Modern Beauty Salon Holdings Ltd reports 81.6% Net Income decline in 2016 and 11.3% Revenue decline
29/06/2016 • About Modern Beauty Salon Holdings Ltd (
$919) • By InTwits
Modern Beauty Salon Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 8.7% in FY2016, 19.3% in FY2015, 18.7% in FY2014, 3.0% in FY2013, 22.7% in FY2012
- Modern Beauty Salon Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's in pair with industry average of 5.5%.
- CAPEX is quite volatile: 20.8 in FY2016, 31.6 in FY2015, 60.1 in FY2014, 88.6 in FY2013, 42.3 in FY2012
- The company has highly profitable business model: ROIC is at 13.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Modern Beauty Salon Holdings Ltd ($919) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 756.6 | 708.1 | 868.8 | 874.2 | 775.4 | -11.3% |
| Gross Profit | 737.3 | 679.1 | 841.2 | 845.1 | 750.6 | -11.2% |
| SG&A | | | 11.0 | 8.3 | | -100.0% |
| EBITDA | 171.4 | 21.4 | 162.5 | 168.3 | 67.3 | -60.0% |
| Net Income | 82.2 | -53.4 | 54.8 | 68.8 | 12.7 | -81.6% |
Balance Sheet
|
|---|
| Cash | 478.2 | 481.2 | 440.9 | 397.2 | 366.7 | -7.7% |
| Short Term Debt | 0.0 | 0.0 | 3.7 | | 0.0 | |
| Long Term Debt | 4.6 | 3.3 | 1.9 | 0.5 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 42.3 | 88.6 | 60.1 | 31.6 | 20.8 | -34.2% |
Ratios
|
|---|
| Revenue growth | 5.3% | -6.4% | 22.7% | 0.6% | -11.3% | |
| EBITDA growth | 3.3% | -87.5% | 659.3% | 3.5% | -60.0% | |
| Gross Margin | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% | 0.1% |
| EBITDA Margin | 22.7% | 3.0% | 18.7% | 19.3% | 8.7% | -10.6% |
| Net Income Margin | 10.9% | -7.5% | 6.3% | 7.9% | 1.6% | -6.2% |
| SG&A, % of revenue | | | 1.3% | 1.0% | | -1.0% |
| CAPEX, % of revenue | 5.6% | 12.5% | 6.9% | 3.6% | 2.7% | -0.9% |
| ROIC | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% | -58.4% |
| ROE | 29.7% | -25.6% | 37.7% | 43.5% | 7.6% | -35.9% |
| Net Debt/EBITDA | -2.8x | -22.3x | -2.7x | -2.4x | -5.4x | -3.1x |
Revenue and profitability
The company's Revenue dropped on 11.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.6 pp from 19.3% to 8.7% in FY2016.
Gross Margin showed almost no change in FY2016.
Net Income marign decreased on 6.2 pp from 7.9% to 1.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in FY2016. Modern Beauty Salon Holdings Ltd's CAPEX/Revenue decreased on 9.8 pp from 12.5% in FY2013 to 2.7% in FY2016. It's average level of CAPEX/Revenue for the last three years was 4.4%.
Return on investment
The company operates at good ROIC (13.31%) while ROE is low (7.62%). ROIC dropped on 58.4 pp from 71.8% to 13.3% in FY2016. ROE dropped on 35.9 pp from 43.5% to 7.6% in FY2016.
Leverage (Debt)
The company paid down all the debt in FY2016. Cash decreased on 7.7%.
Appendix 1: Peers in Retail
Below you can find Modern Beauty Salon 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 (117 companies) | 7.4% | 6.5% | 2.9% | -1.0% | -8.3% |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | | -6.4% | 22.7% | 0.6% | -11.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | 77.6% |
| 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% | |
| Ports Design Ltd ($589) | 81.9% | 81.2% | 80.8% | 80.4% | |
| |
|---|
| Median (103 companies) | 36.2% | 35.8% | 35.0% | 33.3% | 41.6% |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
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 (117 companies) | 10.3% | 7.8% | 8.9% | 7.1% | 5.1% |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 22.7% | 3.0% | 18.7% | 19.3% | 8.7% |
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% | 3.9% |
| 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 (117 companies) | 4.0% | 3.6% | 3.7% | 3.1% | 1.8% |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 5.6% | 12.5% | 6.9% | 3.6% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| JC Group Holdings Ltd ($8326) | | 215.6% | 92.8% | 66.3% | 81.7% |
| 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% | 19.0% |
| 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% | 36.4% |
| |
|---|
| Median (117 companies) | 12.2% | 8.9% | 8.5% | 5.8% | 4.1% |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
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 | 8.5x |
| 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 (91 companies) | -0.5x | -0.5x | -0.2x | -0.5x | -0.8x |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | -2.8x | -22.3x | -2.7x | -2.4x | -5.4x |
