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Yat Sing Holdings Ltd revenue decreased on 8.4% and EBITDA Margin decreased on 2.2 pp from -1.7% to -3.9%

30/09/2020 • About Yat Sing Holdings Ltd ($3708) • By InTwits

Yat Sing Holdings Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
  • Yat Sing Holdings Ltd is a company in decline: FY2020 revenue growth was -8.4%, 5 years revenue CAGR was -5.4%
  • The company operates at negative EBITDA Margin: -3.9%
  • EBITDA Margin is quite volatile: -3.9% in FY2020, -1.7% in FY2019, 1.8% in FY2018, 1.6% in FY2017, 4.0% in FY2016
  • In the last 5 years the company invested considerably less than D&A: 3 HKDm vs. 7 HKDm. In FY2020 this situation was still the same: CAPEX was while D&A was 1
  • The company has unprofitable business model: ROIC is -9.7%
  • It operates with high leverage: Net Debt/EBITDA is 16.2x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Yat Sing Holdings Ltd's Revenue decreased on 8.4%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from -1.7% to -3.9% in FY2020. EBITDA Margin declined at -1.9 pp per annum in FY2016-FY2020.

Gross Margin decreased on 2.7 pp from 7.5% to 4.8% in FY2020. SG&A as a % of Revenue showed almost no change in FY2020. SG&A as a % of Revenue stuck to a growing trend at 1.0 pp per annum in FY2016-FY2020.

Net Income margin decreased slightly on 0.58 pp from -3.2% to -3.8% in FY2020. Net Income margin stuck to a declining trend at -1.6 pp per annum in FY2016-FY2020.

Return on investment


The company operates at negative ROIC (-9.7%) and ROE (-9.3%). ROIC decreased on 5.4 pp from -4.3% to -9.7% in FY2020. ROE decreased slightly on 1.3 pp from -8.0% to -9.3% in FY2020. ROIC followed a declining trend at -4.8 pp per annum in FY2016-FY2020. ROE stuck to a declining trend at -4.1 pp per annum in the last 5 years.

Leverage (Debt)


Debt level is 16.2x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 90.3% while cash surged on 17.9%.

Yat Sing Holdings Ltd has no short term refinancing risk: cash is higher than short term debt (24,846.4%).

Average interest expence charged on company's debt was 9.1% in FY2020.

Management team


Insider ownership is 58.7%. Insider ownership didn't change in 2020.

The company has 93 employees. The number of employees decreased on 2.1%. Average revenue per employee in FY2020 was 4,091,452 HKD and it decreased on 6.5%.

Financial and operational results


Yat Sing Holdings Ltd ($3708) key annual financial indicators

mln. HKD201620172018201920202020/2019
P&L
Revenue488.1513.5443.6415.5380.5-8.4%
Gross Profit44.945.241.731.018.1-41.5%
SG&A26.639.837.541.136.0-12.4%
EBITDA19.88.37.9-6.9-14.8
EBIT6.96.2-9.9-15.4
Interest expence0.20.20.0-87.3%
Tax5.52.80.7-0.0-105.1%
Net Income11.61.33.7-13.4-14.5
Balance Sheet
Cash52.440.066.158.268.617.9%
Inventory1.5
Short Term Debt1.41.189.42.80.3-90.3%
Long Term Debt0.50.72.30.00.0
Cash flow
Capex1.50.80.40.2
Ratios
Revenue growth-3.0%5.2%-13.6%-6.3%-8.4%
EBITDA growth13.3%-58.0%-4.9%-187.1%115.2%

Gross Margin9.2%8.8%9.4%7.5%4.8%-2.7%
EBITDA Margin4.0%1.6%1.8%-1.7%-3.9%-2.2%
EBIT Margin1.3%1.4%-2.4%-4.1%-1.7%
SG&A, % of revenue5.4%7.7%8.4%9.9%9.5%-0.4%
Net Income Margin2.4%0.3%0.8%-3.2%-3.8%-0.6%
CAPEX, % of revenue0.3%0.2%0.1%0.0%

ROIC10.5%3.9%2.6%-4.3%-9.7%-5.4%
ROE7.0%0.8%2.1%-8.0%-9.3%-1.3%
Net Debt/EBITDA-2.6x-4.6x3.2x
Interest expence / Average debt0.4%0.4%9.1%8.6%
People
Insider ownership58.7%58.7%58.7%58.7%0.0%
Employees1181389593-2.1%
Revenue/Employee, th. HKD4,3513,2144,3744,091-6.5%

Peers in Commercial Services


Below we provide Yat Sing Holdings Ltd benchmarking against other companies in Commercial Services 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
Mega Expo Holdings Ltd ($1360)--35.8%146.8%126.8%-4.3%
 
Median (1 company)7.3%-35.8%146.8%126.8%-4.3%
Yat Sing Holdings Ltd ($3708)-5.2%-13.6%-6.3%-8.4%


Top companies by Gross margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Mega Expo Holdings Ltd ($1360)-52.7%45.8%66.5%51.7%
 
Median (1 company)34.1%52.7%45.8%66.5%51.7%
Yat Sing Holdings Ltd ($3708)9.2%8.8%9.4%7.5%4.8%


Top companies by EBITDA margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Mega Expo Holdings Ltd ($1360)-11.3%-6.0%47.6%39.5%48.8%
 
Median (1 company)4.8%-6.0%47.6%39.5%48.8%
Yat Sing Holdings Ltd ($3708)4.0%1.6%1.8%-1.7%-3.9%


Top companies by CAPEX/Revenue, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Mega Expo Holdings Ltd ($1360)5.1%5.8%0.0%0.3%0.2%
 
Median (1 company)3.9%5.8%0.0%0.3%0.2%
Yat Sing Holdings Ltd ($3708)0.3%0.2%0.1%0.0%-


Top companies by ROIC, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Mega Expo Holdings Ltd ($1360)-19.1%-18.3%40.6%32.9%25.6%
 
Median (1 company)3.2%-18.3%40.6%32.9%25.6%
Yat Sing Holdings Ltd ($3708)10.5%3.9%2.6%-4.3%-9.7%


Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Mega Expo Holdings Ltd ($1360)---1.4x0.6x0.7x
 
Median (1 company)-1.5x--1.4x0.6x0.7x