Tatung Co Net Debt / EBITDA surged on 33.4x from 6.7x to 40.1x in 2015 while Revenue dropped on 15.9%
31 Mar 2016 • About Tatung Co (
$TAT) • By InTwits
Tatung Co reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tatung Co is a company in decline: 2015 revenue growth was -15.9%, 5 years revenue CAGR was -9.7%
- EBITDA Margin is quite volatile: 2.1% in 2015, 9.2% in 2014, 9.2% in 2013, 1.5% in 2012, 6.5% in 2011
- Tatung Co has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.0%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: 6,387 in 2015, 4,798 in 2014, 4,804 in 2013, 6,514 in 2012, 12,392 in 2011
- The company has unprofitable business model: ROIC is at -5.7%
- It operates with high leverage: Net Debt/EBITDA is 40.1x while industry average is 0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tatung Co ($TAT) key annual financial indicators
| mln. TWD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 146,250 | 106,099 | 112,927 | 112,609 | 94,744 | -15.9% |
| Gross Profit | 7,127 | 525 | 12,278 | 15,884 | 6,044 | -61.9% |
| SG&A | | 15,919 | 16,044 | 16,618 | 15,419 | -7.2% |
| EBITDA | 9,453 | 1,631 | 10,404 | 10,380 | 1,997 | -80.8% |
| Net Income | 1,380 | -4,019 | -1,611 | 364 | -3,075 | -945.9% |
Balance Sheet
|
|---|
| Cash | 31,181 | 24,401 | 23,193 | 30,140 | 27,131 | -10.0% |
| Short Term Debt | 51,793 | 55,926 | 66,410 | 56,084 | 71,822 | 28.1% |
| Long Term Debt | 45,884 | 35,531 | 20,457 | 43,171 | 35,285 | -18.3% |
Cash flow
|
|---|
| Capex | 12,392 | 6,514 | 4,804 | 4,798 | 6,387 | 33.1% |
Ratios
|
|---|
| Revenue growth | -7.4% | -27.5% | 6.4% | -0.3% | -15.9% | |
| EBITDA growth | -28.3% | -82.7% | 538.0% | -0.2% | -80.8% | |
| Gross Margin | 4.9% | 0.5% | 10.9% | 14.1% | 6.4% | -7.7% |
| EBITDA Margin | 6.5% | 1.5% | 9.2% | 9.2% | 2.1% | -7.1% |
| Net Income Margin | 0.9% | -3.8% | -1.4% | 0.3% | -3.2% | -3.6% |
| SG&A, % of revenue | | 15.0% | 14.2% | 14.8% | 16.3% | 1.5% |
| CAPEX, % of revenue | 8.5% | 6.1% | 4.3% | 4.3% | 6.7% | 2.5% |
| ROIC | -6.4% | -9.1% | -2.4% | -0.5% | -5.7% | -5.2% |
| ROE | 4.3% | -12.1% | -4.8% | 1.1% | -9.5% | -10.5% |
| Net Debt/EBITDA | 7.0x | 41.1x | 6.1x | 6.7x | 40.1x | 33.4x |
Revenue and profitability
The company's Revenue dropped on 15.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.1 pp from 9.2% to 2.1% in 2015.
Gross Margin decreased on 7.7 pp from 14.1% to 6.4% in 2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 14.8% to 16.3% in 2015.
Net Income marign decreased on 3.6 pp from 0.32% to -3.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
Tatung Co's CAPEX/Revenue was 6.7% in 2015. Tatung Co's CAPEX/Revenue increased slightly on 0.60 pp from 6.1% in 2012 to 6.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 5.1%.Battling declining revenue Tatung Co made large investments to CAPEX (320% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-5.70%) and ROE (-9.47%). ROIC decreased on 5.2 pp from -0.46% to -5.7% in 2015. ROE dropped on 10.5 pp from 1.1% to -9.5% in 2015.
Leverage (Debt)
Debt level is 40.1x Net Debt / EBITDA and 53.6x Debt / EBITDA. Net Debt / EBITDA jumped on 33.4x from 6.7x to 40.1x in 2015. Debt increased on 7.9% in 2015 while cash decreased on 10.0% in 2015.
Appendix 1: Peers in Technology Hardware & Equipment
Below we provide Tatung Co benchmarking against other companies in Technology Hardware & Equipment 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 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 ($SEE) | | 0.1% | 66.3% | 43.3% | 13.3% |
| |
|---|
| Median (19 companies) | | 2.6% | 1.3% | 3.4% | 1.1% |
|---|
| Tatung Co ($TAT) | | -27.5% | 6.4% | -0.3% | -15.9% |
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 ($SEE) | 69.4% | 61.4% | 64.1% | 59.8% | 44.9% |
| |
|---|
| Median (18 companies) | 34.8% | 34.5% | 35.2% | 37.0% | 38.9% |
|---|
| Tatung Co ($TAT) | 4.9% | 0.5% | 10.9% | 14.1% | 6.4% |
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 ($TRAK) | 14.1% | 7.1% | 6.8% | 12.9% | 14.0% |
| |
|---|
| Median (19 companies) | 6.0% | 4.5% | 6.8% | 5.6% | 5.6% |
|---|
| Tatung Co ($TAT) | 6.5% | 1.5% | 9.2% | 9.2% | 2.1% |
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 ($0O87) | 2.2% | 2.4% | 2.0% | 2.3% | 3.4% |
| |
|---|
| Median (19 companies) | 2.0% | 2.1% | 2.0% | 1.9% | 1.8% |
|---|
| Tatung Co ($TAT) | 8.5% | 6.1% | 4.3% | 4.3% | 6.7% |
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 ($0O87) | 13.0% | 13.7% | 11.1% | 10.3% | 13.5% |
| Hon Hai Precision Industry ($HHPD) | | 9.9% | 8.7% | 10.3% | 11.7% |
| |
|---|
| Median (19 companies) | 1.2% | 0.7% | 6.0% | 6.7% | 4.3% |
|---|
| Tatung Co ($TAT) | -6.4% | -9.1% | -2.4% | -0.5% | -5.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vislink ($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 ($TRAK) | -1.6x | -2.3x | -3.8x | -0.5x | -0.2x |
| |
|---|
| Median (15 companies) | -0.6x | -1.1x | -0.8x | -1.4x | -1.4x |
|---|
| Tatung Co ($TAT) | 7.0x | 41.1x | 6.1x | 6.7x | 40.1x |
