China Household Holdings Ltd revenue dropped on 30.7% in 2015 while EBITDA Margin increased on 2.8 pp from 18.3% to 21.1%
31/03/2016 • About China Household Holdings Ltd (
$692) • By InTwits
China Household Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Household Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 5.3%.
- CAPEX is quite volatile: 0.19 in 2015, 0.76 in 2014, 6.9 in 2013, 1.7 in 2012, 2.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.9%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Household Holdings Ltd ($692) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 26 | 17 | 943 | 1,662 | 1,152 | -30.7% |
| Gross Profit | 4 | 10 | 333 | 507 | 330 | -34.9% |
| SG&A | 36 | 57 | 105 | 253 | 341 | 34.9% |
| EBITDA | -30 | -38 | 298 | 304 | 243 | -20.0% |
| Net Income | -199 | -16 | 159 | -865 | -1,087 | 25.7% |
Balance Sheet
|
|---|
| Cash | 36 | 11 | 38 | 244 | 409 | 67.8% |
| Short Term Debt | 0 | 0 | 48 | 395 | 470 | 18.9% |
| Long Term Debt | 312 | 325 | 811 | 720 | 581 | -19.4% |
Cash flow
|
|---|
| Capex | 2 | 2 | 7 | 1 | 0 | -74.8% |
Ratios
|
|---|
| Revenue growth | -87.0% | -32.8% | 5,357.9% | 76.2% | -30.7% | |
| EBITDA growth | 51.1% | 26.9% | -882.9% | 2.0% | -20.0% | |
| Gross Margin | 16.3% | 57.3% | 35.3% | 30.5% | 28.6% | -1.9% |
| EBITDA Margin | -116.6% | -220.0% | 31.6% | 18.3% | 21.1% | 2.8% |
| Net Income Margin | -773.0% | -95.1% | 16.9% | -52.0% | -94.3% | -42.3% |
| SG&A, % of revenue | 141.7% | 331.5% | 11.1% | 15.2% | 29.6% | 14.4% |
| CAPEX, % of revenue | 9.5% | 9.9% | 0.7% | 0.0% | 0.0% | -0.0% |
| ROIC | -1.7% | -2.3% | 11.3% | 9.2% | 5.9% | -3.2% |
| ROE | -14.7% | -1.1% | 8.2% | -45.6% | -86.4% | -40.8% |
| Net Debt/EBITDA | | | 2.8x | 2.9x | 2.6x | -0.2x |
Revenue and profitability
China Household Holdings Ltd's Revenue dropped on 30.7% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 18.3% to 21.1% in 2015.
Gross Margin decreased slightly on 1.9 pp from 30.5% to 28.6% in 2015. SG&A as a % of Revenue jumped on 14.4 pp from 15.2% to 29.6% in 2015.
Net Income marign dropped on 42.3 pp from -52.0% to -94.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.017%. The company showed decline in CAPEX/Revenue of 9.9 pp from 9.9% in 2012 to 0.017% in 2015. Average CAPEX/Revenue for the last three years was 0.27%.
Return on investment
The company operates at low but positive ROIC (5.92%) and negative ROE (-86.43%). ROIC decreased on 3.2 pp from 9.2% to 5.9% in 2015. ROE dropped on 40.8 pp from -45.6% to -86.4% in 2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 4.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 2.9x to 2.6x in 2015. Debt decreased on 5.8% in 2015 while cash jumped on 67.8% in 2015.
Appendix 1: Peers in Retail
Below we provide China Household 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 Nuclear Industry 23 International Corp Ltd ($611) | | 1.4% | 85.6% | -42.1% | 419.8% |
| Noble House China Holdings Ltd ($8246) | | -5.0% | -20.2% | -24.8% | 117.2% |
| Vongroup Ltd ($318) | | -46.9% | 23.7% | -80.2% | 90.3% |
| Nanjing Sinolife United Co Ltd ($3332) | | 45.6% | 29.5% | 29.6% | 57.3% |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | | 54.9% | 72.8% | 23.0% | 48.3% |
| |
|---|
| Median (115 companies) | 421.0% | 11.6% | 6.5% | 3.3% | -0.9% |
|---|
| China Household Holdings Ltd ($692) | | -32.8% | 5,357.9% | 76.2% | -30.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Moiselle International Holdings Ltd ($130) | 81.4% | 81.2% | 83.8% | 80.6% | 83.2% |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | 81.6% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | 80.6% |
| |
|---|
| Median (102 companies) | 39.4% | 36.2% | 36.4% | 35.5% | 34.8% |
|---|
| China Household Holdings Ltd ($692) | 16.3% | 57.3% | 35.3% | 30.5% | 28.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Energy Development Holdings Ltd ($228) | -44.2% | -58.1% | -72.3% | -84.0% | 1,070.6% |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | 55.4% |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | 44.8% |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | 43.4% |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | 41.4% |
| |
|---|
| Median (115 companies) | 13.4% | 10.7% | 7.3% | 8.8% | 7.1% |
|---|
| China Household Holdings Ltd ($692) | -116.6% | -220.0% | 31.6% | 18.3% | 21.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 4.6% | 11.6% | 19.4% | 15.7% | 47.2% |
| Springland International Holdings Ltd ($1700) | 20.7% | 31.9% | 17.4% | 26.5% | 36.9% |
| Merry Garden Holdings Ltd ($1237) | 22.7% | 18.6% | 28.6% | 15.1% | 34.2% |
| China Energy Development Holdings Ltd ($228) | 1.4% | 1.6% | 0.2% | 0.0% | 27.4% |
| Golden Eagle Retail Group Ltd ($3308) | 30.6% | 28.5% | 9.4% | 26.7% | 25.4% |
| |
|---|
| Median (115 companies) | 3.9% | 4.1% | 3.6% | 3.8% | 3.5% |
|---|
| China Household Holdings Ltd ($692) | 9.5% | 9.9% | 0.7% | 0.0% | 0.0% |
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% |
| Noble House China Holdings Ltd ($8246) | 60.3% | 17.7% | -67.7% | -113.8% | 35.6% |
| Fairwood Holdings Ltd ($52) | 27.4% | 28.0% | 29.1% | 28.6% | 32.1% |
| |
|---|
| Median (115 companies) | 17.2% | 12.4% | 8.5% | 8.4% | 5.8% |
|---|
| China Household Holdings Ltd ($692) | -1.7% | -2.3% | 11.3% | 9.2% | 5.9% |
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 |
| Trinity Ltd ($891) | -0.6x | -0.2x | 0.2x | 0.6x | 18.2x |
| Parkson Retail Group Ltd ($3368) | 0.4x | 0.8x | 2.3x | 3.6x | 9.8x |
| Maoye International Holdings Ltd ($848) | 1.7x | 2.9x | 3.3x | 3.4x | 9.0x |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | 7.3x |
| |
|---|
| Median (90 companies) | -0.8x | -0.5x | -0.8x | -0.2x | -0.5x |
|---|
| China Household Holdings Ltd ($692) | | | 2.8x | 2.9x | 2.6x |
