L & A International Holdings Ltd/ Hong Kong EBITDA dropped on 80.0% in 2015 and EBITDA Margin decreased on 6.0 pp from 7.5% to 1.5%
24/03/2016 • About L & A International Holdings Ltd/ Hong Kong (
$8387) • By InTwits
L & A International Holdings Ltd/ Hong Kong reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- L & A International Holdings Ltd/ Hong Kong doesn't have a profitable business model yet: 2015 ROIC is -3.3%
- EBITDA Margin is quite volatile: 1.5% in 2015, 7.5% in 2014, 12.5% in 2013, 12.4% in 2012, 13.4% in 2011
- L & A International Holdings Ltd/ Hong Kong has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 4.4%.
- CAPEX is quite volatile: 17.3 in 2015, 4.6 in 2014, 28.1 in 2013, 16.5 in 2012, 39.9 in 2011
- The company has unprofitable business model: ROIC is at -3.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
L & A International Holdings Ltd/ Hong Kong ($8387) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 279.8 | 357.8 | 386.3 | 464.9 | 465.7 | 0.2% |
| EBITDA | 37.6 | 44.5 | 48.2 | 34.9 | 7.0 | -80.0% |
| Net Income | 22.9 | 23.4 | 23.8 | 81.6 | 90.2 | 10.6% |
Balance Sheet
|
|---|
| Cash | 47.2 | 61.1 | 65.6 | 69.3 | 96.7 | 39.5% |
| Short Term Debt | 2.9 | 2.7 | 2.4 | 13.1 | 35.8 | 172.6% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 39.9 | 16.5 | 28.1 | 4.6 | 17.3 | 273.6% |
Ratios
|
|---|
| Revenue growth | 33.1% | 27.9% | 7.9% | 20.4% | 0.2% | |
| EBITDA growth | 68.7% | 18.3% | 8.4% | -27.6% | -80.0% | |
| EBITDA Margin | 13.4% | 12.4% | 12.5% | 7.5% | 1.5% | -6.0% |
| Net Income Margin | 8.2% | 6.5% | 6.2% | 17.6% | 19.4% | 1.8% |
| CAPEX, % of revenue | 14.3% | 4.6% | 7.3% | 1.0% | 3.7% | 2.7% |
| ROIC | 47.7% | 28.0% | 23.7% | 7.0% | -3.3% | -10.3% |
| ROE | 43.4% | 23.7% | 20.3% | 49.6% | 21.8% | -27.8% |
| Net Debt/EBITDA | -1.2x | -1.3x | -1.3x | -1.6x | -8.7x | -7.1x |
Revenue and profitability
The company's Revenue showed almost no change in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 12.4 pp from 86.6% to 99.0% in FY2015.
Net Income marign increased slightly on 1.8 pp from 17.6% to 19.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 L & A International Holdings Ltd/ Hong Kong had CAPEX/Revenue of 3.7%. L & A International Holdings Ltd/ Hong Kong showed small CAPEX/Revenue decline of 0.90 pp from 4.6% in 2012 to 3.7% in 2015. Average CAPEX/Revenue for the last three years was 4.0%.L & A International Holdings Ltd/ Hong Kong maintained rich investment policy and has spent a lot to CAPEX (248% of EBITDA).
Return on investment
The company operates at negative ROIC (-3.28%) and low but positive ROE (21.78%). ROIC dropped on 10.3 pp from 7.0% to -3.3% in 2015. ROE dropped on 27.8 pp from 49.6% to 21.8% in 2015.
Leverage (Debt)
Debt level is -8.7x Net Debt / EBITDA and 5.1x Debt / EBITDA. Net Debt / EBITDA dropped on 7.1x from -1.6x to -8.7x in 2015. Debt surged on 173% in 2015 while cash surged on 39.5% in 2015.
