Yangtzekiang Garment Ltd reports 486% EBITDA growth and 1.8 pp EBITDA Margin growth from 0.40% to 2.2%
23/06/2015 • About Yangtzekiang Garment Ltd (
$294) • By InTwits
Yangtzekiang Garment Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Yangtzekiang Garment Ltd doesn't have a profitable business model yet: FY2015 ROIC is 0.9%
- EBITDA Margin is quite volatile: 2.2% in FY2015, 0.4% in FY2014, 4.7% in FY2013, 5.3% in FY2012, 3.3% in FY2011
- Yangtzekiang Garment Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has potentially unprofitable business model: ROIC is at 0.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Yangtzekiang Garment Ltd ($294) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,416 | 1,751 | 1,333 | 1,074 | 1,134 | 5.6% |
| Gross Profit | 218 | 269 | 222 | 157 | 165 | 5.1% |
| SG&A | 179 | 179 | 154 | 148 | 140 | -5.5% |
| EBITDA | 46 | 92 | 63 | 4 | 25 | 486.2% |
| Net Income | 113 | 103 | 53 | 12 | -23 | -295.0% |
Balance Sheet
|
|---|
| Cash | 137 | 149 | 270 | 275 | 272 | -0.9% |
| Short Term Debt | 4 | 14 | 0 | 2 | 1 | -43.1% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 10 | 26 | 12 | 3 | 11 | 283.1% |
Ratios
|
|---|
| Revenue growth | 8.1% | 23.6% | -23.9% | -19.4% | 5.6% | |
| EBITDA growth | 37.4% | 99.9% | -31.5% | -93.2% | 486.2% | |
| Gross Margin | 15.4% | 15.4% | 16.7% | 14.6% | 14.6% | -0.1% |
| EBITDA Margin | 3.3% | 5.3% | 4.7% | 0.4% | 2.2% | 1.8% |
| Net Income Margin | 8.0% | 5.9% | 4.0% | 1.1% | -2.0% | -3.2% |
| SG&A, % of revenue | 12.6% | 10.2% | 11.6% | 13.8% | 12.3% | -1.4% |
| CAPEX, % of revenue | 0.7% | 1.5% | 0.9% | 0.3% | 1.0% | 0.7% |
| ROIC | 2.6% | 6.2% | 3.6% | -0.8% | 0.9% | 1.7% |
| ROE | 10.9% | 8.9% | 4.3% | 0.9% | -1.8% | -2.8% |
| Net Debt/EBITDA | -2.9x | -1.5x | -4.3x | -63.3x | -10.7x | 52.5x |
Revenue and profitability
Yangtzekiang Garment Ltd's Revenue increased on 5.6% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.95 pp from 4.6% to 5.5% in 2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue decreased slightly on 1.4 pp from 13.8% to 12.3% in FY2015.
Net Income marign decreased on 3.2 pp from 1.1% to -2.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 0.98%. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 0.73%.
Return on investment
The company operates at low but positive ROIC (0.91%) and negative ROE (-1.84%). ROIC increased slightly on 1.7 pp from -0.79% to 0.91% in FY2015. ROE decreased on 2.8 pp from 0.94% to -1.8% in FY2015.
Leverage (Debt)
Debt level is -10.7x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA surged on 52.5x from -63.3x to -10.7x in FY2015. Debt dropped on 43.1% in FY2015 while cash decreased slightly on 0.95% in FY2015.
