China Outfitters Holdings Ltd EBITDA dropped on 49.0% in 2015 and Revenue decreased on 7.5%
21/03/2016 • About China Outfitters Holdings Ltd (
$1146) • By InTwits
China Outfitters Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 14.6% in 2015 vs. 26.5% in 2014 vs. 43.9% in 2011
- EBITDA Margin is quite volatile: 14.6% in 2015, 26.5% in 2014, 38.2% in 2013, 42.0% in 2012, 43.9% in 2011
- China Outfitters Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's in pair with industry average of 4.4%.
- CAPEX is quite volatile: 50.4 in 2015, 97.1 in 2014, 118 in 2013, 14.2 in 2012, 15.9 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Outfitters Holdings Ltd ($1146) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,248 | 1,408 | 1,247 | 1,094 | 1,013 | -7.5% |
| Gross Profit | 950 | 1,054 | 927 | 766 | 665 | -13.1% |
| SG&A | 419 | 519 | 505 | 508 | 559 | 10.1% |
| EBITDA | 547 | 591 | 476 | 290 | 148 | -49.0% |
| Net Income | 408 | 460 | 384 | 204 | 105 | -48.5% |
Balance Sheet
|
|---|
| Cash | 1,035 | 379 | 347 | 190 | 165 | -13.2% |
| Short Term Debt | 0 | 0 | 0 | 647 | 360 | -44.3% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 16 | 14 | 118 | 97 | 50 | -48.1% |
Ratios
|
|---|
| Revenue growth | 37.1% | 12.8% | -11.4% | -12.3% | -7.5% | |
| EBITDA growth | 43.7% | 8.0% | -19.5% | -39.1% | -49.0% | |
| Gross Margin | 76.1% | 74.9% | 74.3% | 70.0% | 65.7% | -4.2% |
| EBITDA Margin | 43.9% | 42.0% | 38.2% | 26.5% | 14.6% | -11.9% |
| Net Income Margin | 32.7% | 32.7% | 30.8% | 18.6% | 10.4% | -8.3% |
| SG&A, % of revenue | 33.5% | 36.9% | 40.5% | 46.4% | 55.2% | 8.8% |
| CAPEX, % of revenue | 1.3% | 1.0% | 9.4% | 8.9% | 5.0% | -3.9% |
| ROIC | 39.9% | 29.5% | 21.5% | 12.1% | 6.0% | -6.1% |
| ROE | 34.7% | 25.4% | 18.9% | 11.0% | 6.4% | -4.5% |
| Net Debt/EBITDA | -1.9x | -0.6x | -0.7x | 1.6x | 1.3x | -0.3x |
Revenue and profitability
The company's Revenue decreased on 7.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.9 pp from 26.5% to 14.6% in 2015.
Gross Margin decreased on 4.2 pp from 70.0% to 65.7% in 2015. SG&A as a % of Revenue increased on 8.8 pp from 46.4% to 55.2% in 2015.
Net Income marign decreased on 8.3 pp from 18.6% to 10.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.0% in 2015. The company showed CAPEX/Revenue growth of 4.0 pp from 1.0% in 2012 to 5.0% in 2015. Average CAPEX/Revenue for the last three years was 7.8%.
Return on investment
The company operates at low ROIC (5.99%) and ROE (6.44%). ROIC decreased on 6.1 pp from 12.1% to 6.0% in 2015. ROE decreased on 4.5 pp from 11.0% to 6.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 2.4x. Net Debt / EBITDA dropped on 0.3x from 1.6x to 1.3x in 2015. Debt dropped on 44.3% in 2015 while cash dropped on 13.2% in 2015.
