Lai Sun Garment International Ltd CAPEX surged on 232% in 2015 while Revenue dropped on 25.6%
15/10/2015 • About Lai Sun Garment International Ltd (
$191) • By InTwits
Lai Sun Garment International Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lai Sun Garment International Ltd doesn't have a profitable business model yet: FY2015 ROIC is 1.6%
- EBITDA Margin is expanding: 34.7% in FY2015 vs. 29.9% in FY2014 vs. 17.2% in FY2011
- Lai Sun Garment International Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 64.0%. At the same time it's in pair with industry average of 11.4%.
- CAPEX is quite volatile: 2,998 in FY2015, 904 in FY2014, 300 in FY2013, 255 in FY2012, 430 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lai Sun Garment International Ltd ($191) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,058 | 947 | 1,049 | 2,205 | 1,641 | -25.6% |
| Gross Profit | 485 | 587 | 661 | 1,098 | 973 | -11.4% |
| SG&A | | | 343 | 405 | 306 | -24.3% |
| EBITDA | 182 | 228 | 276 | 659 | 569 | -13.7% |
| Net Income | 3,790 | 1,386 | 1,664 | 940 | 1,291 | 37.2% |
Balance Sheet
|
|---|
| Cash | 1,356 | 1,747 | 3,183 | 2,458 | 1,769 | -28.0% |
| Short Term Debt | 249 | 1,418 | 431 | 430 | 1,322 | 207.1% |
| Long Term Debt | 2,739 | 1,934 | 6,018 | 6,430 | 7,132 | 10.9% |
Cash flow
|
|---|
| Capex | 430 | 255 | 300 | 904 | 2,998 | 231.7% |
Ratios
|
|---|
| Revenue growth | 2,795.4% | -10.5% | 10.7% | 110.2% | -25.6% | |
| EBITDA growth | -10,319.6% | 25.7% | 20.7% | 139.2% | -13.7% | |
| Gross Margin | 45.8% | 61.9% | 63.0% | 49.8% | 59.3% | 9.5% |
| EBITDA Margin | 17.2% | 24.1% | 26.3% | 29.9% | 34.7% | 4.8% |
| Net Income Margin | 358.1% | 146.3% | 158.6% | 42.7% | 78.7% | 36.0% |
| SG&A, % of revenue | | | 32.7% | 18.4% | 18.7% | 0.3% |
| CAPEX, % of revenue | 40.6% | 26.9% | 28.6% | 41.0% | 182.7% | 141.7% |
| ROIC | 1.3% | 1.0% | 1.0% | 2.1% | 1.6% | -0.5% |
| ROE | 64.7% | 16.7% | 16.6% | 8.0% | 9.8% | 1.8% |
| Net Debt/EBITDA | 9.0x | 7.0x | 11.8x | 6.7x | 11.7x | 5.1x |
Revenue and profitability
The company's Revenue dropped on 25.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.8 pp from 29.9% to 34.7% in FY2015.
Gross Margin increased on 9.5 pp from 49.8% to 59.3% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign jumped on 36.0 pp from 42.7% to 78.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 183% in FY2015. Lai Sun Garment International Ltd's CAPEX/Revenue jumped on 156 pp from 26.9% in FY2012 to 183% in FY2015. Average CAPEX/Revenue for the last three years was 84.1%.The company has spent a lot to CAPEX (527% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (1.58%) and ROE (9.79%). ROIC decreased slightly on 0.53 pp from 2.1% to 1.6% in FY2015. ROE increased slightly on 1.8 pp from 8.0% to 9.8% in FY2015.
Leverage (Debt)
Debt level is 11.7x Net Debt / EBITDA and 14.9x Debt / EBITDA. Net Debt / EBITDA jumped on 5.1x from 6.7x to 11.7x in FY2015. Debt jumped on 23.2% in FY2015 while cash dropped on 28.0% in FY2015.
