VS International Group Ltd Debt dropped on 42.2% in 2015 and Net Debt / EBITDA dropped on 1.2x from 4.4x to 3.3x
28/09/2015 • About VS International Group Ltd (
$1002) • By InTwits
VS International Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- VS International Group Ltd is a company in decline: FY2015 revenue growth was -31.8%, 5 years revenue CAGR was -9.0%
- VS International Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's a lot of higher than industry average of 4.2%.
- CAPEX is quite volatile: 40.6 in FY2015, 25.3 in FY2014, 25.3 in FY2013, 71.8 in FY2012, 54.7 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
VS International Group Ltd ($1002) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,630 | 1,513 | 1,221 | 1,371 | 934 | -31.8% |
| Gross Profit | 140 | 149 | 107 | 169 | 138 | -18.5% |
| SG&A | | | 133 | 161 | 131 | -18.7% |
| EBITDA | 71 | 97 | 57 | 81 | 57 | -29.0% |
| Net Income | -61 | -74 | -38 | -26 | -23 | -10.0% |
Balance Sheet
|
|---|
| Cash | 115 | 91 | 81 | 102 | 78 | -24.0% |
| Short Term Debt | 471 | 331 | 223 | 264 | 148 | -43.9% |
| Long Term Debt | 249 | 257 | 226 | 195 | 117 | -39.9% |
Cash flow
|
|---|
| Capex | 55 | 72 | 25 | 25 | 41 | 60.2% |
Ratios
|
|---|
| Revenue growth | 8.9% | -7.1% | -19.3% | 12.3% | -31.8% | |
| EBITDA growth | -43.6% | 37.1% | -41.4% | 42.2% | -29.0% | |
| Gross Margin | 8.6% | 9.8% | 8.8% | 12.3% | 14.7% | 2.4% |
| EBITDA Margin | 4.3% | 6.4% | 4.6% | 5.9% | 6.1% | 0.2% |
| Net Income Margin | -3.7% | -4.9% | -3.1% | -1.9% | -2.5% | -0.6% |
| SG&A, % of revenue | | | 10.9% | 11.8% | 14.0% | 2.3% |
| CAPEX, % of revenue | 3.4% | 4.7% | 2.1% | 1.8% | 4.3% | 2.5% |
| ROIC | -2.5% | 0.2% | -2.8% | 1.4% | 1.5% | 0.1% |
| ROE | -13.2% | -17.0% | -9.3% | -6.2% | -5.5% | 0.7% |
| Net Debt/EBITDA | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x | -1.2x |
Revenue and profitability
The company's Revenue dropped on 31.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 62.4 pp from -5.5% to -67.9% in 2015.
Gross Margin increased on 2.4 pp from 12.3% to 14.7% in FY2015. SG&A as a % of Revenue increased on 2.3 pp from 11.8% to 14.0% in FY2015.
Net Income marign decreased slightly on 0.60 pp from -1.9% to -2.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 VS International Group Ltd had CAPEX/Revenue of 4.3%. CAPEX/Revenue showed almost no change from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 2.8%.VS International Group Ltd invested a big chunk of EBITDA (70.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (1.46%) and negative ROE (-5.53%). ROIC showed almost no change in FY2015. ROE increased slightly on 0.70 pp from -6.2% to -5.5% in FY2015.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 4.6x Debt / EBITDA. Net Debt / EBITDA dropped on 1.2x from 4.4x to 3.3x in FY2015. Debt dropped on 42.2% in FY2015 while cash dropped on 24.0% in FY2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find VS International Group Ltd benchmarking vs. other companies in Miscellaneous Manufactur industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CSR Corp Ltd ($1766) | 24.0% | 12.0% | 9.7% | 123.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 37.4% | 59.5% | 45.9% | 45.0% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 1.5% | 22.2% | 43.2% | |
| Time Watch Investments Ltd ($2033) | | 28.2% | 25.4% | 25.6% | 10.4% |
| China International Marine Containers Group Co Ltd ($2039) | 23.4% | -15.6% | 6.6% | 21.4% | |
| |
|---|
| Median (25 companies) | 23.4% | -1.8% | 0.1% | 6.7% | -8.5% |
|---|
| VS International Group Ltd ($1002) | | -7.1% | -19.3% | 12.3% | -31.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Time Watch Investments Ltd ($2033) | 58.5% | 60.2% | 60.6% | 65.0% | 68.1% |
| Man Sang International Ltd ($938) | 34.7% | 42.4% | 32.8% | 60.3% | 78.6% |
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 35.0% | 33.2% | 35.1% | 37.4% | |
| Launch Tech Co Ltd ($2488) | 39.2% | 27.4% | 33.6% | 33.6% | |
| |
|---|
| Median (24 companies) | 21.0% | 19.8% | 20.8% | 24.9% | 36.1% |
|---|
| VS International Group Ltd ($1002) | 8.6% | 9.8% | 8.8% | 12.3% | 14.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | |
| Man Sang International Ltd ($938) | 18.7% | 24.9% | 15.4% | 37.0% | 33.8% |
| IPE Group Ltd ($929) | 24.9% | 25.6% | 22.5% | 29.5% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 19.5% | 18.4% | 19.8% | 20.6% | |
| Time Watch Investments Ltd ($2033) | 16.8% | 17.6% | 16.8% | 19.4% | 20.5% |
| |
|---|
| Median (25 companies) | 10.7% | 8.1% | 9.8% | 9.8% | 4.7% |
|---|
| VS International Group Ltd ($1002) | 4.3% | 6.4% | 4.6% | 5.9% | 6.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | |
| KEE Holdings Co Ltd ($2011) | 20.9% | 21.8% | 43.7% | 24.9% | |
| China International Marine Containers Group Co Ltd ($2039) | 4.7% | 3.9% | 12.1% | 18.5% | |
| China Environmental Energy Investment Ltd ($986) | 77.7% | 6.1% | 0.4% | 17.9% | 47.6% |
| TK Group Holdings Ltd ($2283) | 8.9% | 13.3% | 8.1% | 13.7% | |
| |
|---|
| Median (25 companies) | 5.2% | 4.9% | 4.3% | 4.4% | 5.1% |
|---|
| VS International Group Ltd ($1002) | 3.4% | 4.7% | 2.1% | 1.8% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | |
| Time Watch Investments Ltd ($2033) | 30.5% | 34.5% | 27.1% | 27.8% | 27.9% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 16.9% | 17.7% | 20.0% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 12.2% | 19.7% | 17.8% | 16.5% | |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | |
| |
|---|
| Median (25 companies) | 8.0% | 4.4% | 4.4% | 4.4% | 1.8% |
|---|
| VS International Group Ltd ($1002) | -2.5% | 0.2% | -2.8% | 1.4% | 1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | |
| Continental Holdings Ltd ($513) | 8.3x | | 20.1x | 92.9x | |
| China International Marine Containers Group Co Ltd ($2039) | 2.8x | 4.0x | 4.7x | 5.8x | |
| Launch Tech Co Ltd ($2488) | -0.4x | 7.6x | 2.4x | 3.9x | |
| Lee & Man Chemical Co Ltd ($746) | -0.3x | -0.2x | 1.5x | 2.2x | |
| |
|---|
| Median (21 companies) | -0.3x | -0.3x | -0.3x | -0.2x | -2.4x |
|---|
| VS International Group Ltd ($1002) | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x |
