Dynamic Holdings Ltd reports 357% EBITDA decline in 2020 and 13.3% Revenue decline
29/09/2020 • About Dynamic Holdings Ltd (
$29) • By InTwits
Dynamic Holdings Ltd reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dynamic Holdings Ltd is a company in decline: FY2020 revenue growth was -13.3%, 5 years revenue CAGR was -2.3%
- EBITDA Margin is declining: -68.9% in FY2020 vs. 23.2% in FY2019 vs. 57.3% in FY2016
- EBITDA Margin is quite volatile: -68.9% in FY2020, 23.2% in FY2019, 130.0% in FY2018, 144.1% in FY2017, 57.3% in FY2016
- Dynamic Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- In the last 5 years the company invested considerably less than D&A: 2 HKDm vs. 4 HKDm. In FY2020 this situation was still the same: CAPEX was 0 while D&A was 3
- The company has unprofitable business model: ROIC is -2.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Dynamic Holdings Ltd's Revenue dropped on 13.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.3 pp from 39.5% to 48.8% in FY2020. During the last 5 years EBITDA Margin topped in FY2017 at 144% and was declining since that time.
Gross Margin decreased on 4.8 pp from 76.1% to 71.2% in FY2020. Gross Margin declined at -2.1 pp per annum in FY2016-FY2020. SG&A as a % of Revenue decreased slightly on 1.4 pp from 42.0% to 40.7% in FY2020. SG&A as a % of Revenue followed a growing trend at 4.5 pp per annum in the last 5 years.
Net Income margin dropped on 76.7 pp from 45.9% to -30.9% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2017 at 114% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Dynamic Holdings Ltd's CAPEX/Revenue was 0.18% in FY2020. Dynamic Holdings Ltd's CAPEX/Revenue decreased slightly on 0.63 pp from 0.81% in FY2017 to 0.18% in FY2020. Average CAPEX/Revenue for the last three years was 0.44%.
Return on investment
The company operates at negative ROIC (-2.6%) and ROE (-1.4%). ROIC decreased on 3.5 pp from 0.90% to -2.6% in FY2020. ROE decreased on 3.7 pp from 2.3% to -1.4% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 5.8% and was declining since that time. During the last 5 years ROE topped in FY2018 at 6.1% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is . Debt decreased on 6.6% while cash increased on 7.2%.
Dynamic Holdings Ltd has no short term refinancing risk: cash is higher than short term debt (5,619.8%).
Average interest expence paid by the company was 3.4% in FY2020.
The company paid 14 HKD despite negative Net Income of -28 HKD in FY2020.
Management team
The company has 4.8% shares owned by insiders. Insider ownership didn't change in 2020.
The company has 55 employees. The number of employees surged on 10%. Average revenue per employee in FY2020 was 1,673,709 HKD and it dropped on 21.2%.
Financial and operational results
FY ended 30/06/2020
Dynamic Holdings Ltd ($29) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 103.9 | 101.8 | 113.0 | 106.2 | 92.1 | -13.3% |
| Gross Profit | 84.0 | 79.7 | 88.7 | 80.8 | 65.6 | -18.8% |
| SG&A | 26.5 | 27.7 | 41.5 | 44.7 | 37.4 | -16.1% |
| EBITDA | 59.5 | 146.6 | 146.9 | 24.7 | -63.4 | -357.0% |
| EBIT | | 146.3 | 146.6 | 24.3 | -66.3 | -373.2% |
| Interest expence | | 4.0 | 3.3 | 4.1 | 3.5 | -15.1% |
| Tax | | 30.0 | 18.2 | -8.4 | -23.9 | |
| Net Income | 95.1 | 115.6 | 126.1 | 48.7 | -28.4 | -158.3% |
Balance Sheet
|
|---|
| Cash | 244.7 | 258.3 | 257.9 | 260.5 | 279.4 | 7.2% |
| Short Term Debt | 149.6 | 7.8 | 7.8 | 107.8 | 5.0 | -95.4% |
| Long Term Debt | 0.0 | 135.5 | 127.8 | 0.0 | 95.7 | |
Cash flow
|
|---|
| Capex | 0.1 | 0.8 | 0.1 | 1.1 | 0.2 | -85.2% |
