Hop Hing Group Holdings Ltd ROIC surged on 10.2 pp from 12.9% to 23.2% in 2015 and EBITDA increased on 9.3%
24/03/2016 • About Hop Hing Group Holdings Ltd (
$47) • By InTwits
Hop Hing Group Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hop Hing Group Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's in pair with industry average of 5.6%.
- CAPEX is quite volatile: 41.0 in 2015, 27.9 in 2014, 31.2 in 2013, 19.0 in 2012, 187 in 2011
- The company has highly profitable business model: ROIC is at 23.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hop Hing Group Holdings Ltd ($47) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,450 | 1,971 | 2,111 | 2,158 | 2,050 | -5.0% |
| Gross Profit | 1,206 | 1,187 | 1,302 | 1,340 | 1,292 | -3.6% |
| SG&A | 166 | 137 | 174 | 217 | 1,202 | 455.2% |
| EBITDA | 296 | 315 | 222 | 195 | 213 | 9.3% |
| Net Income | 75 | 130 | 14 | 35 | 66 | 86.0% |
Balance Sheet
|
|---|
| Cash | 465 | 192 | 226 | 337 | 356 | 5.6% |
| Short Term Debt | 255 | 163 | 27 | 30 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 101 | 173 | 160 | 104 | 90 | -13.2% |
Ratios
|
|---|
| Revenue growth | 218.6% | -19.5% | 7.1% | 2.2% | -5.0% | |
| EBITDA growth | 739.3% | 6.5% | -29.5% | -12.3% | 9.3% | |
| Gross Margin | 49.2% | 60.2% | 61.7% | 62.1% | 63.0% | 0.9% |
| EBITDA Margin | 12.1% | 16.0% | 10.5% | 9.0% | 10.4% | 1.4% |
| Net Income Margin | 3.1% | 6.6% | 0.7% | 1.6% | 3.2% | 1.6% |
| SG&A, % of revenue | 6.8% | 6.9% | 8.3% | 10.0% | 58.6% | 48.6% |
| CAPEX, % of revenue | 4.1% | 8.8% | 7.6% | 4.8% | 4.4% | -0.4% |
| ROIC | 24.3% | 21.8% | 13.1% | 12.9% | 23.2% | 10.2% |
| ROE | 14.3% | 20.2% | 2.5% | 8.4% | 15.2% | 6.7% |
| Net Debt/EBITDA | -0.7x | -0.1x | -0.9x | -1.6x | -1.7x | -0.1x |
Revenue and profitability
Hop Hing Group Holdings Ltd's Revenue decreased on 5.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.4 pp from 9.0% to 10.4% in 2015.
Gross Margin increased slightly on 0.92 pp from 62.1% to 63.0% in 2015. SG&A as a % of Revenue surged on 48.6 pp from 10.0% to 58.6% in 2015.
Net Income marign increased slightly on 1.6 pp from 1.6% to 3.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
Hop Hing Group Holdings Ltd's CAPEX/Revenue was 4.4% in 2015. Hop Hing Group Holdings Ltd's CAPEX/Revenue decreased on 4.4 pp from 8.8% in 2012 to 4.4% in 2015. Average CAPEX/Revenue for the last three years was 5.6%.
Return on investment
The company operates at high and attractive ROIC (23.16%) while ROE is a bit lower (15.15%). ROIC surged on 10.2 pp from 12.9% to 23.2% in 2015. ROE increased on 6.7 pp from 8.4% to 15.2% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash increased on 5.6% in 2015.
Appendix 1: Peers in Retail
Below we provide Hop Hing Group Holdings 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) | | 23.1% | 15.9% | 36.0% | -21.0% |
| |
|---|
| Median (112 companies) | 29.9% | 10.7% | 6.0% | 3.3% | -0.8% |
|---|
| Hop Hing Group Holdings Ltd ($47) | | -19.5% | 7.1% | 2.2% | -5.0% |
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% | 81.6% |
| |
|---|
| Median (101 companies) | 38.8% | 36.7% | 36.4% | 35.3% | 42.0% |
|---|
| Hop Hing Group Holdings Ltd ($47) | 49.2% | 60.2% | 61.7% | 62.1% | 63.0% |
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% | 41.4% |
| 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 (111 companies) | 13.2% | 9.6% | 7.2% | 8.8% | 6.3% |
|---|
| Hop Hing Group Holdings Ltd ($47) | 12.1% | 16.0% | 10.5% | 9.0% | 10.4% |
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% | 17.6% |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | 24.9% |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | 9.3% |
| 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% |
| |
|---|
| Median (112 companies) | 3.8% | 4.0% | 3.6% | 3.4% | 3.0% |
|---|
| Hop Hing Group Holdings Ltd ($47) | 4.1% | 8.8% | 7.6% | 4.8% | 4.4% |
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 (112 companies) | 16.6% | 12.2% | 8.2% | 8.4% | 5.7% |
|---|
| Hop Hing Group Holdings Ltd ($47) | 24.3% | 21.8% | 13.1% | 12.9% | 23.2% |
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 | 3.4x |
| 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 | 2.6x |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | 7.3x |
| |
|---|
| Median (87 companies) | -0.8x | -0.5x | -0.8x | -0.2x | -0.5x |
|---|
| Hop Hing Group Holdings Ltd ($47) | -0.7x | -0.1x | -0.9x | -1.6x | -1.7x |
