Giordano International Ltd reports 4.4% Net Income growth while 3.0% Revenue decline
03/03/2016 • About Giordano International Ltd (
$709) • By InTwits
Giordano International Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Giordano International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's in pair with industry average of 6.2%.
- CAPEX is quite volatile: 4.1 in 2015, 5.8 in 2014, 497 in 2013, 391 in 2012, 363 in 2011
- The company has highly profitable business model: ROIC is at 17.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Giordano International Ltd ($709) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,614 | 5,673 | 5,848 | 5,545 | 5,381 | -3.0% |
| Gross Profit | 3,283 | 3,331 | 3,551 | 3,214 | 3,097 | -3.6% |
| SG&A | 2,522 | 2,620 | 2,836 | 2,749 | 2,630 | -4.3% |
| EBITDA | 999 | 1,098 | 969 | 735 | 726 | -1.2% |
| Net Income | 728 | 826 | 663 | 408 | 426 | 4.4% |
Balance Sheet
|
|---|
| Cash | 1,062 | 872 | 1,232 | 688 | 939 | 36.5% |
| Short Term Debt | 63 | 339 | 332 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 146 | 155 | 212 | 187 | 145 | -22.5% |
Ratios
|
|---|
| Revenue growth | 18.7% | 1.1% | 3.1% | -5.2% | -3.0% | |
| EBITDA growth | 26.3% | 9.9% | -11.7% | -24.1% | -1.2% | |
| Gross Margin | 58.5% | 58.7% | 60.7% | 58.0% | 57.6% | -0.4% |
| EBITDA Margin | 17.8% | 19.4% | 16.6% | 13.3% | 13.5% | 0.2% |
| Net Income Margin | 13.0% | 14.6% | 11.3% | 7.4% | 7.9% | 0.6% |
| SG&A, % of revenue | 44.9% | 46.2% | 48.5% | 49.6% | 48.9% | -0.7% |
| CAPEX, % of revenue | 2.6% | 2.7% | 3.6% | 3.4% | 2.7% | -0.7% |
| ROIC | 29.6% | 27.8% | 20.6% | 15.2% | 17.0% | 1.7% |
| ROE | 28.3% | 28.9% | 21.8% | 13.6% | 14.9% | 1.4% |
| Net Debt/EBITDA | -1.0x | -0.5x | -0.9x | -0.9x | -1.3x | -0.4x |
Revenue and profitability
Giordano International Ltd's Revenue decreased on 3.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.90 pp from 5.7% to 6.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased slightly on 0.70 pp from 49.6% to 48.9% in 2015.
Net Income marign increased slightly on 0.56 pp from 7.4% to 7.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 3.2%.
Return on investment
The company operates at good ROIC (16.95%) and ROE (14.95%). ROIC increased slightly on 1.7 pp from 15.2% to 17.0% in 2015. ROE increased slightly on 1.4 pp from 13.6% to 14.9% in 2015.
Leverage (Debt)
The company has no debt. Cash jumped on 36.5% in 2015.
Management team
The company's CEO is Lau Kwok Kuen "Peter". Lau Kwok Kuen "Peter" has 24 years tenure at the company.
Appendix 1: Peers in Retail
Below we provide Giordano International 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) | 24.1% | 10.3% | 6.0% | 3.1% | -3.6% |
|---|
| Giordano International Ltd ($709) | | 1.1% | 3.1% | -5.2% | -3.0% |
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) | 39.4% | 37.2% | 36.4% | 35.1% | 45.6% |
|---|
| Giordano International Ltd ($709) | 58.5% | 58.7% | 60.7% | 58.0% | 57.6% |
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% | 43.4% |
| 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% | 7.2% |
|---|
| Giordano International Ltd ($709) | 17.8% | 19.4% | 16.6% | 13.3% | 13.5% |
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) | 3.9% | 4.0% | 3.6% | 3.5% | 2.6% |
|---|
| Giordano International Ltd ($709) | 2.6% | 2.7% | 3.6% | 3.4% | 2.7% |
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% | 4.4% |
|---|
| Giordano International Ltd ($709) | 29.6% | 27.8% | 20.6% | 15.2% | 17.0% |
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 | 7.3x |
| |
|---|
| Median (85 companies) | -0.8x | -0.6x | -0.8x | -0.2x | -0.5x |
|---|
| Giordano International Ltd ($709) | -1.0x | -0.5x | -0.9x | -0.9x | -1.3x |
