Victory City International Holdings Ltd Net Income surged on 44.4% in 2015 while Revenue decreased on 4.4%
26/06/2015 • About Victory City International Holdings Ltd (
$539) • By InTwits
Victory City International Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Victory City International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's in pair with industry average of 8.9%.
- CAPEX is quite volatile: 350 in FY2015, 459 in FY2014, 414 in FY2013, 162 in FY2012, 93.1 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.0%
- It operates with high leverage: Net Debt/EBITDA is 2.5x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Victory City International Holdings Ltd ($539) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,048 | 3,835 | 4,085 | 5,372 | 5,137 | -4.4% |
| Gross Profit | 771 | 716 | 751 | 874 | 957 | 9.4% |
| SG&A | | | 348 | 404 | 418 | 3.5% |
| EBITDA | 625 | 571 | 542 | 627 | 717 | 14.4% |
| Net Income | 334 | 341 | 206 | 277 | 400 | 44.4% |
Balance Sheet
|
|---|
| Cash | 709 | 1,099 | 1,693 | 1,300 | 2,003 | 54.0% |
| Short Term Debt | 1,044 | 1,473 | 1,772 | 2,008 | 2,247 | 11.9% |
| Long Term Debt | 780 | 485 | 1,024 | 1,279 | 1,576 | 23.2% |
Cash flow
|
|---|
| Capex | 93 | 162 | 414 | 459 | 350 | -23.8% |
Ratios
|
|---|
| Revenue growth | 4.8% | -5.2% | 6.5% | 31.5% | -4.4% | |
| EBITDA growth | 4.4% | -8.6% | -5.0% | 15.6% | 14.4% | |
| Gross Margin | 19.0% | 18.7% | 18.4% | 16.3% | 18.6% | 2.3% |
| EBITDA Margin | 15.4% | 14.9% | 13.3% | 11.7% | 14.0% | 2.3% |
| Net Income Margin | 8.3% | 8.9% | 5.0% | 5.2% | 7.8% | 2.6% |
| SG&A, % of revenue | | | 8.5% | 7.5% | 8.1% | 0.6% |
| CAPEX, % of revenue | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% | -1.7% |
| ROIC | 7.6% | 5.1% | 3.8% | 4.4% | 5.0% | 0.6% |
| ROE | 9.8% | 8.3% | 4.5% | 5.8% | 7.7% | 2.0% |
| Net Debt/EBITDA | 1.8x | 1.5x | 2.0x | 3.2x | 2.5x | -0.6x |
Revenue and profitability
The company's Revenue decreased on 4.4% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.3 pp from 11.7% to 14.0% in FY2015.
Gross Margin increased on 2.3 pp from 16.3% to 18.6% in FY2015. SG&A as a % of Revenue increased slightly on 0.62 pp from 7.5% to 8.1% in FY2015.
Net Income marign increased on 2.6 pp from 5.2% to 7.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.8% in FY2015. CAPEX/Revenue increased on 2.6 pp from 4.2% in FY2012 to 6.8% in FY2015. It's average level of CAPEX/Revenue for the last three years was 8.5%.
Return on investment
The company operates at low ROIC (5.01%) and ROE (7.74%). ROIC increased slightly on 0.60 pp from 4.4% to 5.0% in FY2015. ROE increased slightly on 2.0 pp from 5.8% to 7.7% in FY2015.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 3.2x to 2.5x in FY2015. Debt surged on 16.3% in FY2015 while cash surged on 54.0% in FY2015.
