Sun Art Retail Group Ltd reports 11.6% CAPEX decline while 5.0% Revenue growth
28/02/2016 • About Sun Art Retail Group Ltd (
$6808) • By InTwits
Sun Art Retail Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 6.5% in 2015 vs. 7.1% in 2014 vs. 6.4% in 2011
- Sun Art Retail Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's in pair with industry average of 6.7%.
- CAPEX is quite volatile: 1,765 in 2015, 1,049 in 2014, 1,104 in 2013, 1,504 in 2012, 2,673 in 2011
- The company has highly profitable business model: ROIC is at 15.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Art Retail Group Ltd ($6808) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 68,084 | 77,851 | 86,195 | 91,855 | 96,414 | 5.0% |
| Gross Profit | 13,857 | 16,150 | 18,613 | 20,998 | 22,463 | 7.0% |
| SG&A | 1,849 | 1,796 | 1,966 | 2,388 | 2,633 | 10.3% |
| EBITDA | 4,362 | 5,186 | 6,030 | 6,549 | 6,269 | -4.3% |
| Net Income | 1,600 | 2,409 | 2,775 | 2,899 | 2,443 | -15.7% |
Balance Sheet
|
|---|
| Cash | 7,517 | 5,757 | 6,271 | 6,269 | 6,582 | 5.0% |
| Short Term Debt | 199 | 402 | 391 | 905 | 638 | -29.5% |
| Long Term Debt | 0 | 0 | 0 | 5 | 2 | -60.0% |
Cash flow
|
|---|
| Capex | 5,358 | 5,131 | 6,839 | 5,471 | 4,837 | -11.6% |
Ratios
|
|---|
| Revenue growth | 21.2% | 14.3% | 10.7% | 6.6% | 5.0% | |
| EBITDA growth | 21.4% | 18.9% | 16.3% | 8.6% | -4.3% | |
| Gross Margin | 20.4% | 20.7% | 21.6% | 22.9% | 23.3% | 0.4% |
| EBITDA Margin | 6.4% | 6.7% | 7.0% | 7.1% | 6.5% | -0.6% |
| Net Income Margin | 2.4% | 3.1% | 3.2% | 3.2% | 2.5% | -0.6% |
| SG&A, % of revenue | 2.7% | 2.3% | 2.3% | 2.6% | 2.7% | 0.1% |
| CAPEX, % of revenue | 7.9% | 6.6% | 7.9% | 6.0% | 5.0% | -0.9% |
| ROIC | 22.3% | 19.1% | 20.0% | 18.9% | 15.0% | -3.8% |
| ROE | 16.4% | 15.1% | 15.6% | 15.1% | 12.1% | -3.0% |
| Net Debt/EBITDA | -1.7x | -1.0x | -1.0x | -0.8x | -0.9x | -0.1x |
Revenue and profitability
The company's Revenue increased on 5.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 12.3% to 15.0% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 0.62 pp from 3.2% to 2.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
Sun Art Retail Group Ltd's CAPEX/Revenue was 5.0% in 2015. The company showed small CAPEX/Revenue decline of 1.6 pp from 6.6% in 2012 to 5.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 6.3%.The company invested a large share of EBITDA (77.2%) to CAPEX.
Return on investment
The company operates at good ROIC (15.04%) and ROE (12.09%). ROIC decreased on 3.8 pp from 18.9% to 15.0% in 2015. ROE decreased on 3.0 pp from 15.1% to 12.1% in 2015.
Leverage (Debt)
Debt level is -0.9x Net Debt / EBITDA and 0.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from -0.8x to -0.9x in 2015. Debt dropped on 29.7% in 2015 while cash increased on 5.0% in 2015.
Appendix 1: Peers in Retail
Below we provide Sun Art Retail Group 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) | | 3.3% | -14.9% | 54.3% | -70.8% |
| 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) | 23.9% | 10.0% | 5.9% | 2.8% | -4.6% |
|---|
| Sun Art Retail Group Ltd ($6808) | | 14.3% | 10.7% | 6.6% | 5.0% |
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% | 99.1% |
| 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) | 40.4% | 37.8% | 39.5% | 37.6% | 45.3% |
|---|
| Sun Art Retail Group Ltd ($6808) | 20.4% | 20.7% | 21.6% | 22.9% | 23.3% |
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) | 13.3% | 9.9% | 7.2% | 8.8% | 7.1% |
|---|
| Sun Art Retail Group Ltd ($6808) | 6.4% | 6.7% | 7.0% | 7.1% | 6.5% |
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) | 3.8% | 4.0% | 3.6% | 3.4% | 2.5% |
|---|
| Sun Art Retail Group Ltd ($6808) | 7.9% | 6.6% | 7.9% | 6.0% | 5.0% |
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% | 51.4% |
| 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% | 20.8% |
| 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% | 3.5% |
|---|
| Sun Art Retail Group Ltd ($6808) | 22.3% | 19.1% | 20.0% | 18.9% | 15.0% |
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 | -0.5x | -0.8x | -0.2x | -0.6x |
|---|
| Sun Art Retail Group Ltd ($6808) | -1.7x | -1.0x | -1.0x | -0.8x | -0.9x |
