See Corp Ltd reports 226% CAPEX growth in 2020 while 13.4% Revenue decline
29/09/2020 • About See Corp Ltd (
$491) • By InTwits
See Corp Ltd reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -122.2%
- See Corp Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -116.2% for the sames years
- See Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 128.2%. At the same time it's a lot of higher than industry average of 19.6%.
- CAPEX is quite volatile: 346 HKDm in FY2020, 106 HKDm in FY2019, 179 HKDm in FY2018, 22 HKDm in FY2017, 12 HKDm in FY2016
- The company has unprofitable business model: ROIC is -27.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
See Corp Ltd's Revenue dropped on 13.4%. During the last 5 years Revenue growth topped in FY2018 at 103% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 54.8 pp from -67.4% to -122% in FY2020.
Gross Margin increased on 6.2 pp from 54.0% to 60.1% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2017 at 16.6% and was growing since that time. SG&A as a % of Revenue surged on 120 pp from 113% to 233% in FY2020.
Net Income margin dropped on 184 pp from -86.7% to -271% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 274% in FY2020. The company's CAPEX/Revenue surged on 224 pp from 50.0% in FY2017 to 274% in FY2020. It's average level of CAPEX/Revenue for the last three years was 181%.
Inventories as a % of Revenue increased slightly on 1.2 pp from 0.44% to 1.7% in FY2020.
Return on investment
The company operates at negative ROIC (-27.9%) and ROE (-74.6%). ROIC decreased on 7.4 pp from -20.5% to -27.9% in FY2020. ROE dropped on 56.2 pp from -18.4% to -74.6% in FY2020. ROIC followed a declining trend at -5.4 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -56.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt surged while cash dropped on 75.6%.
See Corp Ltd has short term refinancing risk: cash is only 77.4% of short term debt.
Management team
At the end of financial year the company had 502 employees. The number of employees surged on 50.8%. Average revenue per employee in FY2020 was 251,484 HKD and it dropped on 42.5%.
Financial and operational results
FY ended 30/06/2020
See Corp Ltd ($491) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 24.3 | 44.9 | 91.2 | 145.8 | 126.2 | -13.4% |
| Gross Profit | 8.2 | 7.5 | 48.2 | 78.6 | 75.9 | -3.5% |
| SG&A | 37.1 | 48.7 | 118.0 | 164.4 | 294.2 | 78.9% |
| EBITDA | -19.4 | -95.6 | -134.8 | -98.2 | -154.3 | |
| EBIT | | -111.0 | -160.4 | -137.8 | -301.8 | |
| Tax | | -0.2 | -0.2 | | -1.0 | |
| Net Income | -106.0 | -62.3 | -153.8 | -126.4 | -342.2 | |
Balance Sheet
|
|---|
| Cash | 398.5 | 452.6 | 264.1 | 166.5 | 40.6 | -75.6% |
| Inventory | | 0.1 | 0.9 | 0.6 | 2.1 | 229.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 52.5 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 1,250.1 | |
Cash flow
|
|---|
| Capex | 11.6 | 22.5 | 178.9 | 106.1 | 346.1 | 226.0% |
| Acquisitions | | 113.1 | | | | |
Ratios
|
|---|
| Revenue growth | -80.4% | 85.3% | 103.0% | 59.8% | -13.4% | |
| EBITDA growth | -55.8% | 392.1% | 41.0% | -27.2% | 57.0% | |
|
|---|
| Gross Margin | 33.8% | 16.6% | 52.9% | 54.0% | 60.1% | 6.2% |
| EBITDA Margin | -80.1% | -212.9% | -147.8% | -67.4% | -122.2% | -54.8% |
| EBIT Margin | | -247.1% | -175.9% | -94.5% | -239.0% | -144.5% |
| SG&A, % of revenue | 152.8% | 108.3% | 129.4% | 112.8% | 233.0% | 120.2% |
| Net Income Margin | -437.2% | -138.7% | -168.6% | -86.7% | -271.0% | -184.3% |
| CAPEX, % of revenue | 47.7% | 50.0% | 196.2% | 72.8% | 274.1% | 201.3% |
|
|---|
| ROIC | -4.6% | -13.5% | -19.7% | -20.5% | -27.9% | -7.4% |
| ROE | -12.8% | -7.4% | -18.6% | -18.4% | -74.6% | -56.2% |
People
|
|---|
| Employees | | 95 | 316 | 333 | 502 | 50.8% |
| Revenue/Employee, th. HKD | | 473 | 289 | 438 | 251 | -42.5% |
Peers in Home Furnishings
Below we provide See Corp Ltd benchmarking against other companies in Home Furnishings 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.
