Future Bright Holdings Ltd Net Income dropped on 127% in 2015 and EBITDA Margin dropped on 13.3 pp from 19.5% to 6.1%
14/03/2016 • About Future Bright Holdings Ltd (
$703) • By InTwits
Future Bright Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Future Bright Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.1%
- EBITDA Margin is declining: 6.1% in 2015 vs. 19.5% in 2014 vs. 30.3% in 2011
- EBITDA Margin is quite volatile: 6.1% in 2015, 19.5% in 2014, 28.3% in 2013, 30.7% in 2012, 30.3% in 2011
- Future Bright Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.8%. At the same time it's a lot of higher than industry average of 6.4%.
- CAPEX is quite volatile: 205 in 2015, 316 in 2014, 27.4 in 2013, 16.5 in 2012, 34.1 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.1%
- It operates with high leverage: Net Debt/EBITDA is 0.0x while industry average is -0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Future Bright Holdings Ltd ($703) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 546.5 | 646.1 | 746.5 | 858.9 | 824.2 | -4.0% |
| Gross Profit | 198.8 | 237.1 | 271.8 | 626.4 | 577.4 | -7.8% |
| SG&A | | | | 120.2 | 146.1 | 21.6% |
| EBITDA | 165.6 | 198.5 | 211.1 | 167.4 | 50.6 | -69.8% |
| Net Income | 89.6 | 242.3 | 261.0 | 168.8 | -45.9 | -127.2% |
Balance Sheet
|
|---|
| Cash | 161.5 | 320.3 | 425.9 | 465.6 | 219.3 | -52.9% |
| Short Term Debt | 44.9 | 20.7 | 18.7 | 14.4 | 83.9 | 481.7% |
| Long Term Debt | 204.5 | 368.9 | 335.3 | 332.7 | 137.1 | -58.8% |
Cash flow
|
|---|
| Capex | 34.1 | 16.5 | 27.4 | 316.4 | 205.3 | -35.1% |
Ratios
|
|---|
| Revenue growth | 45.4% | 18.2% | 15.5% | 15.1% | -4.0% | |
| EBITDA growth | 81.7% | 19.9% | 6.4% | -20.7% | -69.8% | |
| Gross Margin | 36.4% | 36.7% | 36.4% | 72.9% | 70.1% | -2.9% |
| EBITDA Margin | 30.3% | 30.7% | 28.3% | 19.5% | 6.1% | -13.3% |
| Net Income Margin | 16.4% | 37.5% | 35.0% | 19.7% | -5.6% | -25.2% |
| SG&A, % of revenue | | | | 14.0% | 17.7% | 3.7% |
| CAPEX, % of revenue | 6.2% | 2.6% | 3.7% | 36.8% | 24.9% | -11.9% |
| ROIC | 29.0% | 20.2% | 15.9% | 9.0% | 0.1% | -8.9% |
| ROE | 35.1% | 53.9% | 37.0% | 16.8% | -4.0% | -20.8% |
| Net Debt/EBITDA | 0.5x | 0.3x | -0.3x | -0.7x | 0.0x | 0.7x |
Revenue and profitability
The company's Revenue decreased on 4.0% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 13.3 pp from 19.5% to 6.1% in 2015.
Gross Margin decreased on 2.9 pp from 72.9% to 70.1% in 2015. SG&A as a % of Revenue increased on 3.7 pp from 14.0% to 17.7% in 2015.
Net Income marign dropped on 25.2 pp from 19.7% to -5.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Future Bright Holdings Ltd had CAPEX/Revenue of 24.9%. CAPEX/Revenue jumped on 22.4 pp from 2.6% in 2012 to 24.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 21.8%.Future Bright Holdings Ltd has spent a lot to CAPEX (406% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (0.10%) and negative ROE (-3.99%). ROIC decreased on 8.9 pp from 9.0% to 0.10% in 2015. ROE dropped on 20.8 pp from 16.8% to -4.0% in 2015.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and 4.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from -0.7x to 0.035x in 2015. Debt dropped on 36.3% in 2015 while cash dropped on 52.9% in 2015.
Appendix 1: Peers in Retail
Below you can find Future Bright Holdings Ltd benchmarking vs. other companies in Retail 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 |
|---|
| 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 (111 companies) | 23.5% | 10.3% | 6.0% | 3.1% | -1.8% |
|---|
| Future Bright Holdings Ltd ($703) | | 18.2% | 15.5% | 15.1% | -4.0% |
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 (100 companies) | 40.4% | 37.8% | 39.5% | 35.5% | 46.0% |
|---|
| Future Bright Holdings Ltd ($703) | 36.4% | 36.7% | 36.4% | 72.9% | 70.1% |
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% | 39.6% |
| 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 (110 companies) | 13.1% | 9.7% | 7.1% | 8.3% | 8.2% |
|---|
| Future Bright Holdings Ltd ($703) | 30.3% | 30.7% | 28.3% | 19.5% | 6.1% |
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% | |
| 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% | 17.7% |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| Energy International Investments Holdings Ltd ($353) | 53.5% | 33.6% | 19.0% | 27.3% | |
| |
|---|
| Median (111 companies) | 3.9% | 4.0% | 3.6% | 3.5% | 2.7% |
|---|
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | 24.9% |
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 (111 companies) | 16.6% | 12.0% | 8.2% | 8.4% | 6.0% |
|---|
| Future Bright Holdings Ltd ($703) | 29.0% | 20.2% | 15.9% | 9.0% | 0.1% |
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 (86 companies) | -0.8x | -0.6x | -0.9x | -0.2x | -0.5x |
|---|
| Future Bright Holdings Ltd ($703) | 0.5x | 0.3x | -0.3x | -0.7x | 0.0x |
