Artini China Co Ltd revenue dropped on 55.1% in 2015 and EBITDA Margin dropped on 158 pp from -49.7% to -208%
19/06/2015 • About Artini China Co Ltd (
$789) • By InTwits
Artini China Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Artini China Co Ltd is a company in decline: FY2015 revenue growth was -55.1%, 5 years revenue CAGR was -26.7%
- The company operates at negative EBITDA Margin: -207.6%
- Artini China Co Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -48.5% for the sames years0
- Artini China Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 2.1 in FY2015, 5.9 in FY2014, 1.2 in FY2013, 19.8 in FY2012, 19.0 in FY2011
- The company has unprofitable business model: ROIC is at -134.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Artini China Co Ltd ($789) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 362.9 | 323.3 | 191.2 | 173.2 | 77.7 | -55.1% |
| Gross Profit | 145.1 | 73.7 | 43.8 | 18.2 | -18.7 | -202.6% |
| SG&A | | | 133.5 | 108.9 | 137.7 | 26.5% |
| EBITDA | -118.6 | -97.2 | -84.2 | -86.0 | -161.3 | 87.5% |
| Net Income | -176.6 | -143.3 | -109.0 | -108.3 | -91.0 | -16.0% |
Balance Sheet
|
|---|
| Cash | 131.1 | 96.2 | 52.5 | 11.7 | 122.8 | 948.2% |
| Short Term Debt | 25.0 | 21.2 | 21.1 | 26.4 | 0.0 | -100.0% |
| Long Term Debt | 1.1 | 0.1 | 0.3 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 19.0 | 19.8 | 1.2 | 5.9 | 2.1 | -64.5% |
Ratios
|
|---|
| Revenue growth | -0.9% | -10.9% | -40.9% | -9.4% | -55.1% | |
| EBITDA growth | 60.3% | -18.1% | -13.3% | 2.1% | 87.5% | |
| Gross Margin | 40.0% | 22.8% | 22.9% | 10.5% | -24.0% | -34.6% |
| EBITDA Margin | -32.7% | -30.1% | -44.0% | -49.7% | -207.6% | -157.9% |
| Net Income Margin | -48.6% | -44.3% | -57.0% | -62.5% | -117.1% | -54.6% |
| SG&A, % of revenue | | | 69.8% | 62.9% | 177.2% | 114.4% |
| CAPEX, % of revenue | 5.2% | 6.1% | 0.7% | 3.4% | 2.7% | -0.7% |
| ROIC | -32.1% | -36.6% | -42.8% | -68.1% | -134.5% | -66.5% |
| ROE | -41.3% | -44.0% | -53.0% | -102.7% | -96.0% | 6.6% |
Revenue and profitability
The company's Revenue dropped on 55.1% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 158 pp from -49.7% to -208% in FY2015.
Gross Margin dropped on 34.6 pp from 10.5% to -24.0% in FY2015. SG&A as a % of Revenue jumped on 114 pp from 62.9% to 177% in FY2015.
Net Income marign dropped on 54.6 pp from -62.5% to -117% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Artini China Co Ltd's CAPEX/Revenue was 2.7% in FY2015. The company showed decline in CAPEX/Revenue of 3.5 pp from 6.1% in FY2012 to 2.7% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at negative ROIC (-134.54%) and ROE (-96.03%). ROIC dropped on 66.5 pp from -68.1% to -135% in FY2015. ROE increased on 6.6 pp from -103% to -96.0% in FY2015.
Leverage (Debt)
The company paid down all the debt in FY2015. Cash jumped on 948% in FY2015.
Appendix 1: Peers in Retail
Below we provide Artini China 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, %
| 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) | 21.2% | 10.2% | 5.9% | 2.9% | -0.9% |
|---|
| Artini China Co Ltd ($789) | | -10.9% | -40.9% | -9.4% | -55.1% |
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) | 40.8% | 38.0% | 39.9% | 39.5% | 47.5% |
|---|
| Artini China Co Ltd ($789) | 40.0% | 22.8% | 22.9% | 10.5% | -24.0% |
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% | 5.2% |
|---|
| Artini China Co Ltd ($789) | -32.7% | -30.1% | -44.0% | -49.7% | -207.6% |
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% | 3.5% | 2.3% |
|---|
| Artini China Co Ltd ($789) | 5.2% | 6.1% | 0.7% | 3.4% | 2.7% |
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) | 17.2% | 11.9% | 8.2% | 8.3% | 5.8% |
|---|
| Artini China Co Ltd ($789) | -32.1% | -36.6% | -42.8% | -68.1% | -134.5% |
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 (85 companies) | -0.8x | -0.6x | -0.9x | -0.3x | -0.6x |
|---|
