Co-Prosperity Holdings Ltd reports 259% EBITDA decline and 21.0% Revenue decline
29/03/2016 • About Co-Prosperity Holdings Ltd (
$707) • By InTwits
Co-Prosperity Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Co-Prosperity Holdings Ltd is a company in decline: 2015 revenue growth was -21.0%, 5 years revenue CAGR was -12.3%
- The company operates at negative EBITDA Margin: -15.3%
- Co-Prosperity Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -0.2% for the sames years0
- Co-Prosperity Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 1.1%.
- CAPEX is quite volatile: 2.0 in 2015, 11.2 in 2014, 6.3 in 2013, 85.5 in 2012, 5.9 in 2011
- The company has unprofitable business model: ROIC is at -12.9%
- It operates with high leverage: Net Debt/EBITDA is 1.8x while industry average is 0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Co-Prosperity Holdings Ltd ($707) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 620.1 | 373.9 | 402.7 | 345.8 | 273.3 | -21.0% |
| Gross Profit | 49.2 | 28.3 | -33.6 | 43.4 | -37.8 | -187.2% |
| SG&A | | 34.0 | 33.4 | 29.5 | 29.5 | -0.1% |
| EBITDA | 41.4 | 15.3 | -46.1 | 26.3 | -41.7 | -258.6% |
| Net Income | -105.5 | -69.4 | -164.6 | 20.8 | -6.9 | -133.2% |
Balance Sheet
|
|---|
| Cash | 42.0 | 21.3 | 52.2 | 25.8 | 76.2 | 195.4% |
| Short Term Debt | 347.4 | 475.2 | 277.2 | 143.3 | 185.8 | 29.6% |
| Long Term Debt | 38.2 | 80.4 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 5.9 | 85.5 | 6.3 | 11.2 | 2.0 | -82.4% |
Ratios
|
|---|
| Revenue growth | 17.9% | -39.7% | 7.7% | -14.1% | -21.0% | |
| EBITDA growth | -58.3% | -62.9% | -400.6% | -157.0% | -258.6% | |
| Gross Margin | 7.9% | 7.6% | -8.3% | 12.5% | -13.8% | -26.4% |
| EBITDA Margin | 6.7% | 4.1% | -11.5% | 7.6% | -15.3% | -22.9% |
| Net Income Margin | -17.0% | -18.5% | -40.9% | 6.0% | -2.5% | -8.5% |
| SG&A, % of revenue | | 9.1% | 8.3% | 8.5% | 10.8% | 2.2% |
| CAPEX, % of revenue | 1.0% | 22.9% | 1.6% | 3.2% | 0.7% | -2.5% |
| ROIC | 1.3% | -1.3% | -11.1% | 3.5% | -12.9% | -16.3% |
| ROE | -26.7% | -22.4% | -85.1% | 12.7% | -2.8% | -15.5% |
| Net Debt/EBITDA | 8.3x | 34.8x | | 4.5x | | -4.5x |
Revenue and profitability
The company's Revenue dropped on 21.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 22.9 pp from 7.6% to -15.3% in 2015.
Gross Margin dropped on 26.4 pp from 12.5% to -13.8% in 2015. SG&A as a % of Revenue increased on 2.2 pp from 8.5% to 10.8% in 2015.
Net Income marign decreased on 8.5 pp from 6.0% to -2.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.72%. Co-Prosperity Holdings Ltd's CAPEX/Revenue dropped on 22.1 pp from 22.9% in 2012 to 0.72% in 2015. It's average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at negative ROIC (-12.85%) and ROE (-2.83%). ROIC dropped on 16.3 pp from 3.5% to -12.9% in 2015. ROE dropped on 15.5 pp from 12.7% to -2.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is . Net Debt / EBITDA dropped on 4.5x from 4.5x to in 2015. Debt surged on 29.6% in 2015 while cash jumped on 195% in 2015.
