Trio-Tech International revenue dropped on 12.1% and EBITDA Margin showed almost no change
09/23/2020 • About Trio-Tech International (
$TRT) • By InTwits
Trio-Tech International reported FY2020 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 5.3%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $1m in FY2020, $3m in FY2019, $2m in FY2018, $2m in FY2017, $2m in FY2016
- The company has unprofitable business model: ROIC is -2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Trio-Tech International's Revenue dropped on 12.1%. During the last 5 years Revenue growth topped in FY2017 at 11.9% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.9 pp from -6.2% to -1.2% in FY2020.
Gross Margin decreased slightly on 1.9 pp from 23.0% to 21.1% in FY2020. Gross Margin stuck to a declining trend at -1.0 pp per annum in FY2016-FY2020. SG&A as a % of Revenue increased on 2.1 pp from 20.1% to 22.2% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2018 at 19.1% and was growing since that time.
Net Income margin decreased slightly on 1.1 pp from 3.9% to 2.8% in FY2020.
Investments (CAPEX, working capital and M&A)
Trio-Tech International's CAPEX/Revenue was 3.0% in FY2020. CAPEX/Revenue decreased on 3.0 pp from 5.9% in FY2017 to 3.0% in FY2020. It's average level of CAPEX/Revenue for the last three years was 5.2%.
Return on investment
The company operates at negative ROIC (-2.8%) and low but positive ROE (4.1%). ROIC decreased on 5.5 pp from 2.7% to -2.8% in FY2020. ROE decreased on 2.7 pp from 6.8% to 4.1% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.1x and Debt / EBITDA is 1.3x. Debt increased on 8.0% while cash dropped on 14.7%.
Trio-Tech International has no short term refinancing risk: cash is higher than short term debt (332.0%).
Valuation and dividends
The company's trades at EV/EBITDA 3.4x and P/E 10.6x.
Financial and operational results
FY ended 06/30/2020
Trio-Tech International ($TRT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 34.454 | 38.538 | 42.361 | 39.198 | 34.465 | -12.1% |
| Gross Profit | 8.769 | 9.462 | 10.638 | 9.001 | 7.266 | -19.3% |
| SG&A | 7.125 | 7.718 | 8.076 | 7.875 | 7.655 | -2.8% |
| EBITDA | 3.298 | 3.325 | 4.402 | 3.244 | 2.968 | -8.5% |
| Net Income | 0.779 | 1.316 | 1.184 | 1.545 | 0.966 | -37.5% |
Balance Sheet
|
|---|
| Cash | 3.807 | 4.772 | 6.539 | 4.863 | 4.150 | -14.7% |
| Short Term Debt | 3.068 | 3.044 | 2.660 | 0.958 | 1.250 | 30.5% |
| Long Term Debt | 2.228 | 2.083 | 1.961 | 2.734 | 2.738 | 0.1% |
Cash flow
|
|---|
| Capex | 1.657 | 2.285 | 2.309 | 2.841 | 1.017 | -64.2% |
Ratios
|
|---|
| Revenue growth | 1.5% | 11.9% | 9.9% | -7.5% | -12.1% | |
| EBITDA growth | -4.3% | 0.8% | 32.4% | -26.3% | -8.5% | |
|
|---|
| Gross Margin | 25.5% | 24.6% | 25.1% | 23.0% | 21.1% | -1.9% |
| EBITDA Margin | 9.6% | 8.6% | 10.4% | 8.3% | 8.6% | 0.3% |
| SG&A, % of revenue | 20.7% | 20.0% | 19.1% | 20.1% | 22.2% | 2.1% |
| Net Income Margin | 2.3% | 3.4% | 2.8% | 3.9% | 2.8% | -1.1% |
| CAPEX, % of revenue | 4.8% | 5.9% | 5.5% | 7.2% | 3.0% | -4.3% |
|
|---|
| ROIC | 5.6% | 5.6% | 7.9% | 2.7% | -2.8% | -5.5% |
| ROE | 4.1% | 6.7% | 5.6% | 6.8% | 4.1% | -2.7% |
| Net Debt/EBITDA | 0.5x | 0.1x | -0.4x | -0.4x | -0.1x | 0.3x |
Trio-Tech International ($TRT) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 10 | 9 | 9 | 7 | | - | - | - | - |
| EBITDA | 1 | 1 | 1 | 0 | | - | - | - | - |
| Net Income | 0 | 0 | 0 | 0 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 4 | 5 | 4 | 4 | | - | - | - | - |
| Short Term Debt | 1 | 2 | 2 | 1 | | - | - | - | - |
| Long Term Debt | 3 | 3 | 3 | 3 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 22.9% | 21.3% | 21.0% | 18.4% | | - | - | - | - |
| EBITDA Margin | 12.0% | 8.9% | 6.8% | 5.5% | | - | - | - | - |
| Net Income Margin | 2.8% | 4.7% | 0.8% | 2.7% | | - | - | - | - |
Peers in Semiconductor Equipment
Below you can find Trio-Tech International benchmarking vs. other companies in Semiconductor 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.7% | 15.5% | -0.2% | 16.9% |
|---|
| Trio-Tech International ($TRT) | - | 11.9% | 9.9% | -7.5% | -12.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 40.0% | 44.0% | 41.2% | 40.5% | 42.7% |
|---|
| Trio-Tech International ($TRT) | 25.5% | 24.6% | 25.1% | 23.0% | 21.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 12.1% | 16.2% | 16.6% | 12.9% | 15.9% |
|---|
| Trio-Tech International ($TRT) | 9.6% | 8.6% | 10.4% | 8.3% | 8.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| |
|---|
| Median (24 companies) | 2.2% | 2.8% | 2.9% | 3.2% | 3.9% |
|---|
| Trio-Tech International ($TRT) | 4.8% | 5.9% | 5.5% | 7.2% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 7.6% | 13.1% | 12.1% | 5.6% | 10.5% |
|---|
| Trio-Tech International ($TRT) | 5.6% | 5.6% | 7.9% | 2.7% | -2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| |
|---|
| Median (23 companies) | -1.3x | -0.7x | -1.0x | -0.4x | -0.4x |
|---|
| Trio-Tech International ($TRT) | 0.5x | 0.1x | -0.4x | -0.4x | -0.1x |
