YGM Trading Ltd reports 208% Net Income decline in 2016 and 12.4 pp EBITDA Margin decline from 7.1% to -5.2%
29/06/2016 • About YGM Trading Ltd (
$375) • By InTwits
YGM Trading Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- YGM Trading Ltd is a company in decline: FY2016 revenue growth was -18.7%, 5 years revenue CAGR was -5.0%
- EBITDA Margin is declining: -5.2% in FY2016 vs. 7.1% in FY2015 vs. 22.7% in FY2012
- EBITDA Margin is quite volatile: -5.2% in FY2016, 7.1% in FY2015, 16.5% in FY2014, 19.7% in FY2013, 22.7% in FY2012
- YGM Trading Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's in pair with industry average of 6.1%.
- CAPEX is quite volatile: 35.6 in FY2016, 160 in FY2015, 43.5 in FY2014, 28.3 in FY2013, 24.4 in FY2012
- The company has unprofitable business model: ROIC is at -6.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
YGM Trading Ltd ($375) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,378 | 1,364 | 1,246 | 1,100 | 894 | -18.7% |
| Gross Profit | 916 | 920 | 798 | 687 | 525 | -23.7% |
| SG&A | | 686 | 630 | 650 | 636 | -2.1% |
| EBITDA | 313 | 268 | 206 | 79 | -47 | -159.8% |
| Net Income | 633 | 222 | 219 | 81 | -88 | -208.4% |
Balance Sheet
|
|---|
| Cash | 1,085 | 656 | 621 | 189 | 102 | -45.8% |
| Short Term Debt | 9 | 6 | 19 | 13 | 27 | 101.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 24 | 28 | 43 | 160 | 36 | -77.8% |
Ratios
|
|---|
| Revenue growth | 19.3% | -1.0% | -8.6% | -11.7% | -18.7% | |
| EBITDA growth | 15.2% | -14.3% | -23.2% | -61.9% | -159.8% | |
| Gross Margin | 66.5% | 67.4% | 64.0% | 62.5% | 58.7% | -3.8% |
| EBITDA Margin | 22.7% | 19.7% | 16.5% | 7.1% | -5.2% | -12.4% |
| Net Income Margin | 45.9% | 16.3% | 17.5% | 7.4% | -9.8% | -17.2% |
| SG&A, % of revenue | | 50.3% | 50.6% | 59.1% | 71.2% | 12.0% |
| CAPEX, % of revenue | 1.8% | 2.1% | 3.5% | 14.5% | 4.0% | -10.6% |
| ROIC | 16.6% | 13.1% | 11.3% | 2.8% | -6.2% | -9.0% |
| ROE | 38.1% | 12.4% | 14.4% | 5.5% | -6.5% | -12.0% |
| Net Debt/EBITDA | -3.4x | -2.4x | -2.9x | -2.2x | | 2.2x |
Revenue and profitability
The company's Revenue dropped on 18.7%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 12.4 pp from 7.1% to -5.2% in FY2016.
Gross Margin decreased on 3.8 pp from 62.5% to 58.7% in FY2016. SG&A as a % of Revenue surged on 12.0 pp from 59.1% to 71.2% in FY2016.
Net Income marign dropped on 17.2 pp from 7.4% to -9.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 4.0%. YGM Trading Ltd showed small growth in CAPEX/Revenue of 1.9 pp from 2.1% in FY2013 to 4.0% in FY2016. Average CAPEX/Revenue for the last three years was 7.3%.
Return on investment
The company operates at negative ROIC (-6.18%) and ROE (-6.54%). ROIC decreased on 9.0 pp from 2.8% to -6.2% in FY2016. ROE dropped on 12.0 pp from 5.5% to -6.5% in FY2016.
Leverage (Debt)
Debt level is -0.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA jumped on 2.2x from -2.2x to in FY2016. Debt jumped on 101% while cash dropped on 45.8%.
