped on 12.7 pp from -24.6% to -37.3% in FY2020. During the last 5 years Net Income margin topped in FY2018 at 10.8% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.63%. Sunwah Kingsway Capital Holdings Ltd's CAPEX/Revenue increased slightly on 0.63 pp from 0% in FY2017 to 0.63% in FY2020. It's average level of CAPEX/Revenue for the last three years was 0.51%.
Return on investment
The company operates at negative ROIC (-2.1%) and ROE (-4.0%). ROIC showed almost no change in FY2020. ROE decreased slightly on 1.0 pp from -2.9% to -4.0% in FY2020. During FY2016-FY2020 ROE topped in FY2018 at 1.9% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -56.8x and Debt / EBITDA is . Debt surged on 214% while cash decreased on 9.5%.
Sunwah Kingsway Capital Holdings Ltd has no short term refinancing risk: cash is higher than short term debt (1,289.9%).
The company paid 26 HKD despite negative Net Income of -41 HKD in FY2020.
Management team
Insider ownership is 30.4%. Insider ownership didn't change in 2020.
At the end of financial year the company had 103 employees. The number of employees decreased on 4.6%. Average revenue per employee in FY2020 was 1,066,534 HKD and it dropped on 13.8%.
Financial and operational results
FY ended 30/06/2020
Sunwah Kingsway Capital Holdings Ltd ($188) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 62.4 | 131.4 | 189.1 | 133.7 | 109.9 | -17.8% |
| EBITDA | -53.4 | 12.2 | 30.6 | -16.8 | -8.4 | |
| EBIT | | 0.6 | 20.3 | -28.4 | -21.9 | |
| Tax | | 1.3 | 2.5 | 4.3 | 6.0 | 39.2% |
| Net Income | -69.9 | -1.9 | 20.4 | -32.8 | -40.9 | |
Balance Sheet
|
|---|
| Cash | 150.4 | 978.1 | 903.7 | 877.4 | 794.3 | -9.5% |
| Short Term Debt | 17.1 | 30.0 | 20.0 | 20.0 | 61.6 | 207.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 1.3 | |
Cash flow
|
|---|
| Capex | 6.3 | 0.0 | 0.9 | 0.6 | 0.7 | 21.8% |
| Dividends | | 25.0 | 25.0 | 28.0 | 26.0 | -7.1% |
Ratios
|
|---|
| Revenue growth | -52.3% | 110.6% | 43.9% | -29.3% | -17.8% | |
| EBITDA growth | -316.6% | -122.8% | 151.7% | -154.7% | -50.1% | |
|
|---|
| EBITDA Margin | -85.5% | 9.3% | 16.2% | -12.5% | -7.6% | 4.9% |
| EBIT Margin | | 0.4% | 10.7% | -21.3% | -19.9% | 1.3% |
| Net Income Margin | -112.0% | -1.5% | 10.8% | -24.6% | -37.3% | -12.7% |
| CAPEX, % of revenue | 10.1% | 0.0% | 0.5% | 0.4% | 0.6% | 0.2% |
|
|---|
| ROIC | -6.4% | -0.0% | 1.6% | -2.5% | -2.1% | 0.4% |
| ROE | -7.3% | -0.2% | 1.9% | -2.9% | -4.0% | -1.0% |
| Net Debt/EBITDA | | -77.9x | -28.8x | | |
People
|
|---|
| Insider ownership | | 30.4% | 30.4% | 30.4% | 30.4% | 0.0% |
| Employees | | 95 | 104 | 108 | 103 | -4.6% |
| Revenue/Employee, th. HKD | | 1,384 | 1,819 | 1,238 | 1,067 | -13.8% |
Peers in Diversified Finan Serv
Below you can find Sunwah Kingsway Capital Holdings 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Guoco Group Ltd ($53) | - | -88.4% | 68.1% | -41.7% | -23.4% |
| |
|---|
| Median (1 company) | 9.1% | -88.4% | 68.1% | -41.7% | -23.4% |
|---|
| Sunwah Kingsway Capital Holdings Ltd ($188) | - | 110.6% | 43.9% | -29.3% | -17.8% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Guoco Group Ltd ($53) | 33.7% | 39.1% | 24.3% | 23.3% | 10.5% |
| |
|---|
| Median (1 company) | 50.5% | 39.1% | 24.3% | 23.3% | 10.5% |
|---|
| Sunwah Kingsway Capital Holdings Ltd ($188) | -85.5% | 9.3% | 16.2% | -12.5% | -7.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Guoco Group Ltd ($53) | 11.0% | 8.3% | 28.4% | 4.6% | 6.7% |
| |
|---|
| Median (1 company) | 1.5% | 8.3% | 28.4% | 4.6% | 6.7% |
|---|
| Sunwah Kingsway Capital Holdings Ltd ($188) | 10.1% | 0.0% | 0.5% | 0.4% | 0.6% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Guoco Group Ltd ($53) | 4.7% | 5.1% | 4.9% | 2.1% | -0.6% |
| |
|---|
| Median (1 company) | 4.1% | 5.1% | 4.9% | 2.1% | -0.6% |
|---|
| Sunwah Kingsway Capital Holdings Ltd ($188) | -6.4% | -0.0% | 1.6% | -2.5% | -2.1% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Guoco Group Ltd ($53) | 2.3x | 1.7x | 2.4x | 5.2x | 23.2x |
| |
|---|
| Median (1 company) | 0.5x | 1.7x | 2.4x | 5.2x | 23.2x |
|---|