Appendix 1: Peers in Real Estate
Below you can find Lai Sun Garment International Ltd benchmarking vs. other companies in Real Estate 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 |
|---|
| Common Splendor International Health Industry Group Ltd ($286) | -0.9% | -0.5% | 1.9% | 4,120.2% | |
| Landsea Green Properties Co Ltd ($106) | -91.1% | -35.1% | -51.2% | 3,097.3% | |
| LVGEM China Real Estate Invest ($95) | -0.1% | -27.5% | -21.9% | 3,008.3% | |
| Rivera Holdings Ltd ($281) | 222.2% | 197.1% | -89.9% | 2,067.2% | |
| Ceneric Holdings Ltd ($542) | -94.0% | -73.9% | -49.8% | 1,922.5% | |
| |
|---|
| Median (172 companies) | 15.5% | 15.6% | 13.1% | 5.0% | 2.3% |
|---|
| Lai Sun Garment International Ltd ($191) | | -10.5% | 10.7% | 110.2% | -25.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tern Properties Co Ltd ($277) | 96.9% | 96.7% | 98.4% | 98.4% | 98.7% |
| GR Properties Ltd ($108) | 37.4% | 39.3% | | 98.2% | |
| Renhe Commercial Holdings Co Ltd ($1387) | 71.1% | 79.0% | 95.2% | 97.9% | |
| YT Realty Group Ltd ($75) | 91.5% | 94.4% | 96.6% | 96.7% | |
| ITC Properties Group Ltd ($199) | 29.8% | 22.8% | 92.9% | 95.2% | 62.7% |
| |
|---|
| Median (154 companies) | 43.4% | 41.9% | 40.0% | 38.9% | 53.0% |
|---|
| Lai Sun Garment International Ltd ($191) | 45.8% | 61.9% | 63.0% | 49.8% | 59.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ITC Properties Group Ltd ($199) | 24.0% | -125.5% | -2,995.7% | 1,685.3% | -525.1% |
| Beijing Properties Holdings Ltd ($925) | 33.2% | -606.3% | 2,162.6% | 224.3% | |
| Chinese Estates Holdings Ltd ($127) | 340.9% | 356.2% | 91.6% | 195.5% | |
| Zall Development Group Ltd ($2098) | 73.6% | 105.3% | 133.1% | 143.2% | |
| Ceneric Holdings Ltd ($542) | -5.9% | -382.7% | -1,024.0% | 126.8% | |
| |
|---|
| Median (172 companies) | 35.4% | 28.9% | 28.1% | 26.4% | 34.5% |
|---|
| Lai Sun Garment International Ltd ($191) | 17.2% | 24.1% | 26.3% | 29.9% | 34.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 0.0% | 18.0% | 27,965.5% | |
| ITC Properties Group Ltd ($199) | 25.6% | 56.2% | 4,202.4% | 1,304.7% | 189.7% |
| Wanda Hotel Development Co Ltd ($169) | | 5.9% | 24.1% | 1,091.1% | |
| Pacific Century Premium Developments Ltd ($432) | 6.5% | 2.9% | 323.1% | 351.2% | |
| Liu Chong Hing Investment Ltd ($194) | 9.4% | 18.5% | 6.1% | 269.7% | |
| |
|---|
| Median (173 companies) | 5.9% | 5.3% | 6.1% | 4.5% | 4.8% |
|---|
| Lai Sun Garment International Ltd ($191) | 40.6% | 26.9% | 28.6% | 41.0% | 182.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rykadan Capital Ltd ($2288) | 17.2% | -1.8% | -2.6% | 48.4% | -3.7% |
| LVGEM China Real Estate Invest ($95) | 0.2% | -0.2% | -1.1% | 22.1% | |
| Zall Development Group Ltd ($2098) | 39.0% | 19.2% | 17.6% | 18.7% | |
| China Overseas Land & Investment Ltd ($688) | 18.0% | 18.4% | 15.1% | 18.5% | |
| Hong Kong Ferry Holdings Co Ltd ($50) | 4.7% | 3.8% | 0.6% | 18.0% | |
| |
|---|
| Median (176 companies) | 4.6% | 4.0% | 3.9% | 3.8% | 2.2% |
|---|
| Lai Sun Garment International Ltd ($191) | 1.3% | 1.0% | 1.0% | 2.1% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Properties Group Ltd ($1838) | 16.9x | 43.0x | 21.4x | 1,523.0x | |
| SRE Group Ltd ($1207) | 10.6x | 14.1x | 24.7x | 1,184.6x | |
| Cheuk Nang Holdings Ltd ($131) | 53.2x | | 177.3x | 901.7x | |
| Tian An China Investment Co Ltd ($28) | 2.4x | 13.2x | 15.1x | 486.6x | |
| Greenland Hong Kong Holdings Ltd ($337) | 3.7x | | 6.2x | 49.3x | |
| |
|---|
| Median (139 companies) | 2.1x | 2.3x | 2.7x | 3.0x | 1.4x |
|---|
| Lai Sun Garment International Ltd ($191) | 9.0x | 7.0x | 11.8x | 6.7x | 11.7x |
