Bosideng International Holdings Ltd reports 81.0% Net Income decline and 23.6% Revenue decline
29/06/2015 • About Bosideng International Holdings Ltd (
$3998) • By InTwits
Bosideng International Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bosideng International Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is 1.9%
- EBITDA Margin is declining: 6.0% in FY2015 vs. 12.3% in FY2014 vs. 20.4% in FY2011
- EBITDA Margin is quite volatile: 6.0% in FY2015, 12.3% in FY2014, 15.3% in FY2013, 20.6% in FY2012, 20.4% in FY2011
- Bosideng International Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: 194 in FY2015, 240 in FY2014, 281 in FY2013, 634 in FY2012, 144 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.9%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is -0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bosideng International Holdings Ltd ($3998) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 7,038 | 8,376 | 9,325 | 8,238 | 6,293 | -23.6% |
| Gross Profit | 3,299 | 4,189 | 4,721 | 4,115 | 2,870 | -30.3% |
| SG&A | 1,862 | 2,615 | 3,220 | 3,295 | 2,637 | -20.0% |
| EBITDA | 1,433 | 1,730 | 1,430 | 1,012 | 379 | -62.6% |
| Net Income | 1,276 | 1,437 | 1,079 | 695 | 132 | -81.0% |
Balance Sheet
|
|---|
| Cash | 1,418 | 1,907 | 1,935 | 2,118 | 2,471 | 16.7% |
| Short Term Debt | 587 | 1,741 | 1,737 | 1,049 | 2,544 | 142.6% |
| Long Term Debt | 0 | 0 | 919 | 2,211 | 993 | -55.1% |
Cash flow
|
|---|
| Capex | 144 | 634 | 281 | 240 | 194 | -19.2% |
Ratios
|
|---|
| Revenue growth | 22.6% | 19.0% | 11.3% | -11.7% | -23.6% | |
| EBITDA growth | 14.7% | 20.7% | -17.3% | -29.2% | -62.6% | |
| Gross Margin | 46.9% | 50.0% | 50.6% | 50.0% | 45.6% | -4.3% |
| EBITDA Margin | 20.4% | 20.6% | 15.3% | 12.3% | 6.0% | -6.3% |
| Net Income Margin | 18.1% | 17.2% | 11.6% | 8.4% | 2.1% | -6.3% |
| SG&A, % of revenue | 26.5% | 31.2% | 34.5% | 40.0% | 41.9% | 1.9% |
| CAPEX, % of revenue | 2.0% | 7.6% | 3.0% | 2.9% | 3.1% | 0.2% |
| ROIC | 18.5% | 19.0% | 13.1% | 8.4% | 1.9% | -6.5% |
| ROE | 18.7% | 20.5% | 15.2% | 9.7% | 1.8% | -7.9% |
| Net Debt/EBITDA | -0.6x | -0.1x | 0.5x | 1.1x | 2.8x | 1.7x |
Revenue and profitability
The company's Revenue dropped on 23.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 14.0% to 15.5% in 2015.
Gross Margin decreased on 4.3 pp from 50.0% to 45.6% in FY2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 40.0% to 41.9% in FY2015.
Net Income marign decreased on 6.3 pp from 8.4% to 2.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.1%. The company showed decline in CAPEX/Revenue of 4.5 pp from 7.6% in FY2012 to 3.1% in FY2015. Average CAPEX/Revenue for the last three years was 3.0%.The company invested a big chunk of EBITDA (51.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (1.85%) and ROE (1.84%). ROIC decreased on 6.5 pp from 8.4% to 1.9% in FY2015. ROE decreased on 7.9 pp from 9.7% to 1.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.8x and Debt / EBITDA is 9.3x. Net Debt / EBITDA surged on 1.7x from 1.1x to 2.8x in FY2015. Debt increased on 8.5% in FY2015 while cash jumped on 16.7% in FY2015.
Appendix 1: Peers in Retail
Below we provide Bosideng International 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) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (109 companies) | 21.8% | 10.0% | 5.9% | 3.1% | -1.0% |
|---|
| Bosideng International Holdings Ltd ($3998) | | 19.0% | 11.3% | -11.7% | -23.6% |
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% | 96.7% |
| 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 (98 companies) | 39.4% | 37.2% | 36.4% | 35.1% | 44.6% |
|---|
| Bosideng International Holdings Ltd ($3998) | 46.9% | 50.0% | 50.6% | 50.0% | 45.6% |
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 (109 companies) | 13.1% | 9.6% | 7.1% | 7.9% | 8.1% |
|---|
| Bosideng International Holdings Ltd ($3998) | 20.4% | 20.6% | 15.3% | 12.3% | 6.0% |
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% | 10.6% |
| |
|---|
| Median (109 companies) | 3.9% | 4.0% | 3.6% | 3.5% | 2.4% |
|---|
| Bosideng International Holdings Ltd ($3998) | 2.0% | 7.6% | 3.0% | 2.9% | 3.1% |
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% | 71.8% |
| 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% | 39.8% |
| 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 (109 companies) | 16.6% | 11.8% | 8.2% | 8.2% | 6.2% |
|---|
| Bosideng International Holdings Ltd ($3998) | 18.5% | 19.0% | 13.1% | 8.4% | 1.9% |
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 | 23.5x |
| 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 |
|---|
| Bosideng International Holdings Ltd ($3998) | -0.6x | -0.1x | 0.5x | 1.1x | 2.8x |
