Nanjing Sinolife United Co Ltd demonstrated fast growth in recent years. Will the growth continue?
17/03/2015 • About Nanjing Sinolife United Co Ltd (
$3332) • By InTwits
Have you thought about Nanjing Sinolife United Co Ltd as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Nanjing Sinolife United Co Ltd showed fast growth in the last financial year. The company's revenue surged on 29.6% in FY2014. The growth also happened in EBITDA of 24.0% for the same period.
In the longer period the company showed fast revenue growth of 34.7% from 2011 to 2014 annualy. EBITDA surged on 40.7% from 2011 to 2014 annualy.
Nanjing Sinolife United Co Ltd ($3332) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 67 | 103 | 150 | 195 | 252 |
|---|
| Revenue growth, % | | 54.4% | 45.6% | 29.5% | 29.6% |
|---|
| Gross margin, % | 79.7% | 80.6% | 86.5% | 89.3% | 90.9% |
|---|
| SG&A, % | 49.3% | 35.2% | 36.4% | 34.3% | 38.5% |
|---|
| EBITDA | 23 | 49 | 78 | 111 | 137 |
|---|
| EBITDA growth, % | | 112.0% | 57.4% | 42.7% | 24.0% |
|---|
| EBITDA margin, % | 34.8% | 47.8% | 51.6% | 56.9% | 54.4% |
|---|
| Net Income | 16 | 35 | 57 | 71 | 108 |
|---|
| Net Income margin, % | 23.6% | 33.7% | 38.1% | 36.3% | 42.7% |
|---|
| |
| CAPEX | 1 | 0 | 2 | 3 | 10 |
|---|
| CAPEX/Revenue, % | 0.823% | 0.238% | 1.59% | 1.51% | 4.01% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 31 | 56 | 84 | 145 | 329 |
|---|
| Net Debt/EBITDA | -1.3x | -1.1x | -1.1x | -1.3x | -2.4x |
|---|
| |
| ROIC, % | | 57.4% | 67.3% | 68.1% | 32.2% |
|---|
| ROE, % | | 44.7% | 53.3% | 46.7% | 26.6% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 56.9% in FY2013 to 54.4% in FY2014. In the last 3 years the company showed fast EBITDA margin growth of 6.60 pp from 47.8% in 2011 to 54.4% in 2014.
We call Nanjing Sinolife United Co Ltd an attractive growth stock as together with the growth it delivers high ROIC at 32.2%. Three years ago it was considerably higher at 57.4%. For the last three years the average ROIC was 55.9%.
Net Income margin surged on 6.40 pp from 36.3% to 42.7% in 2014. If we look for the longer period the company's Net Income margin surged on 9 pp from 33.7% in 2011 to 42.7% in 2014.
Nanjing Sinolife United Co Ltd operates at ROE of 26.6%. Average ROE for the last three years was 42.2%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 4.01% in FY2014. CAPEX/Revenue surged on 3.77 pp from 0.238% in 2011 to 4.01% in 2014. For the last three years the average CAPEX/Revenue was 2.37%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -2.4x Net Debt/EBITDA. In the last 3 years Nanjing Sinolife United Co Ltd showed fast leverage growth of 1.27x from -1.13x in 2011 to -2.40x in 2014.