Appendix 1: Peers in Apparel
Below we provide Yangtzekiang Garment Ltd benchmarking against other companies in Apparel 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 |
|---|
| Ares Asia Ltd ($645) | 60.9% | | | 144.2% | |
| Texhong Textile Group Ltd ($2678) | 25.6% | 6.8% | 12.1% | 27.2% | |
| Win Hanverky Holdings Ltd ($3322) | 11.5% | -7.5% | -0.3% | 21.1% | |
| Symphony Holdings Ltd/Hong Kong ($1223) | 27.3% | -94.0% | 46.8% | 20.4% | |
| L & A International Holdings Ltd/ Hong Kong ($8387) | 33.1% | 27.9% | 7.9% | 20.4% | |
| |
|---|
| Median (46 companies) | 20.2% | 5.1% | 1.0% | 5.3% | -1.0% |
|---|
| Yangtzekiang Garment Ltd ($294) | | 23.6% | -23.9% | -19.4% | 5.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 67.8% | 71.5% | 72.1% | 73.8% | 71.8% |
| China Outfitters Holdings Ltd ($1146) | 76.1% | 74.9% | 74.3% | 70.0% | |
| C.banner International Holdings Ltd ($1028) | 63.5% | 63.3% | 62.0% | 63.4% | |
| S Culture International Holdings Ltd ($1255) | 62.8% | 64.7% | 63.7% | 62.9% | |
| Crocodile Garments ($122) | 65.5% | 64.7% | 60.7% | 60.4% | |
| |
|---|
| Median (45 companies) | 24.4% | 24.6% | 23.0% | 24.6% | 27.7% |
|---|
| Yangtzekiang Garment Ltd ($294) | 15.4% | 15.4% | 16.7% | 14.6% | 14.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HOSA International Ltd ($2200) | 46.3% | 44.4% | 42.2% | 37.6% | |
| Prada SpA ($1913) | 25.9% | 29.6% | 31.7% | 31.7% | 26.8% |
| China Lilang Ltd ($1234) | 26.7% | 26.3% | 26.9% | 29.4% | |
| Cabbeen Fashion Ltd ($2030) | 16.0% | 25.0% | 29.7% | 28.4% | |
| Fuguiniao Co Ltd ($1819) | 22.2% | 24.5% | 26.1% | 26.7% | |
| |
|---|
| Median (46 companies) | 10.7% | 11.0% | 9.3% | 6.1% | 17.0% |
|---|
| Yangtzekiang Garment Ltd ($294) | 3.3% | 5.3% | 4.7% | 0.4% | 2.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 9.2% | 9.7% | 10.6% | 15.3% | 10.2% |
| Symphony Holdings Ltd/Hong Kong ($1223) | 14.9% | 136.9% | 70.3% | 13.5% | |
| Mascotte Holdings Ltd ($136) | 0.4% | 74.2% | 45.0% | 12.2% | |
| Addchance Holdings Ltd ($3344) | 12.2% | 8.6% | 9.3% | 10.9% | |
| Active Group Holdings Ltd ($1096) | 1.3% | 17.4% | 3.5% | 10.7% | |
| |
|---|
| Median (46 companies) | 2.2% | 2.2% | 3.3% | 2.3% | 3.2% |
|---|
| Yangtzekiang Garment Ltd ($294) | 0.7% | 1.5% | 0.9% | 0.3% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 24.6% | 32.1% | 37.4% | 34.0% | 21.9% |
| Sitoy Group Holdings Ltd ($1023) | 62.1% | 39.3% | 28.7% | 31.8% | |
| HOSA International Ltd ($2200) | 44.2% | 34.6% | 32.0% | 28.2% | |
| Miko International Holdings Ltd ($1247) | 75.1% | 60.9% | 48.8% | 27.3% | |
| Cabbeen Fashion Ltd ($2030) | 25.7% | 32.3% | 32.9% | 26.5% | |
| |
|---|
| Median (46 companies) | 12.7% | 9.0% | 6.7% | 3.4% | 10.8% |
|---|
| Yangtzekiang Garment Ltd ($294) | 2.6% | 6.2% | 3.6% | -0.8% | 0.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| High Fashion International Ltd ($608) | 4.9x | 16.7x | 27.7x | 11.2x | |
| Citychamp Watch & Jewellery Group Ltd ($256) | -0.9x | 0.6x | 0.4x | 2.6x | |
| S Culture International Holdings Ltd ($1255) | 0.8x | 1.4x | 0.7x | 2.4x | |
| UKF Holdings Ltd ($1468) | 0.9x | 1.2x | -3.2x | 2.4x | 0.4x |
| Texhong Textile Group Ltd ($2678) | 3.9x | 1.4x | 1.3x | 2.3x | |
| |
|---|
| Median (32 companies) | -0.9x | -0.2x | -0.7x | -0.2x | 0.1x |
|---|
| Yangtzekiang Garment Ltd ($294) | -2.9x | -1.5x | -4.3x | -63.3x | -10.7x |
