Man Wah Holdings Ltd reports 79.1% CAPEX growth and 9.4% Revenue growth
20/05/2015 • About Man Wah Holdings Ltd (
$1999) • By InTwits
Man Wah Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Man Wah Holdings Ltd is a fast growth stock: FY2015 revenue growth was 9.4%, 5 year revenue CAGR was 17.5% at FY2015 ROIC 21.5%
- Man Wah Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: 663 in FY2015, 370 in FY2014, 400 in FY2013, 824 in FY2012, 402 in FY2011
- The company has highly profitable business model: ROIC is at 21.5%
- It operates with high leverage: Net Debt/EBITDA is -0.5x while industry average is -0.6x
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 | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,808 | 4,336 | 4,877 | 5,991 | 6,555 | 9.4% |
| Gross Profit | 1,617 | 1,475 | 1,771 | 2,131 | 2,333 | 9.5% |
| SG&A | 1,020 | 1,205 | 1,260 | 1,311 | 1,364 | 4.0% |
| EBITDA | 677 | 414 | 761 | 1,332 | 1,320 | -0.9% |
| Net Income | 622 | 303 | 568 | 977 | 1,075 | 10.1% |
Balance Sheet
|
|---|
| Cash | 1,611 | 1,190 | 1,655 | 2,362 | 1,599 | -32.3% |
| Short Term Debt | 18 | 583 | 746 | 543 | 938 | 72.7% |
| Long Term Debt | 0 | 0 | 0 | 251 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 402 | 824 | 400 | 370 | 663 | 79.1% |
Ratios
|
|---|
| Revenue growth | 29.9% | 13.9% | 12.5% | 22.8% | 9.4% | |
| EBITDA growth | -5.7% | -38.8% | 83.8% | 75.0% | -0.9% | |
| Gross Margin | 42.5% | 34.0% | 36.3% | 35.6% | 35.6% | 0.0% |
| EBITDA Margin | 17.8% | 9.6% | 15.6% | 22.2% | 20.1% | -2.1% |
| Net Income Margin | 16.3% | 7.0% | 11.7% | 16.3% | 16.4% | 0.1% |
| SG&A, % of revenue | 26.8% | 27.8% | 25.8% | 21.9% | 20.8% | -1.1% |
| CAPEX, % of revenue | 10.6% | 19.0% | 8.2% | 6.2% | 10.1% | 3.9% |
| ROIC | 27.9% | 9.4% | 15.6% | 24.6% | 21.5% | -3.2% |
| ROE | 29.3% | 9.7% | 17.3% | 24.8% | 24.3% | -0.5% |
| Net Debt/EBITDA | -2.4x | -1.5x | -1.2x | -1.2x | -0.5x | 0.7x |
Revenue and profitability
Man Wah Holdings Ltd's Revenue increased on 9.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 31.1 pp from 24.6% to 55.7% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 21.9% to 20.8% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Man Wah Holdings Ltd had CAPEX/Revenue of 10.1%. The company showed decline in CAPEX/Revenue of 8.9 pp from 19.0% in FY2012 to 10.1% in FY2015. Average CAPEX/Revenue for the last three years was 8.2%.The company maintained rich investment policy and has spent a big chunk of EBITDA (50.3%) to CAPEX.
Return on investment
The company operates at high and attractive ROIC (21.45%) and ROE (24.30%). ROIC decreased on 3.2 pp from 24.6% to 21.5% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 0.7x. Net Debt / EBITDA jumped on 0.7x from -1.2x to -0.5x in FY2015. Debt jumped on 18.1% in FY2015 while cash dropped on 32.3% in FY2015.
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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | 50.2% | 47.2% | 12.6% | 43.3% | |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (108 companies) | 20.8% | 9.9% | 5.7% | 2.7% | |
|---|
| Man Wah Holdings Ltd ($1999) | | 13.9% | 12.5% | 22.8% | 9.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | |
| Vongroup Ltd ($318) | | | | 95.1% | |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (97 companies) | 40.0% | 38.0% | 39.9% | 39.5% | |
|---|
| Man Wah Holdings Ltd ($1999) | 42.5% | 34.0% | 36.3% | 35.6% | 35.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (108 companies) | 13.2% | 10.3% | 7.1% | 8.3% | |
|---|
| Man Wah Holdings Ltd ($1999) | 17.8% | 9.6% | 15.6% | 22.2% | 20.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | |
| |
|---|
| Median (108 companies) | 3.8% | 4.0% | 3.6% | 3.4% | |
|---|
| Man Wah Holdings Ltd ($1999) | 10.6% | 19.0% | 8.2% | 6.2% | 10.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (108 companies) | 16.6% | 11.9% | 8.1% | 8.2% | |
|---|
| Man Wah Holdings Ltd ($1999) | 27.9% | 9.4% | 15.6% | 24.6% | 21.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (84 companies) | -0.8x | -0.6x | -0.9x | -0.2x | |
|---|
| Man Wah Holdings Ltd ($1999) | -2.4x | -1.5x | -1.2x | -1.2x | -0.5x |