Appendix 1: Peers in Apparel
Below you can find L & A International Holdings Ltd/ Hong Kong 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 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | | -94.0% | 46.8% | 20.4% | 33.1% |
| Highlight China IoT International Ltd ($1682) | | 0.8% | 17.7% | -73.7% | 29.6% |
| Kingmaker Footwear Holdings Ltd ($1170) | | 10.0% | 9.3% | 6.3% | 23.7% |
| Cabbeen Fashion Ltd ($2030) | | 5.6% | 0.4% | 16.4% | 23.5% |
| Ares Asia Ltd ($645) | | | | 144.2% | 14.7% |
| |
|---|
| Median (41 companies) | 27.5% | 5.2% | 2.6% | 5.0% | -2.1% |
|---|
| L & A International Holdings Ltd/ Hong Kong ($8387) | | 27.9% | 7.9% | 20.4% | 0.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 15.4% | 38.5% | 42.3% | 59.6% | 75.6% |
| Prada SpA ($1913) | 67.8% | 71.5% | 72.1% | 73.8% | 71.8% |
| China Outfitters Holdings Ltd ($1146) | 76.1% | 74.9% | 74.3% | 70.0% | 65.7% |
| Crocodile Garments ($122) | 65.5% | 64.7% | 60.7% | 60.4% | 62.1% |
| S Culture International Holdings Ltd ($1255) | 62.8% | 64.7% | 63.7% | 62.9% | 61.9% |
| |
|---|
| Median (41 companies) | 24.4% | 24.7% | 23.3% | 24.8% | 26.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| Prada SpA ($1913) | 25.9% | 29.6% | 31.7% | 31.7% | 26.8% |
| Shenzhou International Group Holdings Ltd ($2313) | 26.8% | 26.4% | 26.2% | 26.1% | 26.7% |
| |
|---|
| Median (41 companies) | 10.4% | 9.6% | 8.9% | 6.7% | 7.6% |
|---|
| L & A International Holdings Ltd/ Hong Kong ($8387) | 13.4% | 12.4% | 12.5% | 7.5% | 1.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 14.9% | 136.9% | 70.3% | 13.5% | 28.5% |
| Shenzhou International Group Holdings Ltd ($2313) | 4.7% | 7.3% | 7.9% | 10.2% | 16.1% |
| Crocodile Garments ($122) | 12.5% | 20.1% | 22.1% | 1.8% | 13.5% |
| Texhong Textile Group Ltd ($2678) | 6.7% | 8.9% | 11.8% | 5.8% | 10.5% |
| Prada SpA ($1913) | 9.2% | 9.7% | 10.6% | 15.3% | 10.2% |
| |
|---|
| Median (40 companies) | 1.9% | 2.2% | 3.0% | 2.1% | 2.1% |
|---|
| L & A International Holdings Ltd/ Hong Kong ($8387) | 14.3% | 4.6% | 7.3% | 1.0% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cabbeen Fashion Ltd ($2030) | 25.7% | 32.3% | 32.9% | 26.5% | 27.0% |
| Sitoy Group Holdings Ltd ($1023) | 62.1% | 39.3% | 28.7% | 31.8% | 22.0% |
| Prada SpA ($1913) | 24.6% | 32.1% | 37.4% | 34.0% | 21.9% |
| China Lilang Ltd ($1234) | 32.6% | 27.3% | 19.1% | 19.7% | 20.2% |
| Shenzhou International Group Holdings Ltd ($2313) | 29.6% | 24.0% | 22.9% | 19.6% | 17.9% |
| |
|---|
| Median (41 companies) | 11.5% | 8.7% | 6.9% | 3.6% | 6.0% |
|---|
| L & A International Holdings Ltd/ Hong Kong ($8387) | 47.7% | 28.0% | 23.7% | 7.0% | -3.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| S Culture International Holdings Ltd ($1255) | 0.8x | 1.4x | 0.7x | 2.4x | 158.1x |
| Global Brands Group Holding Ltd ($787) | -0.3x | -0.4x | -0.3x | 1.3x | 2.1x |
| Fuguiniao Co Ltd ($1819) | 0.9x | -0.0x | -0.7x | 0.3x | 1.9x |
| Texhong Textile Group Ltd ($2678) | 3.9x | 1.4x | 1.3x | 2.3x | 1.4x |
| China Outfitters Holdings Ltd ($1146) | -1.9x | -0.6x | -0.7x | 1.6x | 1.3x |
| |
|---|
| Median (31 companies) | -0.5x | -0.3x | -0.7x | -0.1x | -0.3x |
|---|
| L & A International Holdings Ltd/ Hong Kong ($8387) | -1.2x | -1.3x | -1.3x | -1.6x | -8.7x |
