Man Wah Holdings Ltd Net Income jumped on 23.4% in 2016 and Revenue surged on 11.8%
25/05/2016 • About Man Wah Holdings Ltd (
$1999) • By InTwits
Man Wah Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Man Wah Holdings Ltd is a growth stock: FY2016 revenue growth was 11.8%, 5 year revenue CAGR was 14.0% at FY2016 ROIC 27.2%
- Man Wah Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.6%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 337 in FY2016, 663 in FY2015, 370 in FY2014, 400 in FY2013, 824 in FY2012
- The company has highly profitable business model: ROIC is at 27.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Man Wah Holdings Ltd ($1999) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,336 | 4,877 | 5,991 | 6,555 | 7,328 | 11.8% |
| Gross Profit | 1,475 | 1,771 | 2,131 | 2,333 | 2,896 | 24.1% |
| SG&A | 1,205 | 1,260 | 1,311 | 1,364 | 1,574 | 15.4% |
| EBITDA | 414 | 761 | 1,332 | 1,320 | 1,586 | 20.2% |
| Net Income | 303 | 568 | 977 | 1,075 | 1,327 | 23.4% |
Balance Sheet
|
|---|
| Cash | 1,190 | 1,655 | 2,362 | 1,599 | 1,448 | -9.5% |
| Short Term Debt | 583 | 746 | 543 | 938 | 250 | -73.3% |
| Long Term Debt | 0 | 0 | 251 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 824 | 400 | 370 | 663 | 337 | -49.2% |
Ratios
|
|---|
| Revenue growth | 13.9% | 12.5% | 22.8% | 9.4% | 11.8% | |
| EBITDA growth | -38.8% | 83.8% | 75.0% | -0.9% | 20.2% | |
| Gross Margin | 34.0% | 36.3% | 35.6% | 35.6% | 39.5% | 3.9% |
| EBITDA Margin | 9.6% | 15.6% | 22.2% | 20.1% | 21.6% | 1.5% |
| Net Income Margin | 7.0% | 11.7% | 16.3% | 16.4% | 18.1% | 1.7% |
| SG&A, % of revenue | 27.8% | 25.8% | 21.9% | 20.8% | 21.5% | 0.7% |
| CAPEX, % of revenue | 19.0% | 8.2% | 6.2% | 10.1% | 4.6% | -5.5% |
| ROIC | 9.4% | 15.6% | 24.6% | 21.5% | 27.2% | 5.8% |
| ROE | 9.7% | 17.3% | 24.8% | 24.3% | 29.1% | 4.8% |
| Net Debt/EBITDA | -1.5x | -1.2x | -1.2x | -0.5x | -0.8x | -0.3x |
Revenue and profitability
The company's Revenue jumped on 11.8%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.1 pp from 10.2% to 5.2% in FY2016.
Gross Margin increased on 3.9 pp from 35.6% to 39.5% in FY2016. SG&A as a % of Revenue increased slightly on 0.67 pp from 20.8% to 21.5% in FY2016.
Net Income marign increased slightly on 1.7 pp from 16.4% to 18.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.6% in FY2016. The company showed decline in CAPEX/Revenue of 3.6 pp from 8.2% in FY2013 to 4.6% in FY2016. It's average CAPEX/Revenue for the last three years was 7.0%.
Return on investment
The company operates at high and attractive ROIC (27.25%) and ROE (29.14%). ROIC increased on 5.8 pp from 21.5% to 27.2% in FY2016. ROE increased on 4.8 pp from 24.3% to 29.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is 0.2x. Net Debt / EBITDA dropped on 0.3x from -0.5x to -0.8x in FY2016. Debt dropped on 73.3% while cash decreased on 9.5%.
Appendix 1: Peers in Retail
Below we provide Man Wah Holdings Ltd benchmarking against other companies in Retail 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Nuclear Industry 23 International Corp Ltd ($611) | 1.4% | 85.6% | -42.1% | 419.8% | |
| Noble House China Holdings Ltd ($8246) | -5.0% | -20.2% | -24.8% | 117.2% | |
| Vongroup Ltd ($318) | -46.9% | 23.7% | -80.2% | 90.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 45.6% | 29.5% | 29.6% | 57.3% | |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | 54.9% | 72.8% | 23.0% | 48.3% | |
| |
|---|
| Median (115 companies) | 10.2% | 6.1% | 3.1% | -1.0% | 4.2% |
|---|
| Man Wah Holdings Ltd ($1999) | | 12.5% | 22.8% | 9.4% | 11.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (102 companies) | 37.7% | 36.4% | 35.3% | 33.6% | 48.4% |
|---|
| Man Wah Holdings Ltd ($1999) | 34.0% | 36.3% | 35.6% | 35.6% | 39.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (115 companies) | 10.8% | 7.3% | 8.9% | 7.1% | 9.2% |
|---|
| Man Wah Holdings Ltd ($1999) | 9.6% | 15.6% | 22.2% | 20.1% | 21.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (115 companies) | 4.1% | 3.6% | 3.7% | 3.1% | 1.9% |
|---|
| Man Wah Holdings Ltd ($1999) | 19.0% | 8.2% | 6.2% | 10.1% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | |
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | |
| Fairwood Holdings Ltd ($52) | 28.0% | 29.1% | 28.6% | 32.1% | |
| |
|---|
| Median (115 companies) | 12.3% | 8.5% | 8.4% | 5.8% | 14.2% |
|---|
| Man Wah Holdings Ltd ($1999) | 9.4% | 15.6% | 24.6% | 21.5% | 27.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | |
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| |
|---|
| Median (89 companies) | -0.5x | -0.6x | -0.2x | -0.5x | -0.6x |
|---|
| Man Wah Holdings Ltd ($1999) | -1.5x | -1.2x | -1.2x | -0.5x | -0.8x |