| Dividends | | 12.0 | 12.0 | 16.0 | 14.0 | -12.5% |
Ratios
|
|---|
| Revenue growth | 0.4% | -2.0% | 11.1% | -6.0% | -13.3% | |
| EBITDA growth | -1.3% | 146.3% | 0.2% | -83.2% | -357.0% | |
|
|---|
| Gross Margin | 80.8% | 78.3% | 78.5% | 76.1% | 71.2% | -4.8% |
| EBITDA Margin | 57.3% | 144.1% | 130.0% | 23.2% | -68.9% | -92.2% |
| EBIT Margin | | 143.8% | 129.7% | 22.9% | -72.0% | -94.9% |
| SG&A, % of revenue | 25.5% | 27.3% | 36.7% | 42.0% | 40.7% | -1.4% |
| Net Income Margin | 91.5% | 113.6% | 111.6% | 45.9% | -30.9% | -76.7% |
| CAPEX, % of revenue | 0.1% | 0.8% | 0.1% | 1.1% | 0.2% | -0.9% |
|
|---|
| ROIC | 2.4% | 5.8% | 5.5% | 0.9% | -2.6% | -3.5% |
| ROE | 4.9% | 6.0% | 6.1% | 2.3% | -1.4% | -3.7% |
| Net Debt/EBITDA | -1.6x | -0.8x | -0.8x | -6.2x | |
| Interest expence / Average debt | | 2.7% | 2.4% | 3.4% | 3.4% | 0.1% |
People
|
|---|
| Insider ownership | | 4.8% | 4.8% | 4.8% | 4.8% | 0.0% |
| Employees | | 50 | 50 | 50 | 55 | 10.0% |
| Revenue/Employee, th. HKD | | 2,035 | 2,261 | 2,124 | 1,674 | -21.2% |
Peers in Real Estate
Below we provide Dynamic Holdings Ltd benchmarking against other companies in Real Estate 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| New World Development Co Ltd ($17) | 7.8% | -4.9% | 7.2% | 26.5% | - |
| China Motor Bus Co Ltd ($26) | - | -10.8% | 4.5% | 3.5% | -6.2% |
| Sun Hung Kai Properties Ltd ($16) | - | -14.2% | 9.5% | -0.4% | -3.1% |
| |
|---|
| Median (3 companies) | 10.3% | 6.6% | 7.2% | 3.5% | -4.6% |
|---|
| Dynamic Holdings Ltd ($29) | - | -2.0% | 11.1% | -6.0% | -13.3% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sun Hung Kai Properties Ltd ($16) | 38.1% | 45.7% | 48.9% | 52.6% | 51.0% |
| New World Development Co Ltd ($17) | 31.1% | 32.2% | 33.9% | 32.6% | - |
| |
|---|
| Median (2 companies) | 41.9% | 36.1% | 41.4% | 42.6% | 51.0% |
|---|
| Dynamic Holdings Ltd ($29) | 80.8% | 78.3% | 78.5% | 76.1% | 71.2% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sun Hung Kai Properties Ltd ($16) | 43.2% | 57.6% | 61.9% | 62.2% | 42.8% |
| China Motor Bus Co Ltd ($26) | 88.9% | 64.4% | 62.1% | 58.3% | 59.3% |
| New World Development Co Ltd ($17) | 32.8% | 24.0% | 55.0% | 36.0% | - |
| |
|---|
| Median (3 companies) | 29.0% | 37.7% | 61.9% | 58.3% | 51.1% |
|---|
| Dynamic Holdings Ltd ($29) | 57.3% | 144.1% | 130.0% | 23.2% | -68.9% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sun Hung Kai Properties Ltd ($16) | 7.3% | 11.8% | 27.1% | 14.7% | 59.6% |
| New World Development Co Ltd ($17) | 15.0% | 28.5% | 16.4% | 13.2% | - |
| China Motor Bus Co Ltd ($26) | 0.3% | 0.2% | 0.2% | 0.2% | 0.3% |
| |
|---|
| Median (3 companies) | 4.0% | 3.8% | 16.4% | 13.2% | 29.9% |
|---|
| Dynamic Holdings Ltd ($29) | 0.1% | 0.8% | 0.1% | 1.1% | 0.2% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sun Hung Kai Properties Ltd ($16) | 6.5% | 7.3% | 8.0% | 7.3% | 4.3% |
| New World Development Co Ltd ($17) | 5.0% | 3.2% | 7.7% | 5.8% | - |
| China Motor Bus Co Ltd ($26) | 1.1% | 0.7% | 0.6% | 0.5% | 0.5% |
| |
|---|
| Median (3 companies) | 3.5% | 7.9% | 7.7% | 5.8% | 2.4% |
|---|
| Dynamic Holdings Ltd ($29) | 2.4% | 5.8% | 5.5% | 0.9% | -2.6% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| New World Development Co Ltd ($17) | 4.1x | 5.9x | 2.3x | 3.3x | - |
| Sun Hung Kai Properties Ltd ($16) | 1.3x | 0.8x | 1.2x | 1.4x | 2.3x |
| China Motor Bus Co Ltd ($26) | -23.3x | -37.0x | -30.2x | -33.5x | -56.8x |
| |
|---|
| Median (3 companies) | 2.9x | 1.4x | 1.2x | 1.4x | -27.3x |
|---|
| Dynamic Holdings Ltd ($29) | -1.6x | -0.8x | -0.8x | -6.2x | - |
