UKF Holdings Ltd reports 987% CAPEX growth in 2016 while 27.1% Revenue decline
28/06/2016 • About UKF Holdings Ltd (
$1468) • By InTwits
UKF Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- UKF Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -12.6%
- EBITDA Margin is quite volatile: -21.1% in FY2016, 17.0% in FY2015, 9.9% in FY2014, 9.7% in FY2013, 10.4% in FY2012
- UKF Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.1%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 104 in FY2016, 9.6 in FY2015, 28.0 in FY2014, 16.6 in FY2013, 0 in FY2012
- The company has unprofitable business model: ROIC is at -12.6%
- It operates with high leverage: Net Debt/EBITDA is 5.0x 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.
UKF Holdings Ltd ($1468) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 214.6 | 297.5 | 301.6 | 301.6 | 219.7 | -27.1% |
| Gross Profit | 34.8 | 47.7 | 59.6 | 83.6 | -16.9 | -120.3% |
| SG&A | | | 34.8 | 55.5 | 63.8 | 15.0% |
| EBITDA | 22.2 | 29.0 | 29.8 | 51.4 | -46.3 | -190.0% |
| Net Income | 16.6 | 27.1 | 35.8 | 36.6 | -94.4 | -357.8% |
Balance Sheet
|
|---|
| Cash | 9.2 | 134.5 | 60.8 | 136.7 | 66.1 | -51.6% |
| Short Term Debt | 36.1 | 31.7 | 103.6 | 145.5 | 131.3 | -9.8% |
| Long Term Debt | 0.0 | 10.0 | 28.8 | 10.0 | 10.7 | 6.8% |
Cash flow
|
|---|
| Capex | 0.0 | 16.6 | 28.0 | 9.6 | 104.3 | 987.0% |
Ratios
|
|---|
| Revenue growth | 95.5% | 38.7% | 1.4% | -0.0% | -27.1% | |
| EBITDA growth | 17.4% | 30.4% | 2.7% | 72.6% | -190.0% | |
| Gross Margin | 16.2% | 16.0% | 19.8% | 27.7% | -7.7% | -35.4% |
| EBITDA Margin | 10.4% | 9.7% | 9.9% | 17.0% | -21.1% | -38.1% |
| Net Income Margin | 7.7% | 9.1% | 11.9% | 12.1% | -43.0% | -55.1% |
| SG&A, % of revenue | | | 11.5% | 18.4% | 29.1% | 10.6% |
| CAPEX, % of revenue | 0.0% | 5.6% | 9.3% | 3.2% | 47.5% | 44.3% |
| ROIC | 42.2% | 19.9% | 8.5% | 10.8% | -12.6% | -23.5% |
| ROE | 81.2% | 27.2% | 16.2% | 12.8% | -32.2% | -45.0% |
| Net Debt/EBITDA | 1.2x | -3.2x | 2.4x | 0.4x | | -0.4x |
Revenue and profitability
The company's Revenue dropped on 27.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 38.1 pp from 17.0% to -21.1% in FY2016.
Gross Margin dropped on 35.4 pp from 27.7% to -7.7% in FY2016. SG&A as a % of Revenue jumped on 10.6 pp from 18.4% to 29.1% in FY2016.
Net Income marign dropped on 55.1 pp from 12.1% to -43.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 47.5% in FY2016. UKF Holdings Ltd's CAPEX/Revenue surged on 41.9 pp from 5.6% in FY2013 to 47.5% in FY2016. For the last three years the average CAPEX/Revenue was 20.0%.
Return on investment
The company operates at negative ROIC (-12.63%) and ROE (-32.18%). ROIC dropped on 23.5 pp from 10.8% to -12.6% in FY2016. ROE dropped on 45.0 pp from 12.8% to -32.2% in FY2016.
Leverage (Debt)
Debt level is 5.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 0.4x to in FY2016. Debt decreased on 8.7% while cash dropped on 51.6%.