Appendix 1: Peers in Textiles
Below we provide Victory City International Holdings Ltd benchmarking against other companies in Textiles 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 |
|---|
| Guangdong Tannery Ltd ($1058) | 12.7% | 6.1% | -4.5% | 29.0% | |
| Kingdom Holding Co Ltd ($528) | 13.1% | 1.1% | 6.0% | 20.0% | |
| Pacific Textiles Holdings Ltd ($1382) | | -10.6% | 3.6% | 11.6% | -7.0% |
| Kam Hing International Holdings Ltd ($2307) | 24.4% | 0.9% | -4.3% | 1.6% | |
| TAI Ping Carpet International Ltd ($146) | 2.3% | 20.2% | -4.6% | -0.3% | |
| |
|---|
| Median (19 companies) | 16.7% | 0.1% | -4.3% | -11.5% | -6.2% |
|---|
| Victory City International Holdings Ltd ($539) | | -5.2% | 6.5% | 31.5% | -4.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TAI Ping Carpet International Ltd ($146) | 40.4% | 41.0% | 45.4% | 46.7% | |
| Ping Shan Tea Group Ltd ($364) | 15.3% | 11.2% | 20.8% | 42.9% | |
| Texwinca Holdings Ltd ($321) | 33.7% | 29.6% | 30.9% | 33.3% | 34.1% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 30.3% | 31.1% | 32.5% | 32.5% | |
| Kingdom Holding Co Ltd ($528) | 32.1% | 29.1% | 27.2% | 26.8% | |
| |
|---|
| Median (19 companies) | 15.3% | 16.3% | 12.6% | 13.6% | 25.6% |
|---|
| Victory City International Holdings Ltd ($539) | 19.0% | 18.7% | 18.4% | 16.3% | 18.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ping Shan Tea Group Ltd ($364) | 14.9% | 11.2% | | 39.3% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 26.2% | 28.1% | 28.7% | 30.2% | |
| Kingdom Holding Co Ltd ($528) | 29.3% | 26.3% | 25.3% | 24.8% | |
| Weiqiao Textile Co ($2698) | 10.2% | 17.5% | 20.2% | 21.4% | |
| Pacific Textiles Holdings Ltd ($1382) | 19.5% | 19.1% | 19.0% | 19.5% | 18.4% |
| |
|---|
| Median (19 companies) | 13.3% | 9.4% | 8.8% | 11.7% | 14.3% |
|---|
| Victory City International Holdings Ltd ($539) | 15.4% | 14.9% | 13.3% | 11.7% | 14.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hua Lien International Holding Co Ltd ($969) | 0.0% | 19.7% | 40.5% | 79.6% | |
| Ping Shan Tea Group Ltd ($364) | 18.1% | 32.0% | | 14.0% | |
| Kingdom Holding Co Ltd ($528) | 6.2% | 8.4% | 18.8% | 10.9% | |
| Silverman Holdings Ltd ($1616) | 8.7% | 6.5% | 18.0% | 8.4% | |
| China Weaving Materials Holdings Ltd ($3778) | 2.4% | 13.4% | 11.3% | 7.7% | |
| |
|---|
| Median (19 companies) | 2.7% | 2.6% | 1.8% | 3.9% | 3.7% |
|---|
| Victory City International Holdings Ltd ($539) | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Textiles Holdings Ltd ($1382) | 28.8% | 23.7% | 26.4% | 31.6% | 25.9% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 24.2% | 22.3% | 20.1% | 17.6% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 7.9% | 6.2% | 13.2% | 15.4% | |
| Kingdom Holding Co Ltd ($528) | 16.3% | 13.8% | 12.7% | 13.8% | |
| TAI Ping Carpet International Ltd ($146) | | | 2.6% | 5.7% | |
| |
|---|
| Median (19 companies) | 7.4% | 5.0% | 5.3% | 3.5% | 17.0% |
|---|
| Victory City International Holdings Ltd ($539) | 7.6% | 5.1% | 3.8% | 4.4% | 5.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangdong Tannery Ltd ($1058) | 8.9x | 6.5x | 5.8x | 11.6x | |
| Sijia Group Co ($1863) | -0.1x | 1.6x | 5.3x | 6.4x | |
| China Weaving Materials Holdings Ltd ($3778) | 1.3x | 3.6x | 3.0x | 5.3x | |
| Co-Prosperity Holdings Ltd ($707) | 8.3x | 34.8x | | 4.5x | |
| Zhejiang Yonglong Enterprises Co Ltd ($8211) | 0.2x | 4.2x | 0.1x | 3.0x | |
| |
|---|
| Median (17 companies) | 1.3x | 1.5x | 1.3x | 0.7x | -0.2x |
|---|
| Victory City International Holdings Ltd ($539) | 1.8x | 1.5x | 2.0x | 3.2x | 2.5x |