Appendix 1: Peers in Apparel
Below you can find China Outfitters Holdings Ltd benchmarking vs. other companies in Apparel 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 |
|---|
| Ares Asia Ltd ($645) | | | | 144.2% | 14.7% |
| Texhong Textile Group Ltd ($2678) | | 6.8% | 12.1% | 27.2% | 1.0% |
| Win Hanverky Holdings Ltd ($3322) | 11.5% | -7.5% | -0.3% | 21.1% | |
| Symphony Holdings Ltd/Hong Kong ($1223) | | -94.0% | 46.8% | 20.4% | 33.1% |
| L & A International Holdings Ltd/ Hong Kong ($8387) | 33.1% | 27.9% | 7.9% | 20.4% | |
| |
|---|
| Median (47 companies) | 20.2% | 5.2% | 2.6% | 5.0% | -0.9% |
|---|
| China Outfitters Holdings Ltd ($1146) | | 12.8% | -11.4% | -12.3% | -7.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 67.8% | 71.5% | 72.1% | 73.8% | 71.8% |
| C.banner International Holdings Ltd ($1028) | 63.5% | 63.3% | 62.0% | 63.4% | 61.1% |
| S Culture International Holdings Ltd ($1255) | 62.8% | 64.7% | 63.7% | 62.9% | 61.9% |
| Crocodile Garments ($122) | 65.5% | 64.7% | 60.7% | 60.4% | 62.1% |
| Symphony Holdings Ltd/Hong Kong ($1223) | 15.4% | 38.5% | 42.3% | 59.6% | 75.6% |
| |
|---|
| Median (46 companies) | 24.0% | 24.4% | 23.0% | 23.4% | 26.9% |
|---|
| China Outfitters Holdings Ltd ($1146) | 76.1% | 74.9% | 74.3% | 70.0% | 65.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HOSA International Ltd ($2200) | 46.3% | 44.4% | 42.2% | 37.6% | 26.7% |
| Prada SpA ($1913) | 25.9% | 29.6% | 31.7% | 31.7% | 26.8% |
| China Lilang Ltd ($1234) | 26.7% | 26.3% | 26.9% | 29.4% | 30.6% |
| Cabbeen Fashion Ltd ($2030) | 16.0% | 25.0% | 29.7% | 28.4% | 29.0% |
| Fuguiniao Co Ltd ($1819) | 22.2% | 24.5% | 26.1% | 26.7% | 27.9% |
| |
|---|
| Median (47 companies) | 10.4% | 9.5% | 8.9% | 5.6% | 5.8% |
|---|
| China Outfitters Holdings Ltd ($1146) | 43.9% | 42.0% | 38.2% | 26.5% | 14.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 9.2% | 9.7% | 10.6% | 15.3% | 10.2% |
| Symphony Holdings Ltd/Hong Kong ($1223) | 14.9% | 136.9% | 70.3% | 13.5% | 28.5% |
| Mascotte Holdings Ltd ($136) | 0.4% | 74.2% | 45.0% | 12.2% | 0.6% |
| Addchance Holdings Ltd ($3344) | 12.2% | 8.6% | 9.3% | 10.9% | |
| Active Group Holdings Ltd ($1096) | 1.3% | 17.4% | 3.5% | 10.7% | |
| |
|---|
| Median (47 companies) | 1.9% | 2.2% | 3.0% | 2.0% | 1.5% |
|---|
| China Outfitters Holdings Ltd ($1146) | 1.3% | 1.0% | 9.4% | 8.9% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 24.6% | 32.1% | 37.4% | 34.0% | 21.9% |
| Sitoy Group Holdings Ltd ($1023) | 62.1% | 39.3% | 28.7% | 31.8% | 22.0% |
| HOSA International Ltd ($2200) | 44.2% | 34.6% | 32.0% | 28.2% | 16.5% |
| Miko International Holdings Ltd ($1247) | 75.1% | 60.9% | 48.8% | 27.3% | |
| Cabbeen Fashion Ltd ($2030) | 25.7% | 32.3% | 32.9% | 26.5% | 27.0% |
| |
|---|
| Median (47 companies) | 11.5% | 8.6% | 6.7% | 3.2% | 4.6% |
|---|
| China Outfitters Holdings Ltd ($1146) | 39.9% | 29.5% | 21.5% | 12.1% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| High Fashion International Ltd ($608) | 4.9x | 16.7x | 27.7x | 11.2x | |
| Citychamp Watch & Jewellery Group Ltd ($256) | -0.9x | 0.6x | 0.4x | 2.6x | |
| S Culture International Holdings Ltd ($1255) | 0.8x | 1.4x | 0.7x | 2.4x | 158.1x |
| UKF Holdings Ltd ($1468) | 0.9x | 1.2x | -3.2x | 2.4x | 0.4x |
| Texhong Textile Group Ltd ($2678) | 3.9x | 1.4x | 1.3x | 2.3x | 1.4x |
| |
|---|
| Median (33 companies) | -0.7x | -0.3x | -0.7x | -0.3x | -0.1x |
|---|
| China Outfitters Holdings Ltd ($1146) | -1.9x | -0.6x | -0.7x | 1.6x | 1.3x |