Appendix 1: Peers in Apparel
Below you can find UKF Holdings 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 (51 companies) | 5.3% | 5.4% | 5.5% | -2.1% | -0.1% |
|---|
| UKF Holdings Ltd ($1468) | | 38.7% | 1.4% | -0.0% | -27.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 38.5% | 42.3% | 59.6% | 75.6% | |
| Koradior Holdings Ltd ($3709) | 62.8% | 69.3% | 73.3% | 73.7% | |
| Prada SpA ($1913) | 71.5% | 72.1% | 73.8% | 71.8% | 72.4% |
| China Outfitters Holdings Ltd ($1146) | 74.9% | 74.3% | 70.0% | 65.7% | |
| Crocodile Garments ($122) | 64.7% | 60.7% | 60.4% | 62.1% | |
| |
|---|
| Median (50 companies) | 25.0% | 24.3% | 26.0% | 24.2% | 21.6% |
|---|
| UKF Holdings Ltd ($1468) | 16.2% | 16.0% | 19.8% | 27.7% | -7.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Lilang Ltd ($1234) | 26.3% | 26.9% | 29.4% | 30.6% | |
| Cabbeen Fashion Ltd ($2030) | 25.0% | 29.7% | 28.4% | 29.0% | |
| Fuguiniao Co Ltd ($1819) | 24.5% | 26.1% | 26.7% | 27.9% | |
| Prada SpA ($1913) | 29.6% | 31.7% | 31.7% | 26.8% | 22.4% |
| Shenzhou International Group Holdings Ltd ($2313) | 26.4% | 26.2% | 26.1% | 26.7% | |
| |
|---|
| Median (51 companies) | 11.1% | 10.9% | 7.2% | 6.4% | -2.7% |
|---|
| UKF Holdings Ltd ($1468) | 10.4% | 9.7% | 9.9% | 17.0% | -21.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | 136.9% | 70.3% | 13.5% | 28.5% | |
| Shenzhou International Group Holdings Ltd ($2313) | 7.3% | 7.9% | 10.2% | 16.1% | |
| Crocodile Garments ($122) | 20.1% | 22.1% | 1.8% | 13.5% | |
| Texhong Textile Group Ltd ($2678) | 8.9% | 11.8% | 5.8% | 10.5% | |
| Prada SpA ($1913) | 9.7% | 10.6% | 15.3% | 10.2% | 11.1% |
| |
|---|
| Median (50 companies) | 2.3% | 3.0% | 2.3% | 2.1% | 1.8% |
|---|
| UKF Holdings Ltd ($1468) | 0.0% | 5.6% | 9.3% | 3.2% | 47.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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) | 32.3% | 32.9% | 26.5% | 27.0% | |
| Sitoy Group Holdings Ltd ($1023) | 39.3% | 28.7% | 31.8% | 22.0% | |
| Prada SpA ($1913) | 32.1% | 37.4% | 34.0% | 21.9% | 14.0% |
| |
|---|
| Median (51 companies) | 10.5% | 7.2% | 4.4% | 4.5% | -4.6% |
|---|
| UKF Holdings Ltd ($1468) | 42.2% | 19.9% | 8.5% | 10.8% | -12.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| S Culture International Holdings Ltd ($1255) | 1.4x | 0.7x | 2.4x | 158.1x | |
| High Fashion International Ltd ($608) | 16.7x | 27.7x | 11.2x | 5.2x | |
| Global Brands Group Holding Ltd ($787) | -0.4x | -0.3x | 1.3x | 2.1x | |
| Fuguiniao Co Ltd ($1819) | -0.0x | -0.7x | 0.3x | 1.9x | |
| Texhong Textile Group Ltd ($2678) | 1.4x | 1.3x | 2.3x | 1.4x | |
| |
|---|
| Median (37 companies) | -0.3x | -0.6x | -0.4x | -1.2x | -0.1x |
|---|
| UKF Holdings Ltd ($1468) | 1.2x | -3.2x | 2.4x | 0.4x | |
