Guangdong Tannery Ltd EBITDA dropped on 131% in 2015 and Revenue dropped on 14.9%
24/03/2016 • About Guangdong Tannery Ltd (
$1058) • By InTwits
Guangdong Tannery Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Guangdong Tannery Ltd doesn't have a profitable business model yet: 2015 ROIC is -3.2%
- EBITDA Margin is quite volatile: -1.1% in 2015, 2.9% in 2014, 4.1% in 2013, 3.7% in 2012, 2.9% in 2011
- Guangdong Tannery Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 17.6 in 2015, 10.4 in 2014, 6.9 in 2013, 7.3 in 2012, 15.9 in 2011
- The company has unprofitable business model: ROIC is at -3.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guangdong Tannery Ltd ($1058) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 587.0 | 622.9 | 594.6 | 767.2 | 652.7 | -14.9% |
| Gross Profit | 28.2 | 30.4 | 37.7 | 37.4 | 8.4 | -77.6% |
| SG&A | 24.4 | 26.3 | 27.7 | 30.4 | 40.9 | 34.6% |
| EBITDA | 16.9 | 23.2 | 24.5 | 22.2 | -6.9 | -131.2% |
| Net Income | 1.2 | 1.0 | 5.7 | 2.0 | -38.3 | -2,019.4% |
Balance Sheet
|
|---|
| Cash | 81.7 | 44.5 | 56.6 | 20.4 | 42.2 | 106.4% |
| Short Term Debt | 232.7 | 196.1 | 199.8 | 278.2 | 53.8 | -80.7% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 138.7 | |
Cash flow
|
|---|
| Capex | 15.9 | 7.3 | 6.9 | 10.4 | 17.6 | 70.1% |
Ratios
|
|---|
| Revenue growth | 12.7% | 6.1% | -4.5% | 29.0% | -14.9% | |
| EBITDA growth | -28.3% | 37.1% | 5.8% | -9.5% | -131.2% | |
| Gross Margin | 4.8% | 4.9% | 6.3% | 4.9% | 1.3% | -3.6% |
| EBITDA Margin | 2.9% | 3.7% | 4.1% | 2.9% | -1.1% | -3.9% |
| Net Income Margin | 0.2% | 0.2% | 1.0% | 0.3% | -5.9% | -6.1% |
| SG&A, % of revenue | 4.2% | 4.2% | 4.7% | 4.0% | 6.3% | 2.3% |
| CAPEX, % of revenue | 2.7% | 1.2% | 1.2% | 1.4% | 2.7% | 1.4% |
| ROIC | 1.5% | 2.6% | 2.6% | 1.9% | -3.2% | -5.1% |
| ROE | 0.4% | 0.3% | 1.7% | 0.6% | -11.9% | -12.5% |
| Net Debt/EBITDA | 8.9x | 6.5x | 5.8x | 11.6x | | -11.6x |
Revenue and profitability
Guangdong Tannery Ltd's Revenue dropped on 14.9% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 2.9% to -1.1% in 2015.
Gross Margin decreased on 3.6 pp from 4.9% to 1.3% in 2015. SG&A as a % of Revenue increased on 2.3 pp from 4.0% to 6.3% in 2015.
Net Income marign decreased on 6.1 pp from 0.26% to -5.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.7%. The company showed small growth in CAPEX/Revenue of 1.5 pp from 1.2% in 2012 to 2.7% in 2015. Average CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at negative ROIC (-3.21%) and ROE (-11.93%). ROIC decreased on 5.1 pp from 1.9% to -3.2% in 2015. ROE dropped on 12.5 pp from 0.57% to -11.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.1x and Debt / EBITDA is . Net Debt / EBITDA dropped on 11.6x from 11.6x to in 2015. Debt dropped on 30.8% in 2015 while cash surged on 106% in 2015.
