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The numbers tell that HOSA International Ltd's growth is outstanding

13/03/2015 • About HOSA International Ltd ($2200) • By InTwits

HOSA International Ltd is an attractive growth stock in Apparel industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


HOSA International Ltd showed fast growth in the last financial year. The company's revenue surged on 19.1% in FY2014. EBITDA also increased: 6.33% for the same period.

If we look for the longer period the company showed fast revenue growth of 20.5% from 2011 to 2014 annualy. EBITDA surged on 12.4% from 2011 to 2014 annualy.

HOSA International Ltd ($2200) financials for the last 5 years

mln. CNY 2010 2011 2012 2013 2014
Revenue3486958481,0221,217
Revenue growth, %99.9%22.0%20.5%19.1%
Gross margin, %48.7%62.2%60.6%57.8%52.6%
SG&A, %19.1%17.6%18.2%
EBITDA118322376431458
EBITDA growth, %172.0%16.9%14.4%6.3%
EBITDA margin, %34.0%46.3%44.4%42.2%37.6%
Net Income116274331370403
Net Income margin, % 33.4%39.4%39.0%36.3%33.1%
 
CAPEX41341731
CAPEX/Revenue, %11.7%0.368%0.421%1.71%2.56%
Debt176621336148
Cash8463673133537
Net Debt/EBITDA0.8x-1.8x-1.6x-0.6x0.0x
 
ROIC, %31.4%44.2%34.6%32.0%28.2%
ROE, %55.6%46.6%34.3%30.3%26.5%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. In the last 3 years EBITDA margin dropped on 8.70 pp from 46.3% in 2011 to 37.6% in 2014.

We call HOSA International Ltd an attractive growth stock as together with the growth it delivers high ROIC at 28.2%. Three years ago it was considerably higher at 44.2%. For the last three years the average ROIC was 31.6%.

The company's Net Income margin decreased on 3.20 pp from 36.3% to 33.1% in 2014. In the longer period Net Income margin dropped on 6.30 pp from 39.4% in 2011 to 33.1% in 2014.

HOSA International Ltd operates at ROE of 26.5%. For the last three years the average ROE was 30.4%.

Capital expenditures (CAPEX)


In FY2014 the company had CAPEX/Revenue of 2.56%. CAPEX/Revenue surged on 2.19 pp from 0.368% in 2011 to 2.56% in 2014. For the last three years the average CAPEX/Revenue was 1.56%.

Leverage (Debt)


The company has low debt level at 0.0x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage surged on 1.80x from -1.78x in 2011 to 0.02x in 2014.

Peers in Apparel


Below you can find HOSA International Ltd benchmarking vs. other companies in Apparel 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, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Ares Asia Ltd ($645)60.9%144.2%
Cabbeen Fashion Ltd ($2030)204.4%5.6%0.4%16.4%
Sitoy Group Holdings Ltd ($1023)44.4%33.9%0.7%14.8%
Prada SpA ($1913)31.1%24.9%29.0%8.8%
Top Form International Ltd ($333)-0.2%-15.5%-6.9%7.3%
 
Median (17 companies)12.4%5.4%-0.7%1.4%
HOSA International Ltd ($2200)99.9%22.0%20.5%19.1%


Top companies by Gross margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Prada SpA ($1913)62.4%67.8%71.5%72.1%73.8%
Crocodile Garments ($122)63.3%65.5%64.7%60.7%60.4%
Cabbeen Fashion Ltd ($2030)21.2%31.9%40.5%41.3%42.1%
Tack Fiori International Group Ltd ($928)32.0%56.3%29.8%24.3%40.6%
Mascotte Holdings Ltd ($136)57.0%24.8%20.7%30.1%31.4%
 
Median (17 companies)21.4%19.8%17.6%16.7%16.5%
HOSA International Ltd ($2200)48.7%62.2%60.6%57.8%52.6%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Prada SpA ($1913)18.0%25.9%29.6%31.7%31.7%
Cabbeen Fashion Ltd ($2030)1.9%16.0%25.0%29.7%28.4%
Sitoy Group Holdings Ltd ($1023)12.4%15.0%14.6%15.7%17.3%
Highlight China IoT International Ltd ($1682)7.0%5.0%2.4%3.3%10.4%
UKF Holdings Ltd ($1468)30.0%17.3%10.4%9.7%9.9%
 
Median (17 companies)10.1%7.0%4.7%4.7%3.1%
HOSA International Ltd ($2200)34.0%46.3%44.4%42.2%37.6%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Prada SpA ($1913)8.5%9.2%9.7%10.6%15.3%
Mascotte Holdings Ltd ($136)0.3%0.4%74.2%45.0%12.2%
Tack Fiori International Group Ltd ($928)0.1%3.5%23.1%134.4%10.7%
UKF Holdings Ltd ($1468)0.4%0.0%0.0%5.6%9.3%
Tungtex Holdings ($518)0.6%0.7%1.0%4.7%6.2%
 
Median (17 companies)1.5%1.6%3.6%3.1%1.9%
HOSA International Ltd ($2200)11.7%0.4%0.4%1.7%2.6%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Prada SpA ($1913)11.3%24.6%32.1%37.4%34.0%
Sitoy Group Holdings Ltd ($1023)52.4%62.1%39.3%28.7%31.8%
Cabbeen Fashion Ltd ($2030)25.7%32.3%32.9%26.5%
UKF Holdings Ltd ($1468)89.3%42.2%19.9%8.5%
Kingmaker Footwear Holdings Ltd ($1170)13.3%11.5%4.1%6.7%4.4%
 
Median (17 companies)11.3%8.7%4.1%3.2%0.3%
HOSA International Ltd ($2200)31.4%44.2%34.6%32.0%28.2%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
UKF Holdings Ltd ($1468)0.1x0.9x1.2x-3.2x2.4x
Highlight China IoT International Ltd ($1682)-0.7x-0.2x-0.3x0.4x2.2x
Eagle Nice International Holdings Ltd ($2368)-1.5x-1.0x0.4x0.5x0.6x
Cabbeen Fashion Ltd ($2030)26.0x4.3x1.0x-0.3x0.5x
Prada SpA ($1913)1.7x0.8x-0.0x-0.3x-0.3x
 
Median (10 companies)-1.2x-1.0x0.2x-0.3x-1.2x
HOSA International Ltd ($2200)0.8x-1.8x-1.6x-0.6x0.0x


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