Trio-Tech International EBITDA surged on 32.4% and Revenue increased on 9.9%
09/25/2018 • About Trio-Tech International (
$TRT) • By InTwits
Trio-Tech International reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trio-Tech International has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has business model with low profitability: ROIC is 7.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 9.9%. Revenue growth showed slowdown in FY18Q4 - it was 1.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 358 pp from -332% to 25.5% in 2018.
Gross Margin increased slightly on 0.56 pp from 24.6% to 25.1% in FY2018. SG&A as a % of Revenue decreased slightly on 0.96 pp from 20.0% to 19.1% in FY2018. During FY2014-FY2018 SG&A as a % of Revenue topped in FY2015 at 22.3% and was declining since that time.
Net Income margin decreased slightly on 0.62 pp from 3.4% to 2.8% in FY2018. Net Income margin stuck to a growing trend at 0.72 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.5% in FY2018. Trio-Tech International's CAPEX/Revenue decreased on 2.5 pp from 7.9% in FY2015 to 5.5% in FY2018. It's average level of CAPEX/Revenue for the last three years was 5.4%. The company invested a large share of EBITDA (52.5%) to CAPEX.
Return on investment
The company operates at low ROIC (7.9%) and ROE (5.6%). ROIC increased on 2.3 pp from 5.6% to 7.9% in FY2018. ROE decreased slightly on 1.1 pp from 6.7% to 5.6% in FY2018. ROIC followed a growing trend at 1.7 pp per annum in FY2014-FY2018. ROE stuck to a growing trend at 1.5 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 1.0x Debt / EBITDA. Debt decreased on 9.9% while cash jumped on 37.0%.
Trio-Tech International has no short term refinancing risk: cash is higher than short term debt (245.8%).
Valuation and dividends
The company's trades at EV/EBITDA 2.8x and P/E 11.9x.
Financial and operational results
FY ended 06/30/2018
Trio-Tech International ($TRT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 36.262 | 33.932 | 34.454 | 38.538 | 42.361 | 9.9% |
| Gross Profit | 8.299 | 8.925 | 8.769 | 9.462 | 10.638 | 12.4% |
| SG&A | 0.732 | 7.565 | 7.125 | 7.718 | 8.076 | 4.6% |
| EBITDA | 2.302 | 3.447 | 3.298 | 3.325 | 4.402 | 32.4% |
| Net Income | 0.057 | 0.521 | 0.779 | 1.316 | 1.184 | -10.0% |
Balance Sheet
|
|---|
| Cash | 2.938 | 3.711 | 3.807 | 4.772 | 6.539 | 37.0% |
| Short Term Debt | 4.296 | 2.121 | 3.068 | 3.044 | 2.660 | -12.6% |
| Long Term Debt | 2.798 | 2.673 | 2.228 | 2.083 | 1.961 | -5.9% |
Cash flow
|
|---|
| Capex | 3.090 | 2.694 | 1.657 | 2.285 | 2.309 | 1.1% |
Ratios
|
|---|
| Revenue growth | 14.1% | -6.4% | 1.5% | 11.9% | 9.9% | |
| EBITDA growth | 46.3% | 49.7% | -4.3% | 0.8% | 32.4% | |
|
|---|
| Gross Margin | 22.9% | 26.3% | 25.5% | 24.6% | 25.1% | 0.6% |
| EBITDA Margin | 6.3% | 10.2% | 9.6% | 8.6% | 10.4% | 1.8% |
| SG&A, % of revenue | 2.0% | 22.3% | 20.7% | 20.0% | 19.1% | -1.0% |
| Net Income Margin | 0.2% | 1.5% | 2.3% | 3.4% | 2.8% | -0.6% |
| CAPEX, % of revenue | 8.5% | 7.9% | 4.8% | 5.9% | 5.5% | -0.5% |
|
|---|
| ROIC | 0.0% | 4.4% | 5.6% | 5.6% | 7.9% | 2.3% |
| ROE | 0.3% | 2.7% | 4.1% | 6.7% | 5.6% | -1.1% |
| Net Debt/EBITDA | 1.8x | 0.3x | 0.5x | 0.1x | -0.4x | -0.5x |
Trio-Tech International ($TRT) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 11 | 11 | 10 | 11 | | 22.0% | 15.9% | 2.8% | 1.1% |
| EBITDA | 1 | 1 | 1 | 1 | | 24.5% | 66.7% | -12.7% | 60.7% |
| Net Income | 1 | 1 | -1 | 1 | | 89.8% | 117.1% | -311.1% | 91.2% |
Balance Sheet
|
|---|
| Cash | 3 | 5 | 5 | 7 | | -24.4% | 16.7% | 34.1% | 37.0% |
| Short Term Debt | 2 | 3 | 2 | 3 | | 4.2% | 50.0% | -22.2% | -12.6% |
| Long Term Debt | 2 | 2 | 2 | 2 | | 3.9% | 22.3% | 23.0% | -5.9% |
Ratios
|
|---|
| Gross Margin | 25.2% | 26.5% | 22.1% | 26.5% | | -1.1% | 1.3% | -2.8% | 4.3% |
| EBITDA Margin | 9.6% | 11.5% | 8.0% | 12.4% | | 0.2% | 3.5% | -1.4% | 4.6% |
| Net Income Margin | 5.3% | 6.4% | -7.3% | 6.3% | | 1.9% | 3.0% | -10.9% | 3.0% |
Peers in Semiconductor Equipment
Below we provide Trio-Tech International benchmarking against other companies in Semiconductor 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 7.8% | 24.7% | 15.5% |
|---|
| Trio-Tech International ($TRT) | | -6.4% | 1.5% | 11.9% | 9.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.6% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Trio-Tech International ($TRT) | 22.9% | 26.3% | 25.5% | 24.6% | 25.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 7.0% | 9.9% | 12.1% | 16.2% | 16.6% |
|---|
| Trio-Tech International ($TRT) | 6.3% | 10.2% | 9.6% | 8.6% | 10.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.2% | 2.7% | 2.2% | 2.8% | 2.9% |
|---|
| Trio-Tech International ($TRT) | 8.5% | 7.9% | 4.8% | 5.9% | 5.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.5% | 6.0% | 7.6% | 13.1% | 12.1% |
|---|
| Trio-Tech International ($TRT) | 0.0% | 4.4% | 5.6% | 5.6% | 7.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.3x | -1.3x | -0.7x | -1.0x |
|---|
| Trio-Tech International ($TRT) | 1.8x | 0.3x | 0.5x | 0.1x | -0.4x |
