China Creative Home Group Ltd reports 71.6% CAPEX decline and 9.0% Revenue decline
22/03/2016 • About China Creative Home Group Ltd (
$1678) • By InTwits
China Creative Home Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 28.5% in 2015 vs. 32.6% in 2014 vs. 33.1% in 2011
- China Creative Home Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.4%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: 168 in 2015, 592 in 2014, 28.3 in 2013, 11.6 in 2012, 26.7 in 2011
- The company has highly profitable business model: ROIC is at 15.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Creative Home Group Ltd ($1678) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 804 | 969 | 1,196 | 1,409 | 1,282 | -9.0% |
| Gross Profit | 331 | 428 | 529 | 569 | 473 | -16.8% |
| SG&A | 78 | 96 | 143 | 143 | 137 | -4.0% |
| EBITDA | 266 | 349 | 404 | 459 | 366 | -20.3% |
| Net Income | 218 | 262 | 303 | 355 | 299 | -15.8% |
Balance Sheet
|
|---|
| Cash | 5 | 344 | 996 | 707 | 720 | 1.9% |
| Short Term Debt | 71 | 218 | 64 | 67 | 49 | -26.6% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 27 | 12 | 28 | 592 | 168 | -71.6% |
Ratios
|
|---|
| Revenue growth | 7.0% | 20.5% | 23.4% | 17.9% | -9.0% | |
| EBITDA growth | -2.0% | 31.0% | 15.8% | 13.6% | -20.3% | |
| Gross Margin | 41.2% | 44.2% | 44.3% | 40.4% | 36.9% | -3.5% |
| EBITDA Margin | 33.1% | 36.0% | 33.8% | 32.6% | 28.5% | -4.0% |
| Net Income Margin | 27.1% | 27.0% | 25.4% | 25.2% | 23.3% | -1.9% |
| SG&A, % of revenue | 9.7% | 10.0% | 11.9% | 10.1% | 10.7% | 0.6% |
| CAPEX, % of revenue | 3.3% | 1.2% | 2.4% | 42.0% | 13.1% | -28.9% |
| ROIC | 37.6% | 38.8% | 28.1% | 23.6% | 15.3% | -8.3% |
| ROE | 38.2% | 37.3% | 25.0% | 20.0% | 14.0% | -6.0% |
| Net Debt/EBITDA | 0.2x | -0.4x | -2.3x | -1.4x | -1.8x | -0.4x |
Revenue and profitability
The company's Revenue decreased on 9.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.0 pp from 32.6% to 28.5% in 2015.
Gross Margin decreased on 3.5 pp from 40.4% to 36.9% in 2015. SG&A as a % of Revenue increased slightly on 0.55 pp from 10.1% to 10.7% in 2015.
Net Income marign decreased slightly on 1.9 pp from 25.2% to 23.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 13.1%. CAPEX/Revenue surged on 11.9 pp from 1.2% in 2012 to 13.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 19.1%.
Return on investment
The company operates at good ROIC (15.31%) and ROE (14.01%). ROIC decreased on 8.3 pp from 23.6% to 15.3% in 2015. ROE decreased on 6.0 pp from 20.0% to 14.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 0.4x from -1.4x to -1.8x in 2015. Debt dropped on 26.6% in 2015 while cash increased slightly on 1.9% in 2015.
