Highlight China IoT International Ltd Net Income dropped on 136% in 2015 while Revenue jumped on 29.6%
30/06/2015 • About Highlight China IoT International Ltd (
$1682) • By InTwits
Highlight China IoT International Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Highlight China IoT International Ltd doesn't have a profitable business model yet: FY2015 ROIC is -0.1%
- EBITDA Margin is quite volatile: 1.8% in FY2015, 10.4% in FY2014, 3.3% in FY2013, 2.4% in FY2012, 5.0% in FY2011
- Highlight China IoT International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 3.5%.
- CAPEX is quite volatile: 10.5 in FY2015, 16.1 in FY2014, 46.6 in FY2013, 33.6 in FY2012, 9.1 in FY2011
- The company has unprofitable business model: ROIC is at -0.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Highlight China IoT International Ltd ($1682) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 903 | 910 | 1,071 | 282 | 366 | 29.6% |
| Gross Profit | 154 | 143 | 172 | 27 | 27 | 0.1% |
| SG&A | | | 157 | 19 | 28 | 48.1% |
| EBITDA | 45 | 22 | 35 | 29 | 7 | -77.5% |
| Net Income | 17 | 7 | 11 | 19 | -7 | -136.0% |
Balance Sheet
|
|---|
| Cash | 136 | 104 | 142 | 46 | 9 | -80.7% |
| Short Term Debt | 127 | 97 | 157 | 111 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 9 | 34 | 47 | 16 | 10 | -35.0% |
Ratios
|
|---|
| Revenue growth | 1.0% | 0.8% | 17.7% | -73.7% | 29.6% | |
| EBITDA growth | -27.6% | -51.5% | 61.1% | -16.4% | -77.5% | |
| Gross Margin | 17.1% | 15.7% | 16.1% | 9.6% | 7.4% | -2.2% |
| EBITDA Margin | 5.0% | 2.4% | 3.3% | 10.4% | 1.8% | -8.6% |
| Net Income Margin | 1.9% | 0.8% | 1.0% | 6.7% | -1.9% | -8.6% |
| SG&A, % of revenue | | | 14.6% | 6.6% | 7.5% | 0.9% |
| CAPEX, % of revenue | 1.0% | 3.7% | 4.3% | 5.7% | 2.9% | -2.8% |
| ROIC | 7.4% | 1.6% | 3.4% | 1.6% | -0.1% | -1.8% |
| ROE | 6.3% | 2.2% | 3.3% | 5.2% | -3.2% | -8.4% |
| Net Debt/EBITDA | -0.2x | -0.3x | 0.4x | 2.2x | -1.3x | -3.6x |
Revenue and profitability
The company's Revenue jumped on 29.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.5 pp from -19.2% to -17.7% in 2015.
Gross Margin decreased on 2.2 pp from 9.6% to 7.4% in FY2015. SG&A as a % of Revenue increased slightly on 0.94 pp from 6.6% to 7.5% in FY2015.
Net Income marign decreased on 8.6 pp from 6.7% to -1.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 2.9%. The company's CAPEX/Revenue decreased slightly on 0.84 pp from 3.7% in FY2012 to 2.9% in FY2015. For the last three years the average CAPEX/Revenue was 4.3%.To fuel this fast growth Highlight China IoT International Ltd made large investments to CAPEX (158% of EBITDA).
Return on investment
The company operates at negative ROIC (-0.12%) and ROE (-3.24%). ROIC decreased slightly on 1.8 pp from 1.6% to -0.12% in FY2015. ROE decreased on 8.4 pp from 5.2% to -3.2% in FY2015.
Leverage (Debt)
The company paid down all the debt in FY2015. Cash dropped on 80.7% in FY2015.
Appendix 1: Peers in Apparel
Below we provide Highlight China IoT International 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) | | | | 144.2% | 14.7% |
| 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) | 23.7% | 5.3% | 0.7% | 5.3% | -1.0% |
|---|
| Highlight China IoT International Ltd ($1682) | | 0.8% | 17.7% | -73.7% | 29.6% |
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% | 16.5% |
|---|
| Highlight China IoT International Ltd ($1682) | 17.1% | 15.7% | 16.1% | 9.6% | 7.4% |
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% | 5.5% | -0.7% |
|---|
| Highlight China IoT International Ltd ($1682) | 5.0% | 2.4% | 3.3% | 10.4% | 1.8% |
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% | 0.6% |
| 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% | 3.0% | 2.1% | 1.2% |
|---|
| Highlight China IoT International Ltd ($1682) | 1.0% | 3.7% | 4.3% | 5.7% | 2.9% |
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% | -1.3% |
|---|
| Highlight China IoT International Ltd ($1682) | 7.4% | 1.6% | 3.4% | 1.6% | -0.1% |
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 | -0.4x | -0.2x |
|---|
| Highlight China IoT International Ltd ($1682) | -0.2x | -0.3x | 0.4x | 2.2x | -1.3x |
