Hon Hai Precision Industry reports 10.4% EBITDA growth and almost no change in EBITDA Margin of 5.3%
30 Mar 2016 • About Hon Hai Precision Industry (
$HHPD) • By InTwits
Hon Hai Precision Industry reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.3% in 2015 vs. 5.1% in 2014 vs. 3.9% in 2011
- Hon Hai Precision Industry has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: 70,960 in 2015, 27,565 in 2014, 44,395 in 2013, 80,467 in 2012, 91,666 in 2011
- The company has business model with average profitability: ROIC is at 11.7%
- It operates with high leverage: Net Debt/EBITDA is -1.5x while industry average is -1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hon Hai Precision Industry ($HHPD) key annual financial indicators
| mln. TWD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,452,681 | 3,905,395 | 3,952,318 | 4,213,172 | 4,482,146 | 6.4% |
| Gross Profit | 266,382 | 250,249 | 254,695 | 291,944 | 320,592 | 9.8% |
| SG&A | 183,537 | 142,351 | 145,380 | 148,752 | 156,323 | 5.1% |
| EBITDA | 134,301 | 175,782 | 182,928 | 213,423 | 235,526 | 10.4% |
| Net Income | 81,591 | 94,642 | 106,697 | 130,535 | 146,867 | 12.5% |
Balance Sheet
|
|---|
| Cash | 329,794 | 505,527 | 694,027 | 679,037 | 657,138 | -3.2% |
| Short Term Debt | 271,512 | 355,790 | 400,442 | 254,774 | 122,903 | -51.8% |
| Long Term Debt | 115,979 | 105,688 | 132,164 | 158,842 | 172,010 | 8.3% |
Cash flow
|
|---|
| Capex | 91,666 | 80,467 | 44,395 | 27,565 | 70,960 | 157.4% |
Ratios
|
|---|
| Revenue growth | 15.2% | 13.1% | 1.2% | 6.6% | 6.4% | |
| EBITDA growth | 5.5% | 30.9% | 4.1% | 16.7% | 10.4% | |
| Gross Margin | 7.7% | 6.4% | 6.4% | 6.9% | 7.2% | 0.2% |
| EBITDA Margin | 3.9% | 4.5% | 4.6% | 5.1% | 5.3% | 0.2% |
| Net Income Margin | 2.4% | 2.4% | 2.7% | 3.1% | 3.3% | 0.2% |
| SG&A, % of revenue | 5.3% | 3.6% | 3.7% | 3.5% | 3.5% | -0.0% |
| CAPEX, % of revenue | 2.7% | 2.1% | 1.1% | 0.7% | 1.6% | 0.9% |
| ROIC | 8.8% | 9.9% | 8.7% | 10.3% | 11.7% | 1.4% |
| ROE | 15.4% | 15.5% | 15.1% | 15.4% | 15.2% | -0.2% |
| Net Debt/EBITDA | 0.4x | -0.3x | -0.9x | -1.2x | -1.5x | -0.3x |
Revenue and profitability
The company's Revenue increased on 6.4% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.6% in 2015. Hon Hai Precision Industry's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at good ROE (15.16%) while ROIC is low (11.71%). ROIC increased slightly on 1.4 pp from 10.3% to 11.7% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is -1.5x Net Debt / EBITDA and 1.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from -1.2x to -1.5x in 2015. Debt dropped on 28.7% in 2015 while cash decreased on 3.2% in 2015.
