Texwinca Holdings Ltd reports 54.2% EBITDA growth and 5.5 pp EBITDA Margin growth from 10.2% to 15.8%
17/06/2016 • About Texwinca Holdings Ltd (
$321) • By InTwits
Texwinca Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 15.8% in FY2016 vs. 10.2% in FY2015 vs. 8.4% in FY2012
- Texwinca Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 8.6%.
- CAPEX is quite volatile: 3,221 in FY2016, 1,499 in FY2015, 798 in FY2014, 2,105 in FY2013, 52.4 in FY2012
- The company has highly profitable business model: ROIC is at 14.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Texwinca Holdings Ltd ($321) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 13,766 | 11,251 | 9,860 | 9,322 | 9,343 | 0.2% |
| Gross Profit | 4,074 | 3,473 | 3,281 | 3,178 | 3,173 | -0.2% |
| SG&A | 3,300 | 3,239 | 2,938 | 2,602 | 2,673 | 2.7% |
| EBITDA | 1,153 | 898 | 845 | 955 | 1,472 | 54.2% |
| Net Income | 938 | 734 | 668 | 773 | 1,051 | 35.9% |
Balance Sheet
|
|---|
| Cash | 1,295 | 1,313 | 1,289 | 1,476 | 3,005 | 103.6% |
| Short Term Debt | 3,193 | 3,283 | 1,502 | 1,748 | 530 | -69.7% |
| Long Term Debt | 413 | 225 | 367 | 158 | 313 | 97.9% |
Cash flow
|
|---|
| Capex | 249 | 164 | 164 | 128 | 207 | 61.6% |
Ratios
|
|---|
| Revenue growth | 16.1% | -18.3% | -12.4% | -5.4% | 0.2% | |
| EBITDA growth | -27.1% | -22.1% | -5.9% | 13.0% | 54.2% | |
| Gross Margin | 29.6% | 30.9% | 33.3% | 34.1% | 34.0% | -0.1% |
| EBITDA Margin | 8.4% | 8.0% | 8.6% | 10.2% | 15.8% | 5.5% |
| Net Income Margin | 6.8% | 6.5% | 6.8% | 8.3% | 11.2% | 3.0% |
| SG&A, % of revenue | 24.0% | 28.8% | 29.8% | 27.9% | 28.6% | 0.7% |
| CAPEX, % of revenue | 1.8% | 1.5% | 1.7% | 1.4% | 2.2% | 0.8% |
| ROIC | 8.3% | 5.3% | 5.5% | 8.1% | 14.9% | 6.9% |
| ROE | 17.4% | 12.9% | 11.3% | 12.8% | 17.2% | 4.4% |
| Net Debt/EBITDA | 2.0x | 2.4x | 0.7x | 0.5x | -1.5x | -1.9x |
Revenue and profitability
Texwinca Holdings Ltd's Revenue showed almost no change in FY2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.5 pp from 10.2% to 15.8% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.70 pp from 27.9% to 28.6% in FY2016.
Net Income marign increased on 3.0 pp from 8.3% to 11.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Texwinca Holdings Ltd's CAPEX/Revenue was 2.2% in FY2016. Texwinca Holdings Ltd showed small growth in CAPEX/Revenue of 0.76 pp from 1.5% in FY2013 to 2.2% in FY2016. For the last three years the average CAPEX/Revenue was 1.8%.
Return on investment
The company operates at good ROIC (14.92%) and ROE (17.20%). ROIC increased on 6.9 pp from 8.1% to 14.9% in FY2016. ROE increased on 4.4 pp from 12.8% to 17.2% in FY2016.
Leverage (Debt)
Debt level is -1.5x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA dropped on 1.9x from 0.5x to -1.5x in FY2016. Debt dropped on 55.8% while cash surged on 104%.
Management team
The company's CEO Ting Kit Chung has spent 5 years at the company.
