Wanjia Group Holdings Ltd reports 68.8% EBITDA decline in 2016 and 15.7% Revenue decline
16/06/2016 • About Wanjia Group Holdings Ltd (
$401) • By InTwits
Wanjia Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wanjia Group Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 0.8%
- EBITDA Margin is quite volatile: 0.8% in FY2016, 2.1% in FY2015, 3.9% in FY2014, 3.5% in FY2013, 4.3% in FY2012
- Wanjia Group Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 0.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wanjia Group Holdings Ltd ($401) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,712 | 1,885 | 2,096 | 1,568 | 1,322 | -15.7% |
| Gross Profit | 160 | 164 | 189 | 160 | 146 | -8.6% |
| SG&A | 95 | 108 | 118 | 137 | 149 | 8.3% |
| EBITDA | 74 | 67 | 81 | 33 | 10 | -68.8% |
| Net Income | 45 | 42 | 49 | -773 | -14 | |
Balance Sheet
|
|---|
| Cash | 48 | 31 | 44 | 43 | 204 | 372.9% |
| Short Term Debt | 82 | 55 | 124 | 140 | 32 | -76.9% |
| Long Term Debt | 0 | 0 | 0 | 0 | 77 | |
Cash flow
|
|---|
| Capex | 4 | 2 | 5 | 15 | 12 | -21.1% |
Ratios
|
|---|
| Revenue growth | 26.1% | 10.1% | 11.2% | -25.2% | -15.7% | |
| EBITDA growth | 27.7% | -10.6% | 21.7% | -59.1% | -68.8% | |
| Gross Margin | 9.4% | 8.7% | 9.0% | 10.2% | 11.1% | 0.9% |
| EBITDA Margin | 4.3% | 3.5% | 3.9% | 2.1% | 0.8% | -1.3% |
| Net Income Margin | 2.6% | 2.2% | 2.3% | -49.3% | -1.0% | 48.3% |
| SG&A, % of revenue | 5.6% | 5.7% | 5.6% | 8.8% | 11.3% | 2.5% |
| CAPEX, % of revenue | 0.3% | 0.1% | 0.3% | 1.0% | 0.9% | -0.1% |
| ROIC | 46.1% | 32.9% | 11.2% | 3.5% | 0.8% | -2.6% |
| ROE | 70.9% | 37.6% | 8.3% | -117.2% | -5.6% | 111.6% |
| Net Debt/EBITDA | 0.5x | 0.4x | 1.0x | 2.9x | -9.1x | -12.0x |
Revenue and profitability
Wanjia Group Holdings Ltd's Revenue dropped on 15.7%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 2.1% to 0.78% in FY2016.
Gross Margin increased slightly on 0.86 pp from 10.2% to 11.1% in FY2016. SG&A as a % of Revenue increased on 2.5 pp from 8.8% to 11.3% in FY2016.
Net Income marign surged on 48.3 pp from -49.3% to -1.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Wanjia Group Holdings Ltd had CAPEX/Revenue of 0.90%. The company's CAPEX/Revenue increased slightly on 0.78 pp from 0.12% in FY2013 to 0.90% in FY2016. Average CAPEX/Revenue for the last three years was 0.70%.The company has spent a lot to CAPEX (115% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (0.85%) and negative ROE (-5.56%). ROIC decreased on 2.6 pp from 3.5% to 0.85% in FY2016. ROE surged on 112 pp from -117% to -5.6% in FY2016.
Leverage (Debt)
Debt level is -9.1x Net Debt / EBITDA and 10.6x Debt / EBITDA. Net Debt / EBITDA dropped on 12.0x from 2.9x to -9.1x in FY2016. Debt dropped on 21.8% while cash jumped on 373%.
Appendix 1: Peers in Retail
Below you can find Wanjia Group Holdings Ltd benchmarking vs. other companies in Retail 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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) | 9.8% | 6.1% | 3.1% | -1.0% | 0.4% |
|---|
| Wanjia Group Holdings Ltd ($401) | | 10.1% | 11.2% | -25.2% | -15.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (102 companies) | 37.7% | 36.4% | 35.6% | 34.8% | 49.0% |
|---|
| Wanjia Group Holdings Ltd ($401) | 9.4% | 8.7% | 9.0% | 10.2% | 11.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (115 companies) | 10.8% | 7.8% | 9.1% | 7.4% | 8.0% |
|---|
| Wanjia Group Holdings Ltd ($401) | 4.3% | 3.5% | 3.9% | 2.1% | 0.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (115 companies) | 4.5% | 3.7% | 3.8% | 3.5% | 1.8% |
|---|
| Wanjia Group Holdings Ltd ($401) | 0.3% | 0.1% | 0.3% | 1.0% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | |
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | |
| Fairwood Holdings Ltd ($52) | 28.0% | 29.1% | 28.6% | 32.1% | |
| |
|---|
| Median (115 companies) | 12.2% | 8.5% | 8.4% | 5.8% | 9.2% |
|---|
| Wanjia Group Holdings Ltd ($401) | 46.1% | 32.9% | 11.2% | 3.5% | 0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | |
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| |
|---|
| Median (89 companies) | -0.5x | -0.7x | -0.2x | -0.5x | -0.6x |
|---|
| Wanjia Group Holdings Ltd ($401) | 0.5x | 0.4x | 1.0x | 2.9x | -9.1x |