Peers in Retail
Below we provide Nanjing Sinolife United Co 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Ming Fung Jewellery Group Ltd ($860) | | 21.9% | 3.3% | -14.9% | 54.3% |
| Luk Fook Holdings International Ltd ($590) | | 50.2% | 47.2% | 12.6% | 43.3% |
| Tsui Wah Holdings Ltd ($1314) | | 35.9% | 27.5% | 42.2% | 35.9% |
| Chow Tai Fook Jewellery Group Ltd ($1929) | | 52.8% | 61.4% | 1.5% | 34.8% |
| Man Wah Holdings Ltd ($1999) | | 29.9% | 13.9% | 12.5% | 22.8% |
| |
|---|
| Median (48 companies) | | 19.7% | 13.8% | 3.3% | 3.1% |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | | 54.4% | 45.6% | 29.5% | 29.6% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.0% | 77.5% | 91.1% | 99.4% | 99.5% |
| Modern Beauty Salon Holdings Ltd ($919) | 96.4% | 97.3% | 97.4% | 95.9% | 96.8% |
| Vongroup Ltd ($318) | | | | | 95.1% |
| Moiselle International Holdings Ltd ($130) | 80.5% | 81.4% | 81.2% | 83.8% | 80.6% |
| Tsui Wah Holdings Ltd ($1314) | 69.6% | 69.4% | 69.0% | 69.4% | 69.3% |
| |
|---|
| Median (45 companies) | 49.2% | 46.0% | 46.2% | 47.2% | 46.5% |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | 79.7% | 80.6% | 86.5% | 89.3% | 90.9% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Maoye International Holdings Ltd ($848) | 50.9% | 45.5% | 47.4% | 46.3% | 73.2% |
| Coach Inc ($6388) | 35.4% | 34.4% | 34.5% | 33.2% | 27.2% |
| Combest Holdings Ltd ($8190) | 0.4% | 24.5% | -2.7% | 29.7% | 26.5% |
| New World Department Store China Ltd ($825) | 51.7% | 49.3% | 31.5% | 29.2% | 24.5% |
| ANTA Sports Products Ltd ($2020) | 24.6% | 23.6% | 21.9% | 23.3% | 24.4% |
| |
|---|
| Median (48 companies) | 12.7% | 13.5% | 11.9% | 8.4% | 10.2% |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | 34.8% | 47.8% | 51.6% | 56.9% | 54.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Maoye International Holdings Ltd ($848) | 46.1% | 30.9% | 32.8% | 24.1% | 31.5% |
| Tsui Wah Holdings Ltd ($1314) | 3.4% | 5.2% | 8.3% | 9.3% | 30.5% |
| Culture Landmark Investment Ltd ($674) | 13.2% | 4.6% | 11.6% | 19.4% | 15.7% |
| Sincere Co Ltd/The ($244) | 0.7% | 3.9% | 2.9% | 3.7% | 12.0% |
| New World Department Store China Ltd ($825) | 26.1% | 27.4% | 12.1% | 39.4% | 11.2% |
| |
|---|
| Median (48 companies) | 2.7% | 3.6% | 3.7% | 3.3% | 3.0% |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | 0.8% | 0.2% | 1.6% | 1.5% | 4.0% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | -24.3% | 48.1% | 50.7% | -4.6% | 81.3% |
| Starbucks Corp ($4337) | 35.2% | 36.4% | 36.4% | -6.0% | 52.8% |
| Sa Sa International Holdings Ltd ($178) | 39.2% | 45.7% | 53.5% | 52.7% | 49.0% |
| Coach Inc ($6388) | 73.9% | 82.0% | 82.3% | 68.7% | 45.0% |
| Luk Fook Holdings International Ltd ($590) | 36.3% | 36.6% | 34.1% | 24.3% | 30.6% |
| |
|---|
| Median (48 companies) | 13.4% | 17.7% | 12.3% | 6.3% | 8.4% |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | | 57.4% | 67.3% | 68.1% | 32.2% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.7x | -0.8x | 0.6x | 4.0x | 9.3x |
| Tse Sui Luen Jewellery International Ltd ($417) | -0.1x | 0.4x | 1.2x | 2.2x | 3.7x |
| Parkson Retail Group Ltd ($3368) | 1.2x | 0.4x | 0.8x | 2.3x | 3.6x |
| Maoye International Holdings Ltd ($848) | 2.0x | 1.7x | 2.9x | 3.3x | 3.4x |
| Bosideng International Holdings Ltd ($3998) | -2.5x | -0.6x | -0.1x | 0.5x | 1.1x |
| |
|---|
| Median (34 companies) | -0.8x | -1.0x | -0.7x | -1.1x | -0.9x |
|---|
| Nanjing Sinolife United Co Ltd ($3332) | -1.3x | -1.1x | -1.1x | -1.3x | -2.4x |
