Citychamp Watch & Jewellery Group Ltd CAPEX jumped on 139% in 2015 and Revenue showed almost no change
31/03/2016 • About Citychamp Watch & Jewellery Group Ltd (
$256) • By InTwits
Citychamp Watch & Jewellery Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 16.6% in 2015, 8.0% in 2014, 11.0% in 2013, 18.6% in 2012, 19.9% in 2011
- Citychamp Watch & Jewellery Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.0%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 301 in 2015, 126 in 2014, 178 in 2013, 146 in 2012, 80.3 in 2011
- The company has business model with low profitability: ROIC is at 7.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.4x 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.
Citychamp Watch & Jewellery Group Ltd ($256) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,465 | 2,240 | 3,176 | 3,489 | 3,476 | -0.3% |
| Gross Profit | 828 | 1,218 | 1,479 | 1,691 | 1,782 | 5.4% |
| SG&A | | 865 | 1,267 | 1,624 | 1,499 | -7.7% |
| EBITDA | 292 | 416 | 350 | 279 | 576 | 106.7% |
| Net Income | 256 | 270 | 565 | 132 | 308 | 133.1% |
Balance Sheet
|
|---|
| Cash | 351 | 229 | 472 | 878 | 836 | -4.8% |
| Short Term Debt | 86 | 479 | 231 | 349 | 767 | 119.5% |
| Long Term Debt | 0 | 0 | 367 | 1,240 | 881 | -29.0% |
Cash flow
|
|---|
| Capex | 80 | 146 | 178 | 126 | 301 | 139.3% |
Ratios
|
|---|
| Revenue growth | 83.0% | 52.9% | 41.8% | 9.8% | -0.3% | |
| EBITDA growth | 74.9% | 42.6% | -15.7% | -20.5% | 106.7% | |
| Gross Margin | 56.5% | 54.4% | 46.6% | 48.5% | 51.3% | 2.8% |
| EBITDA Margin | 19.9% | 18.6% | 11.0% | 8.0% | 16.6% | 8.6% |
| Net Income Margin | 17.5% | 12.1% | 17.8% | 3.8% | 8.9% | 5.1% |
| SG&A, % of revenue | | 38.6% | 39.9% | 46.6% | 43.1% | -3.4% |
| CAPEX, % of revenue | 5.5% | 6.5% | 5.6% | 3.6% | 8.6% | 5.0% |
| ROIC | 7.9% | 9.4% | 5.5% | 2.9% | 7.7% | 4.9% |
| ROE | 8.1% | 7.9% | 14.0% | 3.2% | 7.8% | 4.6% |
| Net Debt/EBITDA | -0.9x | 0.6x | 0.4x | 2.6x | 1.4x | -1.1x |
Revenue and profitability
Citychamp Watch & Jewellery Group Ltd's Revenue showed almost no change in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.6 pp from 8.0% to 16.6% in 2015.
Gross Margin increased on 2.8 pp from 48.5% to 51.3% in 2015. SG&A as a % of Revenue decreased on 3.4 pp from 46.6% to 43.1% in 2015.
Net Income marign increased on 5.1 pp from 3.8% to 8.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.6% in 2015. CAPEX/Revenue increased on 2.1 pp from 6.5% in 2012 to 8.6% in 2015. It's average CAPEX/Revenue for the last three years was 6.0%.Battling declining revenue the company invested a large share of EBITDA (52.2%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (7.75%) and ROE (7.80%). ROIC increased on 4.9 pp from 2.9% to 7.7% in 2015. ROE increased on 4.6 pp from 3.2% to 7.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is 2.9x. Net Debt / EBITDA dropped on 1.1x from 2.6x to 1.4x in 2015. Debt increased on 3.6% in 2015 while cash decreased on 4.8% in 2015.
Appendix 1: Peers in Apparel
Below you can find Citychamp Watch & Jewellery Group 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 (48 companies) | 23.8% | 5.6% | 5.4% | 5.4% | -0.9% |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | | 52.9% | 41.8% | 9.8% | -0.3% |
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 (47 companies) | 24.4% | 24.8% | 23.5% | 24.9% | 25.0% |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | 56.5% | 54.4% | 46.6% | 48.5% | 51.3% |
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 (48 companies) | 10.7% | 10.5% | 10.2% | 7.2% | 7.2% |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | 19.9% | 18.6% | 11.0% | 8.0% | 16.6% |
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 (47 companies) | 1.9% | 2.2% | 3.0% | 2.3% | 2.3% |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | 5.5% | 6.5% | 5.6% | 3.6% | 8.6% |
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 (48 companies) | 12.7% | 12.4% | 7.3% | 5.3% | 5.7% |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | 7.9% | 9.4% | 5.5% | 2.9% | 7.7% |
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 |
| High Fashion International Ltd ($608) | 4.9x | 16.7x | 27.7x | 11.2x | 5.2x |
| 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 |
| |
|---|
| Median (37 companies) | -0.5x | -0.3x | -0.7x | -0.4x | -1.2x |
|---|
| Citychamp Watch & Jewellery Group Ltd ($256) | -0.9x | 0.6x | 0.4x | 2.6x | 1.4x |