Appendix 1: Peers in Housewares
Below we provide China Creative Home Group Ltd benchmarking against other companies in Housewares 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 Strategic Holdings Ltd ($235) | -24.1% | -39.2% | 1,832.6% | 281.4% | |
| International Housewares Retail Co Ltd ($1373) | | 19.0% | 23.7% | 16.6% | 11.7% |
| World Houseware Holdings Ltd ($713) | | -4.8% | -7.4% | -0.4% | 0.2% |
| Bolina Holding Co Ltd ($1190) | 76.5% | 24.6% | 11.8% | -5.2% | |
| Perfectech International Holdings Ltd ($765) | -13.7% | -21.9% | -3.5% | -9.3% | |
| |
|---|
| Median (5 companies) | -13.7% | -4.8% | 11.8% | -0.4% | 6.0% |
|---|
| China Creative Home Group Ltd ($1678) | | 20.5% | 23.4% | 17.9% | -9.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| International Housewares Retail Co Ltd ($1373) | 42.4% | 44.5% | 46.1% | 46.5% | 46.3% |
| Bolina Holding Co Ltd ($1190) | 46.3% | 47.7% | 46.8% | 43.5% | |
| Perfectech International Holdings Ltd ($765) | 16.7% | 23.9% | 26.6% | 25.1% | |
| World Houseware Holdings Ltd ($713) | 8.8% | 13.1% | 10.3% | 10.8% | 14.6% |
| China Strategic Holdings Ltd ($235) | 43.3% | 11.4% | 11.7% | 7.4% | |
| |
|---|
| Median (5 companies) | 42.4% | 23.9% | 26.6% | 25.1% | 30.4% |
|---|
| China Creative Home Group Ltd ($1678) | 41.2% | 44.2% | 44.3% | 40.4% | 36.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bolina Holding Co Ltd ($1190) | 36.5% | 37.8% | 34.0% | 28.7% | |
| Perfectech International Holdings Ltd ($765) | 7.3% | 14.6% | 14.9% | 11.7% | |
| International Housewares Retail Co Ltd ($1373) | 8.8% | 9.8% | 9.6% | 8.5% | 6.7% |
| World Houseware Holdings Ltd ($713) | 2.1% | 7.1% | 3.4% | 2.4% | 4.2% |
| China Strategic Holdings Ltd ($235) | -727.1% | -1,603.6% | -25.0% | -2.8% | |
| |
|---|
| Median (5 companies) | 7.3% | 9.8% | 9.6% | 8.5% | 5.4% |
|---|
| China Creative Home Group Ltd ($1678) | 33.1% | 36.0% | 33.8% | 32.6% | 28.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Perfectech International Holdings Ltd ($765) | 5.5% | 2.3% | 16.2% | 19.8% | |
| World Houseware Holdings Ltd ($713) | 2.2% | 3.6% | 6.2% | 12.4% | 5.1% |
| International Housewares Retail Co Ltd ($1373) | 1.6% | 2.7% | 3.0% | 2.0% | 3.9% |
| Bolina Holding Co Ltd ($1190) | 12.3% | 5.2% | 4.4% | 1.8% | |
| China Strategic Holdings Ltd ($235) | 0.0% | 0.0% | 0.0% | 0.6% | |
| |
|---|
| Median (5 companies) | 2.2% | 2.7% | 4.4% | 2.0% | 4.5% |
|---|
| China Creative Home Group Ltd ($1678) | 3.3% | 1.2% | 2.4% | 42.0% | 13.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| International Housewares Retail Co Ltd ($1373) | | 44.7% | 38.4% | 20.3% | 11.8% |
| Bolina Holding Co Ltd ($1190) | 51.7% | 38.8% | 24.7% | 16.8% | |
| Perfectech International Holdings Ltd ($765) | 5.4% | 11.7% | 11.8% | 7.6% | |
| China Strategic Holdings Ltd ($235) | -8.3% | -12.0% | -4.0% | -1.3% | |
| World Houseware Holdings Ltd ($713) | -3.0% | 1.6% | -1.9% | -2.8% | -1.8% |
| |
|---|
| Median (5 companies) | 1.2% | 11.7% | 11.8% | 7.6% | 5.0% |
|---|
| China Creative Home Group Ltd ($1678) | 37.6% | 38.8% | 28.1% | 23.6% | 15.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| World Houseware Holdings Ltd ($713) | 4.9x | 1.4x | 4.7x | 11.7x | 7.4x |
| Perfectech International Holdings Ltd ($765) | -1.4x | -1.8x | -1.7x | -0.7x | |
| Bolina Holding Co Ltd ($1190) | 0.2x | -1.7x | -1.1x | -1.9x | |
| International Housewares Retail Co Ltd ($1373) | -0.7x | -0.2x | -0.3x | -2.7x | -2.8x |
| |
|---|
| Median (4 companies) | -0.3x | -0.9x | -0.7x | -1.3x | 2.3x |
|---|
| China Creative Home Group Ltd ($1678) | 0.2x | -0.4x | -2.3x | -1.4x | -1.8x |