Appendix 1: Peers in Textiles
Below we provide Texwinca Holdings Ltd benchmarking against other companies in Textiles 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ping Shan Tea Group Ltd ($364) | -25.9% | 63.7% | -45.7% | 71.6% | |
| 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% | |
| |
|---|
| Median (21 companies) | 0.1% | -4.2% | -3.8% | -6.1% | |
|---|
| Texwinca Holdings Ltd ($321) | | -18.3% | -12.4% | -5.4% | 0.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Art Textile Technology International Co Ltd ($565) | 9.4% | 11.8% | 18.0% | 81.8% | |
| TAI Ping Carpet International Ltd ($146) | 41.0% | 45.4% | 46.7% | 46.6% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 4.9% | 7.3% | 24.9% | 28.8% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 31.1% | 32.5% | 32.5% | 28.3% | |
| Easyknit Enterprises Holdings Ltd ($616) | 22.3% | 26.3% | 29.6% | 25.9% | |
| |
|---|
| Median (20 companies) | 17.1% | 16.6% | 14.4% | 16.3% | |
|---|
| Texwinca Holdings Ltd ($321) | 29.6% | 30.9% | 33.3% | 34.1% | 34.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Weiqiao Textile Co ($2698) | 17.5% | 20.2% | 21.4% | 30.8% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 28.1% | 28.7% | 30.2% | 23.4% | |
| Kingdom Holding Co Ltd ($528) | 26.3% | 25.3% | 24.8% | 23.0% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 2.5% | 5.1% | 17.5% | 18.9% | |
| Pacific Textiles Holdings Ltd ($1382) | 19.1% | 19.0% | 19.5% | 18.4% | |
| |
|---|
| Median (20 companies) | 14.9% | 10.5% | 11.8% | 11.1% | |
|---|
| Texwinca Holdings Ltd ($321) | 8.4% | 8.0% | 8.6% | 10.2% | 15.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Art Textile Technology International Co Ltd ($565) | 1.0% | 1.9% | 3.9% | 105.3% | |
| Hua Lien International Holding Co Ltd ($969) | 19.7% | 40.5% | 79.6% | 58.1% | |
| Kam Hing International Holdings Ltd ($2307) | 10.6% | 10.5% | 7.6% | 8.3% | |
| TAI Ping Carpet International Ltd ($146) | 8.2% | 10.1% | 6.9% | 7.4% | |
| Wang Tai Holdings Ltd ($1400) | 34.1% | 18.8% | 7.5% | 7.3% | |
| |
|---|
| Median (20 companies) | 4.2% | 2.1% | 5.6% | 5.0% | |
|---|
| Texwinca Holdings Ltd ($321) | 1.8% | 1.5% | 1.7% | 1.4% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Textiles Holdings Ltd ($1382) | 23.7% | 26.4% | 31.6% | 25.9% | |
| Yongsheng Advanced Materials Co Ltd ($3608) | 6.2% | 13.2% | 15.4% | 19.6% | |
| Kingdom Holding Co Ltd ($528) | 13.8% | 12.7% | 13.8% | 12.7% | |
| CECEP COSTIN New Materials Group Ltd ($2228) | 22.3% | 20.1% | 17.6% | 11.0% | |
| Easyknit Enterprises Holdings Ltd ($616) | 22.2% | 21.3% | 16.1% | 7.7% | |
| |
|---|
| Median (21 companies) | 5.2% | 5.3% | 4.0% | 4.2% | |
|---|
| Texwinca Holdings Ltd ($321) | 8.3% | 5.3% | 5.5% | 8.1% | 14.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Weaving Materials Holdings Ltd ($3778) | 3.6x | 3.0x | 5.3x | 5.5x | |
| Silverman Holdings Ltd ($1616) | 1.5x | 2.5x | 2.0x | 3.2x | |
| Wang Tai Holdings Ltd ($1400) | 3.2x | 1.9x | 1.8x | 2.7x | |
| Kam Hing International Holdings Ltd ($2307) | 2.5x | 2.5x | 2.8x | 2.6x | |
| Victory City International Holdings Ltd ($539) | 1.5x | 2.0x | 3.2x | 2.5x | |
| |
|---|
| Median (14 companies) | 1.5x | 1.3x | 1.0x | 0.2x | |
|---|
| Texwinca Holdings Ltd ($321) | 2.0x | 2.4x | 0.7x | 0.5x | -1.5x |
