High Fashion International Ltd Net Debt / EBITDA dropped on 6.0x from 11.2x to 5.2x in 2015 and EBITDA dropped on 27.6%
30/03/2016 • About High Fashion International Ltd (
$608) • By InTwits
High Fashion International Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- High Fashion International Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.7%
- EBITDA Margin is quite volatile: 3.9% in 2015, 5.1% in 2014, 2.0% in 2013, 2.5% in 2012, 5.0% in 2011
- High Fashion International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 4.5%.
- CAPEX is quite volatile: 35.5 in 2015, 57.0 in 2014, 186 in 2013, 57.9 in 2012, 150 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.7%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
High Fashion International Ltd ($608) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,784 | 2,612 | 2,807 | 2,865 | 2,678 | -6.5% |
| Gross Profit | 679 | 648 | 636 | 713 | 575 | -19.4% |
| SG&A | 671 | 638 | 650 | 617 | 551 | -10.7% |
| EBITDA | 138 | 65 | 56 | 146 | 105 | -27.6% |
| Net Income | 254 | 170 | 194 | 101 | 46 | -54.2% |
Balance Sheet
|
|---|
| Cash | 820 | 767 | 987 | 563 | 812 | 44.3% |
| Short Term Debt | 1,497 | 1,848 | 2,418 | 2,195 | 1,365 | -37.8% |
| Long Term Debt | 0 | 0 | 118 | 0 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 150 | 58 | 186 | 57 | 36 | -37.6% |
Ratios
|
|---|
| Revenue growth | 2.2% | -6.2% | 7.5% | 2.1% | -6.5% | |
| EBITDA growth | -22.3% | -53.2% | -13.7% | 160.6% | -27.6% | |
| Gross Margin | 24.4% | 24.8% | 22.7% | 24.9% | 21.5% | -3.4% |
| EBITDA Margin | 5.0% | 2.5% | 2.0% | 5.1% | 3.9% | -1.1% |
| Net Income Margin | 9.1% | 6.5% | 6.9% | 3.5% | 1.7% | -1.8% |
| SG&A, % of revenue | 24.1% | 24.4% | 23.2% | 21.5% | 20.6% | -1.0% |
| CAPEX, % of revenue | 5.4% | 2.2% | 6.6% | 2.0% | 1.3% | -0.7% |
| ROIC | 1.2% | -0.4% | -0.6% | 1.3% | 0.7% | -0.6% |
| ROE | 12.7% | 7.7% | 7.9% | 3.9% | 1.9% | -2.0% |
| Net Debt/EBITDA | 4.9x | 16.7x | 27.7x | 11.2x | 5.2x | -6.0x |
Revenue and profitability
The company's Revenue decreased on 6.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.66 pp from 4.4% to 5.1% in 2015.
Gross Margin decreased on 3.4 pp from 24.9% to 21.5% in 2015. SG&A as a % of Revenue decreased slightly on 0.97 pp from 21.5% to 20.6% in 2015.
Net Income marign decreased slightly on 1.8 pp from 3.5% to 1.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 High Fashion International Ltd had CAPEX/Revenue of 1.3%. CAPEX/Revenue decreased slightly on 0.89 pp from 2.2% in 2012 to 1.3% in 2015. It's average CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at low ROIC (0.73%) and ROE (1.94%). ROIC decreased slightly on 0.58 pp from 1.3% to 0.73% in 2015. ROE decreased slightly on 2.0 pp from 3.9% to 1.9% in 2015.
Leverage (Debt)
Debt level is 5.2x Net Debt / EBITDA and 12.9x Debt / EBITDA. Net Debt / EBITDA dropped on 6.0x from 11.2x to 5.2x in 2015. Debt dropped on 37.8% in 2015 while cash surged on 44.3% in 2015.
Appendix 1: Peers in Apparel
Below you can find High Fashion International Ltd 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% |
| Koradior Holdings Ltd ($3709) | | 48.3% | 44.7% | 47.7% | 23.9% |
| Kingmaker Footwear Holdings Ltd ($1170) | | 10.0% | 9.3% | 6.3% | 23.7% |
| Cosmo Lady China Holdings Co Ltd ($2298) | | 36.3% | 29.2% | 37.4% | 23.6% |
| |
|---|
| Median (47 companies) | 27.5% | 6.8% | 5.4% | 5.5% | -0.9% |
|---|
| High Fashion International Ltd ($608) | | -6.2% | 7.5% | 2.1% | -6.5% |
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% |
| Koradior Holdings Ltd ($3709) | 63.5% | 62.8% | 69.3% | 73.3% | 73.7% |
| 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% |
| |
|---|
| Median (46 companies) | 24.8% | 25.0% | 24.3% | 26.0% | 25.6% |
|---|
| High Fashion International Ltd ($608) | 24.4% | 24.8% | 22.7% | 24.9% | 21.5% |
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 (47 companies) | 11.4% | 11.1% | 10.9% | 7.5% | 7.6% |
|---|
| High Fashion International Ltd ($608) | 5.0% | 2.5% | 2.0% | 5.1% | 3.9% |
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 (46 companies) | 1.9% | 2.3% | 3.0% | 2.5% | 2.4% |
|---|
| High Fashion International Ltd ($608) | 5.4% | 2.2% | 6.6% | 2.0% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Koradior Holdings Ltd ($3709) | | 45.2% | 69.5% | 36.5% | 31.0% |
| Cosmo Lady China Holdings Co Ltd ($2298) | | 41.7% | 56.0% | 38.6% | 27.8% |
| 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% |
| |
|---|
| Median (47 companies) | 12.7% | 12.4% | 7.3% | 5.3% | 6.0% |
|---|
| High Fashion International Ltd ($608) | 1.2% | -0.4% | -0.6% | 1.3% | 0.7% |
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 (36 companies) | -0.6x | -0.3x | -0.7x | -0.4x | -1.2x |
|---|
| High Fashion International Ltd ($608) | 4.9x | 16.7x | 27.7x | 11.2x | 5.2x |