Appendix 1: Peers in Technology Hardware & Equipment
Below you can find Hon Hai Precision Industry benchmarking vs. other companies in Technology Hardware & Equipment 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 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Trakm8 Holdings ($TRAK) | | 24.6% | -8.9% | 93.5% | 94.2% |
| Mti Wireless Edge ($MWE) | | -13.5% | 5.6% | 6.8% | 36.5% |
| Concurrent Technologies ($CNC) | | -7.3% | -7.3% | 8.0% | 33.3% |
| Toumaz Ld ($TMZ) | | 279.7% | 150.3% | 19.5% | 22.1% |
| Seeing Machines ($SEE) | | 0.1% | 66.3% | 43.3% | 13.3% |
| |
|---|
| Median (18 companies) | -7.4% | 1.5% | 3.4% | 0.3% | 0.7% |
|---|
| Hon Hai Precision Industry ($HHPD) | | | 1.2% | 6.6% | 6.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cml Microsystems ($CML) | 69.5% | 69.3% | 70.3% | 73.3% | 70.9% |
| Concurrent Technologies ($CNC) | 52.1% | 51.7% | 50.6% | 51.2% | 50.6% |
| Trakm8 Holdings ($TRAK) | 66.6% | 63.8% | 71.9% | 57.2% | 45.2% |
| Vislink ($VLK) | 41.1% | 39.4% | 40.7% | 45.9% | 45.0% |
| Seeing Machines ($SEE) | 69.4% | 61.4% | 64.1% | 59.8% | 44.9% |
| |
|---|
| Median (17 companies) | 34.4% | 34.5% | 35.2% | 37.0% | 39.4% |
|---|
| Hon Hai Precision Industry ($HHPD) | | 6.4% | 6.4% | 6.9% | 7.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cml Microsystems ($CML) | 29.8% | 28.7% | 33.1% | 35.1% | 29.9% |
| Concurrent Technologies ($CNC) | 28.5% | 29.3% | 23.3% | 27.1% | 28.6% |
| Pure Wafer ($PUR) | 12.3% | 16.3% | 17.0% | 31.5% | 27.4% |
| Samsung Electronics Co ($SMSN) | 17.6% | 22.2% | 23.3% | 20.9% | 23.6% |
| Trakm8 Holdings ($TRAK) | 14.1% | 7.1% | 6.8% | 12.9% | 14.0% |
| |
|---|
| Median (18 companies) | 6.2% | 3.8% | 8.0% | 6.4% | 6.5% |
|---|
| Hon Hai Precision Industry ($HHPD) | | 4.5% | 4.6% | 5.1% | 5.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Samsung Electronics Co ($SMSN) | 13.3% | 11.4% | 10.1% | 10.7% | 12.9% |
| Pure Wafer ($PUR) | 2.0% | 0.5% | 3.5% | 23.3% | 8.5% |
| Sunplus Technology Co Ltd ($SUPD) | 7.2% | 4.8% | 6.3% | 15.0% | 4.5% |
| Seeing Machines ($SEE) | 3.4% | 0.3% | 2.2% | 1.0% | 3.9% |
| Telefonaktiebolaget Lm Ericsson ($0O87) | 2.2% | 2.4% | 2.0% | 2.3% | 3.4% |
| |
|---|
| Median (18 companies) | 2.1% | 2.2% | 2.0% | 2.3% | 1.8% |
|---|
| Hon Hai Precision Industry ($HHPD) | | 2.1% | 1.1% | 0.7% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Trakm8 Holdings ($TRAK) | 13.1% | 3.8% | 1.9% | 18.7% | 22.5% |
| Concurrent Technologies ($CNC) | 19.5% | 14.6% | 8.2% | 14.1% | 20.9% |
| Samsung Electronics Co ($SMSN) | 13.9% | 22.4% | 24.0% | 14.4% | 14.0% |
| Telefonaktiebolaget Lm Ericsson ($0O87) | 13.0% | 13.7% | 11.1% | 10.3% | 13.5% |
| Cml Microsystems ($CML) | 15.9% | 17.4% | 26.1% | 23.0% | 10.3% |
| |
|---|
| Median (18 companies) | -0.2% | 0.6% | 5.8% | 5.7% | 3.8% |
|---|
| Hon Hai Precision Industry ($HHPD) | | 9.9% | 8.7% | 10.3% | 11.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vislink ($VLK) | -3.4x | -1.2x | -0.5x | -0.0x | 1.8x |
| Mti Wireless Edge ($MWE) | 2.3x | -21.9x | 1.9x | -1.6x | 0.2x |
| Telefonaktiebolaget Lm Ericsson ($0O87) | 0.1x | -0.1x | 0.0x | -0.2x | 0.1x |
| Samsung Electronics Co ($SMSN) | -0.0x | -0.1x | -0.1x | -0.1x | -0.2x |
| Trakm8 Holdings ($TRAK) | -1.6x | -2.3x | -3.8x | -0.5x | -0.2x |
| |
|---|
| Median (14 companies) | -0.4x | -1.1x | -0.5x | -1.4x | -1.2x |
|---|
| Hon Hai Precision Industry ($HHPD) | | -0.3x | -0.9x | -1.2x | -1.5x |
