Yangtzekiang Garment Ltd EBITDA surged on 21.6% and EBITDA Margin increased slightly on 1.0 pp from 2.2% to 3.3%
29/06/2016 • About Yangtzekiang Garment Ltd (
$294) • By InTwits
Yangtzekiang Garment Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Yangtzekiang Garment Ltd is a company in decline: FY2016 revenue growth was -17.2%, 5 years revenue CAGR was -7.9%
- EBITDA Margin is quite volatile: 3.3% in FY2016, 2.2% in FY2015, 0.4% in FY2014, 4.7% in FY2013, 5.3% in FY2012
- Yangtzekiang Garment Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Yangtzekiang Garment Ltd ($294) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,751 | 1,333 | 1,074 | 1,134 | 938 | -17.2% |
| Gross Profit | 269 | 222 | 157 | 165 | 164 | -0.6% |
| SG&A | 179 | 154 | 148 | 140 | 130 | -6.7% |
| EBITDA | 92 | 63 | 4 | 25 | 31 | 21.6% |
| Net Income | 103 | 53 | 12 | -23 | 4 | |
Balance Sheet
|
|---|
| Cash | 149 | 270 | 275 | 272 | 312 | 14.4% |
| Short Term Debt | 14 | 0 | 2 | 1 | 2 | 69.5% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 26 | 12 | 3 | 11 | 6 | -47.1% |
Ratios
|
|---|
| Revenue growth | 23.6% | -23.9% | -19.4% | 5.6% | -17.2% | |
| EBITDA growth | 99.9% | -31.5% | -93.2% | 486.2% | 21.6% | |
| Gross Margin | 15.4% | 16.7% | 14.6% | 14.6% | 17.5% | 2.9% |
| EBITDA Margin | 5.3% | 4.7% | 0.4% | 2.2% | 3.3% | 1.0% |
| Net Income Margin | 5.9% | 4.0% | 1.1% | -2.0% | 0.5% | 2.5% |
| SG&A, % of revenue | 10.2% | 11.6% | 13.8% | 12.3% | 13.9% | 1.6% |
| CAPEX, % of revenue | 1.5% | 0.9% | 0.3% | 1.0% | 0.6% | -0.4% |
| ROIC | 6.2% | 3.6% | -0.8% | 0.9% | 1.6% | 0.7% |
| ROE | 8.9% | 4.3% | 0.9% | -1.8% | 0.4% | 2.2% |
| Net Debt/EBITDA | -1.5x | -4.3x | -63.3x | -10.7x | -10.1x | 0.7x |
Revenue and profitability
Yangtzekiang Garment Ltd's Revenue dropped on 17.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.0 pp from 2.2% to 3.3% in FY2016.
Gross Margin increased on 2.9 pp from 14.6% to 17.5% in FY2016. SG&A as a % of Revenue increased slightly on 1.6 pp from 12.3% to 13.9% in FY2016.
Net Income marign increased on 2.5 pp from -2.0% to 0.47% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.63% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.63%.
Return on investment
The company operates at low ROIC (1.62%) and ROE (0.36%). ROIC increased slightly on 0.72 pp from 0.91% to 1.6% in FY2016. ROE increased on 2.2 pp from -1.8% to 0.36% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -10.1x and Debt / EBITDA is 0.1x. Net Debt / EBITDA jumped on 0.7x from -10.7x to -10.1x in FY2016. Debt surged on 69.5% while cash jumped on 14.4%.
Appendix 1: Peers in Apparel
Below we provide Yangtzekiang Garment Ltd benchmarking against other companies in Apparel 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 |
|---|
| Symphony Holdings Ltd/Hong Kong ($1223) | -94.0% | 46.8% | 20.4% | 33.1% | |
| Highlight China IoT International Ltd ($1682) | | 17.7% | -73.7% | 29.6% | -55.0% |
| 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) | 5.6% | 6.3% | 5.5% | -2.1% | -17.1% |
|---|
| Yangtzekiang Garment Ltd ($294) | | -23.9% | -19.4% | 5.6% | -17.2% |
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% | 25.0% | 13.9% |
|---|
| Yangtzekiang Garment Ltd ($294) | 15.4% | 16.7% | 14.6% | 14.6% | 17.5% |
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% | 7.5% | 6.8% | -7.4% |
|---|
| Yangtzekiang Garment Ltd ($294) | 5.3% | 4.7% | 0.4% | 2.2% | 3.3% |
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% | 2.5% | 2.4% | 2.1% |
|---|
| Yangtzekiang Garment Ltd ($294) | 1.5% | 0.9% | 0.3% | 1.0% | 0.6% |
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) | 12.4% | 7.3% | 5.3% | 5.4% | -11.0% |
|---|
| Yangtzekiang Garment Ltd ($294) | 6.2% | 3.6% | -0.8% | 0.9% | 1.6% |
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) | -0.2x | -0.6x | -0.2x | -0.8x | -0.1x |
|---|
| Yangtzekiang Garment Ltd ($294) | -1.5x | -4.3x | -63.3x | -10.7x | -10.1x |
