Tse Sui Luen Jewellery International Ltd reports 9.9% EBITDA decline and 4.6% Revenue decline
29/05/2015 • About Tse Sui Luen Jewellery International Ltd (
$417) • By InTwits
Tse Sui Luen Jewellery International Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.5% in FY2015, 4.8% in FY2014, 5.4% in FY2013, 8.7% in FY2012, 10.3% in FY2011
- Tse Sui Luen Jewellery International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 8.9%.
- CAPEX is quite volatile: 49.4 in 2015, 12.3 in 2014, 35.9 in 2013, 115 in 2012, 147 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.2%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tse Sui Luen Jewellery International Ltd ($417) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,518 | 3,359 | 3,563 | 4,057 | 3,871 | -4.6% |
| Gross Profit | 1,293 | 1,609 | 1,668 | 1,774 | 1,799 | 1.4% |
| SG&A | | | 1,537 | 1,632 | 1,687 | 3.4% |
| EBITDA | 258 | 292 | 193 | 194 | 175 | -9.9% |
| Net Income | 176 | 162 | 68 | 75 | 40 | -46.7% |
Balance Sheet
|
|---|
| Cash | 122 | 103 | 206 | 141 | 130 | -7.6% |
| Short Term Debt | 214 | 437 | 374 | 579 | 617 | 6.7% |
| Long Term Debt | 2 | 3 | 257 | 279 | 307 | 10.0% |
Cash flow
|
|---|
| Capex | 44 | 61 | 41 | 56 | 57 | 0.9% |
Ratios
|
|---|
| Revenue growth | 24.8% | 33.4% | 6.1% | 13.9% | -4.6% | |
| EBITDA growth | 5.4% | 13.0% | -33.8% | 0.4% | -9.9% | |
| Gross Margin | 51.3% | 47.9% | 46.8% | 43.7% | 46.5% | 2.7% |
| EBITDA Margin | 10.3% | 8.7% | 5.4% | 4.8% | 4.5% | -0.3% |
| Net Income Margin | 7.0% | 4.8% | 1.9% | 1.8% | 1.0% | -0.8% |
| SG&A, % of revenue | | | 43.1% | 40.2% | 43.6% | 3.4% |
| CAPEX, % of revenue | 1.8% | 1.8% | 1.2% | 1.4% | 1.5% | 0.1% |
| ROIC | 20.2% | 18.1% | 9.1% | 8.2% | 6.2% | -2.0% |
| ROE | 24.5% | 18.6% | 7.1% | 7.2% | 3.7% | -3.6% |
| Net Debt/EBITDA | 0.4x | 1.2x | 2.2x | 3.7x | 4.5x | 0.8x |
Revenue and profitability
The company's Revenue decreased on 4.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 24.5 pp from 33.5% to 58.0% in 2015.
Gross Margin increased on 2.7 pp from 43.7% to 46.5% in FY2015. SG&A as a % of Revenue increased on 3.4 pp from 40.2% to 43.6% in FY2015.
Net Income marign decreased slightly on 0.81 pp from 1.8% to 1.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Tse Sui Luen Jewellery International Ltd had CAPEX/Revenue of 1.5%. Tse Sui Luen Jewellery International Ltd showed almost no change in CAPEX/Revenue from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 1.3%.
Return on investment
The company operates at low ROIC (6.16%) and ROE (3.67%). ROIC decreased on 2.0 pp from 8.2% to 6.2% in FY2015. ROE decreased on 3.6 pp from 7.2% to 3.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.5x and Debt / EBITDA is 5.3x. Net Debt / EBITDA jumped on 0.8x from 3.7x to 4.5x in FY2015. Debt increased on 7.8% in FY2015 while cash decreased on 7.6% in FY2015.
Appendix 1: Peers in Retail
Below we provide Tse Sui Luen Jewellery International 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% | 3.4% |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | | 33.4% | 6.1% | 13.9% | -4.6% |
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% | 37.7% | 38.0% | 35.6% | 60.5% |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | 51.3% | 47.9% | 46.8% | 43.7% | 46.5% |
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) | 13.4% | 10.3% | 7.3% | 8.8% | 11.6% |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | 10.3% | 8.7% | 5.4% | 4.8% | 4.5% |
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) | 3.9% | 4.1% | 3.6% | 3.5% | 2.9% |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | 1.8% | 1.8% | 1.2% | 1.4% | 1.5% |
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% | 11.8% | 8.1% | 8.3% | 11.3% |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | 20.2% | 18.1% | 9.1% | 8.2% | 6.2% |
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 | -0.3x | -1.1x |
|---|
| Tse Sui Luen Jewellery International Ltd ($417) | 0.4x | 1.2x | 2.2x | 3.7x | 4.5x |