Appendix 1: Peers in Distribution/Wholesale
Below you can find YGM Trading Ltd benchmarking vs. other companies in Distribution/Wholesale 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 |
|---|
| C Y Foundation Group Ltd ($1182) | | -65.6% | 5.9% | 214.6% | -14.6% |
| China Fortune Holdings Ltd ($110) | -64.7% | -68.2% | -71.0% | 174.2% | |
| Hailiang International Holdings Ltd ($2336) | 9.7% | -30.8% | -69.1% | 99.7% | |
| Forefront Group Ltd ($885) | | 504.6% | 3,871.0% | 72.0% | |
| Yestar International Holdings Co Ltd ($2393) | -2.2% | 22.8% | 30.5% | 60.3% | |
| |
|---|
| Median (35 companies) | 2.5% | 2.1% | 1.4% | -0.5% | -14.6% |
|---|
| YGM Trading Ltd ($375) | | -1.0% | -8.6% | -11.7% | -18.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Yunnan Tin Minerals Group Co Ltd ($263) | 79.6% | 66.3% | | 98.7% | |
| Goldin Financial Holdings Ltd ($530) | 75.3% | 71.7% | 74.8% | 73.8% | |
| Goldlion Holdings Ltd ($533) | 56.4% | 54.1% | 55.7% | 60.0% | |
| E.Bon Holdings Ltd ($599) | 40.3% | 37.4% | 35.8% | 39.6% | 42.4% |
| Forefront Group Ltd ($885) | | | 69.8% | 39.1% | |
| |
|---|
| Median (33 companies) | 17.3% | 17.1% | 18.0% | 20.8% | 23.4% |
|---|
| YGM Trading Ltd ($375) | 66.5% | 67.4% | 64.0% | 62.5% | 58.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China LNG Group Ltd ($931) | 95.1% | 76.4% | 97.9% | 1,277.8% | |
| Goldin Financial Holdings Ltd ($530) | 163.7% | 613.4% | 285.7% | 364.1% | |
| China Infrastructure Investment Ltd ($600) | -274.9% | 120.0% | 52.0% | 134.5% | |
| China Yunnan Tin Minerals Group Co Ltd ($263) | -1,064.4% | -252.1% | | 62.8% | |
| Goldlion Holdings Ltd ($533) | 25.8% | 23.4% | 22.5% | 22.8% | |
| |
|---|
| Median (36 companies) | 2.1% | 1.9% | 4.5% | 4.3% | -5.0% |
|---|
| YGM Trading Ltd ($375) | 22.7% | 19.7% | 16.5% | 7.1% | -5.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SIS International Holdings ($529) | 13.4% | 31.8% | 14.8% | 49.8% | |
| Inspur International Ltd ($596) | 8.4% | 12.2% | 33.6% | 25.6% | |
| China LNG Group Ltd ($931) | 11.1% | 0.3% | 0.6% | 15.6% | |
| Victory Group Ltd ($1139) | 0.7% | 0.1% | 6.1% | 12.6% | |
| C Y Foundation Group Ltd ($1182) | 2.5% | 5.2% | 82.2% | 9.3% | 70.8% |
| |
|---|
| Median (35 companies) | 1.3% | 1.7% | 1.6% | 1.2% | 2.2% |
|---|
| YGM Trading Ltd ($375) | 1.8% | 2.1% | 3.5% | 14.5% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China LNG Group Ltd ($931) | 8.4% | 7.4% | 87.0% | 56.2% | |
| Powerwell Pacific Holdings Ltd ($8265) | 6.4% | 6.4% | 23.6% | 27.1% | |
| Yestar International Holdings Co Ltd ($2393) | 28.8% | 24.1% | 26.2% | 25.4% | |
| E.Bon Holdings Ltd ($599) | 7.0% | 7.2% | 3.3% | 16.9% | 17.4% |
| Goldin Financial Holdings Ltd ($530) | 5.9% | 20.6% | 10.4% | 16.0% | |
| |
|---|
| Median (37 companies) | 2.1% | 0.9% | 3.1% | 2.6% | -8.8% |
|---|
| YGM Trading Ltd ($375) | 16.6% | 13.1% | 11.3% | 2.8% | -6.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SIS International Holdings ($529) | -1.8x | 7.0x | 7.2x | 16.8x | |
| Leeport Holdings Ltd ($387) | | | | 16.1x | |
| Takson Holdings Ltd ($918) | | 11.5x | 11.7x | 15.7x | |
| Sheng Yuan Holdings Ltd ($851) | | | 19.3x | 15.4x | |
| Forefront Group Ltd ($885) | | | -0.0x | 15.3x | |
| |
|---|
| Median (26 companies) | -0.1x | -0.5x | 0.3x | 0.0x | -2.7x |
|---|
| YGM Trading Ltd ($375) | -3.4x | -2.4x | -2.9x | -2.2x | |
