Vongroup Ltd reports 225% Net Income growth in 2016 while 180 pp EBITDA Margin decline from -21.8% to -202%
27/07/2016 • About Vongroup Ltd (
$318) • By InTwits
Vongroup Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Vongroup Ltd is a company in decline: FY2016 revenue growth was -7.2%, 5 years revenue CAGR was -25.5%
- The company operates at negative EBITDA Margin: -201.6%
- Vongroup Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -148.5%0
- Vongroup Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.1%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: 0.0060 in FY2016, 0.057 in FY2015, 0.072 in FY2014, 8.3 in FY2013, 31.7 in FY2012
- The company has unprofitable business model: ROIC is at -7.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Vongroup Ltd ($318) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 27.650 | 34.216 | 6.774 | 12.889 | 11.967 | -7.2% |
| Gross Profit | | | 6.445 | 12.767 | 11.850 | -7.2% |
| EBITDA | -60.387 | -24.942 | -26.595 | -2.809 | -24.127 | |
| Net Income | -41.220 | -8.601 | -34.582 | -6.663 | 8.359 | |
Balance Sheet
|
|---|
| Cash | 125.647 | 74.069 | 51.647 | 55.366 | 72.389 | 30.7% |
| Short Term Debt | 39.912 | 38.029 | 35.982 | 34.036 | 32.076 | -5.8% |
| Long Term Debt | 0.185 | 0.070 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 31.650 | 8.321 | 0.072 | 0.057 | 0.006 | -89.5% |
Ratios
|
|---|
| Revenue growth | -46.9% | 23.7% | -80.2% | 90.3% | -7.2% | |
| EBITDA growth | 201.8% | -58.7% | 6.6% | -89.4% | 758.9% | |
| Gross Margin | | | 95.1% | 99.1% | 99.0% | -0.0% |
| EBITDA Margin | -218.4% | -72.9% | -392.6% | -21.8% | -201.6% | -179.8% |
| Net Income Margin | -149.1% | -25.1% | -510.5% | -51.7% | 69.9% | 121.5% |
| CAPEX, % of revenue | 114.5% | 24.3% | 1.1% | 0.4% | 0.1% | -0.4% |
| ROIC | -16.2% | -7.4% | -8.2% | -1.2% | -7.7% | -6.6% |
| ROE | -12.5% | -2.8% | -12.2% | -2.5% | 2.9% | 5.5% |
Revenue and profitability
Vongroup Ltd's Revenue decreased on 7.2%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 180 pp from -21.8% to -202% in FY2016.
Gross Margin showed almost no change in FY2016.
Net Income marign surged on 122 pp from -51.7% to 69.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.050% in FY2016. Vongroup Ltd's CAPEX/Revenue dropped on 24.3 pp from 24.3% in FY2013 to 0.050% in FY2016. For the last three years the average CAPEX/Revenue was 0.52%.
Return on investment
The company operates at negative ROIC (-7.73%) and low but positive ROE (2.94%). ROIC decreased on 6.6 pp from -1.2% to -7.7% in FY2016. ROE increased on 5.5 pp from -2.5% to 2.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -16.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt decreased on 5.8% while cash jumped on 30.7%.
Appendix 1: Peers in Retail
Below we provide Vongroup Ltd benchmarking against other companies in Retail 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 |
|---|
| 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% | |
| 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% | |
| Unlimited Creativity Holdings Ltd ($8377) | -17.7% | -35.3% | 23.7% | 40.8% | |
| |
|---|
| Median (117 companies) | 7.5% | 6.1% | 3.1% | -1.0% | -8.6% |
|---|
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
| 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) | 36.7% | 36.3% | 35.0% | 33.3% | 42.1% |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
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) | 10.8% | 7.8% | 9.1% | 7.4% | 4.7% |
|---|
| Vongroup Ltd ($318) | -218.4% | -72.9% | -392.6% | -21.8% | -201.6% |
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% | 3.8% | 3.5% | 1.8% |
|---|
| Vongroup Ltd ($318) | 114.5% | 24.3% | 1.1% | 0.4% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
| 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% | |
| |
|---|
| Median (117 companies) | 12.3% | 8.9% | 8.7% | 5.8% | 3.1% |
|---|
| Vongroup Ltd ($318) | -16.2% | -7.4% | -8.2% | -1.2% | -7.7% |
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 (92 companies) | -0.5x | -0.6x | -0.2x | -0.5x | -1.0x |
|---|