Appendix 1: Peers in Textiles
Below you can find Co-Prosperity Holdings 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 |
|---|
| China Weaving Materials Holdings Ltd ($3778) | | -15.4% | -4.2% | -3.8% | 53.9% |
| Easyknit Enterprises Holdings Ltd ($616) | | 9.6% | 10.2% | 7.3% | 22.3% |
| Kingdom Holding Co Ltd ($528) | | 1.1% | 6.0% | 20.0% | 12.2% |
| Kam Hing International Holdings Ltd ($2307) | | 0.9% | -4.3% | 1.6% | 4.2% |
| Zhejiang Yonglong Enterprises Co Ltd ($8211) | | -33.5% | 58.8% | -8.6% | 1.8% |
| |
|---|
| Median (17 companies) | -5.2% | 0.5% | -4.3% | -6.2% | -4.4% |
|---|
| Co-Prosperity Holdings Ltd ($707) | | -39.7% | 7.7% | -14.1% | -21.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Art Textile Technology International Co Ltd ($565) | 13.9% | 9.4% | 11.8% | 18.0% | 81.8% |
| TAI Ping Carpet International Ltd ($146) | 40.4% | 41.0% | 45.4% | 46.7% | 46.6% |
| Texwinca Holdings Ltd ($321) | 33.7% | 29.6% | 30.9% | 33.3% | 34.1% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 5.6% | 4.9% | 7.3% | 24.9% | 28.8% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 30.3% | 31.1% | 32.5% | 32.5% | 28.3% |
| |
|---|
| Median (16 companies) | 16.7% | 17.2% | 17.2% | 15.3% | 18.2% |
|---|
| Co-Prosperity Holdings Ltd ($707) | 7.9% | 7.6% | -8.3% | 12.5% | -13.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Weiqiao Textile Co ($2698) | 10.2% | 17.5% | 20.2% | 21.4% | 30.8% |
| 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% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 3.2% | 2.5% | 5.1% | 17.5% | 18.9% |
| Pacific Textiles Holdings Ltd ($1382) | 19.5% | 19.1% | 19.0% | 19.5% | 18.4% |
| |
|---|
| Median (16 companies) | 13.9% | 13.1% | 10.4% | 11.7% | 12.7% |
|---|
| Co-Prosperity Holdings Ltd ($707) | 6.7% | 4.1% | -11.5% | 7.6% | -15.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Art Textile Technology International Co Ltd ($565) | 2.6% | 1.0% | 1.9% | 3.9% | 105.3% |
| Kam Hing International Holdings Ltd ($2307) | 5.5% | 10.6% | 10.5% | 7.6% | 8.3% |
| TAI Ping Carpet International Ltd ($146) | 6.3% | 8.2% | 10.1% | 6.9% | 7.4% |
| Victory City International Holdings Ltd ($539) | 2.3% | 4.2% | 10.1% | 8.6% | 6.8% |
| Yongsheng Advanced Materials Co Ltd ($3608) | 0.6% | 0.3% | 0.4% | 3.2% | 6.1% |
| |
|---|
| Median (16 companies) | 2.7% | 2.6% | 1.9% | 4.7% | 4.1% |
|---|
| Co-Prosperity Holdings Ltd ($707) | 1.0% | 22.9% | 1.6% | 3.2% | 0.7% |
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% |
| 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% |
| CECEP COSTIN New Materials Group Ltd ($2228) | 24.2% | 22.3% | 20.1% | 17.6% | 11.0% |
| Texwinca Holdings Ltd ($321) | 15.5% | 8.3% | 5.3% | 5.5% | 8.1% |
| |
|---|
| Median (17 companies) | 7.7% | 5.2% | 5.3% | 4.2% | 6.1% |
|---|
| Co-Prosperity Holdings Ltd ($707) | 1.3% | -1.3% | -11.1% | 3.5% | -12.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangdong Tannery Ltd ($1058) | 8.9x | 6.5x | 5.8x | 11.6x | |
| 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 |
| 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 | 1.3x | 0.5x | 0.5x |
|---|
| Co-Prosperity Holdings Ltd ($707) | 8.3x | 34.8x | | 4.5x | |