Appendix 1: Peers in Textiles
Below you can find Guangdong Tannery Ltd benchmarking vs. other companies in Textiles 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 |
|---|
| Victory City International Holdings Ltd ($539) | | -5.2% | 6.5% | 31.5% | -4.4% |
| Kingdom Holding Co Ltd ($528) | | 1.1% | 6.0% | 20.0% | 12.2% |
| Pacific Textiles Holdings Ltd ($1382) | | -10.6% | 3.6% | 11.6% | -7.0% |
| Easyknit Enterprises Holdings Ltd ($616) | | 9.6% | 10.2% | 7.3% | 22.3% |
| Kam Hing International Holdings Ltd ($2307) | | 0.9% | -4.3% | 1.6% | 4.2% |
| |
|---|
| Median (20 companies) | 17.9% | -2.6% | -4.2% | -10.1% | -3.5% |
|---|
| Guangdong Tannery Ltd ($1058) | | 6.1% | -4.5% | 29.0% | -14.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TAI Ping Carpet International Ltd ($146) | 40.4% | 41.0% | 45.4% | 46.7% | 46.6% |
| Ping Shan Tea Group Ltd ($364) | 15.3% | 11.2% | 20.8% | 42.9% | |
| Texwinca Holdings Ltd ($321) | 33.7% | 29.6% | 30.9% | 33.3% | 34.1% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 30.3% | 31.1% | 32.5% | 32.5% | 28.3% |
| Easyknit Enterprises Holdings Ltd ($616) | 14.6% | 22.3% | 26.3% | 29.6% | 25.9% |
| |
|---|
| Median (20 companies) | 16.7% | 17.2% | 17.2% | 15.3% | 22.2% |
|---|
| Guangdong Tannery Ltd ($1058) | 4.8% | 4.9% | 6.3% | 4.9% | 1.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ping Shan Tea Group Ltd ($364) | 14.9% | 11.2% | | 39.3% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 26.2% | 28.1% | 28.7% | 30.2% | 23.4% |
| Kingdom Holding Co Ltd ($528) | 29.3% | 26.3% | 25.3% | 24.8% | 23.0% |
| Easyknit Enterprises Holdings Ltd ($616) | 10.4% | 18.4% | 21.3% | 21.4% | 13.2% |
| Weiqiao Textile Co ($2698) | 10.2% | 17.5% | 20.2% | 21.4% | 30.8% |
| |
|---|
| Median (20 companies) | 13.9% | 13.1% | 10.4% | 11.7% | 12.7% |
|---|
| Guangdong Tannery Ltd ($1058) | 2.9% | 3.7% | 4.1% | 2.9% | -1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hua Lien International Holding Co Ltd ($969) | 0.0% | 19.7% | 40.5% | 79.6% | |
| Ping Shan Tea Group Ltd ($364) | 18.1% | 32.0% | | 14.0% | |
| Kingdom Holding Co Ltd ($528) | 6.2% | 8.4% | 18.8% | 10.9% | 5.6% |
| Victory City International Holdings Ltd ($539) | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% |
| Silverman Holdings Ltd ($1616) | 8.7% | 6.5% | 18.0% | 8.4% | |
| |
|---|
| Median (20 companies) | 2.5% | 3.4% | 1.9% | 4.7% | 4.7% |
|---|
| Guangdong Tannery Ltd ($1058) | 2.7% | 1.2% | 1.2% | 1.4% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Textiles Holdings Ltd ($1382) | 28.8% | 23.7% | 26.4% | 31.6% | 25.9% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 24.2% | 22.3% | 20.1% | 17.6% | 11.0% |
| Easyknit Enterprises Holdings Ltd ($616) | | 22.2% | 21.3% | 16.1% | 7.7% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 7.9% | 6.2% | 13.2% | 15.4% | 19.6% |
| Kingdom Holding Co Ltd ($528) | 16.3% | 13.8% | 12.7% | 13.8% | 12.7% |
| |
|---|
| Median (20 companies) | 7.7% | 5.2% | 5.3% | 4.2% | 7.0% |
|---|
| Guangdong Tannery Ltd ($1058) | 1.5% | 2.6% | 2.6% | 1.9% | -3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sijia Group Co ($1863) | -0.1x | 1.6x | 5.3x | 6.4x | |
| China Weaving Materials Holdings Ltd ($3778) | 1.3x | 3.6x | 3.0x | 5.3x | 5.5x |
| Co-Prosperity Holdings Ltd ($707) | 8.3x | 34.8x | | 4.5x | |
| Victory City International Holdings Ltd ($539) | 1.8x | 1.5x | 2.0x | 3.2x | 2.5x |
| Zhejiang Yonglong Enterprises Co Ltd ($8211) | 0.2x | 4.2x | 0.1x | 3.0x | 1.3x |
| |
|---|
| Median (18 companies) | 1.2x | 1.5x | 0.6x | 0.5x | 0.1x |
|---|
| Guangdong Tannery Ltd ($1058) | 8.9x | 6.5x | 5.8x | 11.6x | |
