Combest Holdings Ltd reports 24.1 pp EBITDA Margin growth from -18.3% to 5.7% in 2016 in 2016 while 5.6% Revenue decline
09/09/2016 • About Combest Holdings Ltd (
$8190) • By InTwits
Combest Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Combest Holdings Ltd is a company in decline: FY2016 revenue growth was -5.6%, 5 years revenue CAGR was -23.4%
- EBITDA Margin is quite volatile: 5.7% in FY2016, -18.3% in FY2015, 26.5% in FY2014, 29.7% in FY2013, -2.7% in FY2012
- Combest Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has unprofitable business model: ROIC is at -0.3%
- It operates with high leverage: Net Debt/EBITDA is 37.8x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Combest Holdings Ltd ($8190) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 113.6 | 110.5 | 103.3 | 94.8 | 89.5 | -5.6% |
| Gross Profit | 31.1 | 58.5 | 51.8 | 18.0 | 39.7 | 120.3% |
| SG&A | | 35.0 | 33.4 | 43.6 | 40.6 | -7.0% |
| EBITDA | -3.1 | 32.8 | 27.3 | -17.4 | 5.1 | |
| Net Income | -29.3 | 19.1 | 13.0 | -109.6 | -71.8 | |
Balance Sheet
|
|---|
| Cash | 27.1 | 35.0 | 60.1 | 26.3 | 18.4 | -30.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 212.4 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.7 | 0.1 | 0.1 | 0.5 | 1.6 | 262.0% |
Ratios
|
|---|
| Revenue growth | -66.5% | -2.7% | -6.5% | -8.2% | -5.6% | |
| EBITDA growth | -103.7% | -1,174.6% | -16.8% | -163.6% | -129.5% | |
| Gross Margin | 27.4% | 52.9% | 50.2% | 19.0% | 44.4% | 25.4% |
| EBITDA Margin | -2.7% | 29.7% | 26.5% | -18.3% | 5.7% | 24.1% |
| Net Income Margin | -25.8% | 17.3% | 12.6% | -115.6% | -80.2% | 35.4% |
| SG&A, % of revenue | | 31.7% | 32.3% | 46.0% | 45.3% | -0.7% |
| CAPEX, % of revenue | 0.6% | 0.1% | 0.1% | 0.5% | 1.8% | 1.4% |
| ROIC | -4.0% | 7.7% | 5.7% | -9.5% | -0.3% | 9.2% |
| ROE | -11.1% | 7.4% | 4.7% | -48.3% | -52.8% | -4.5% |
| Net Debt/EBITDA | | -1.1x | -2.2x | | 37.8x | 37.8x |
Revenue and profitability
The company's Revenue decreased on 5.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 24.1 pp from -18.3% to 5.7% in FY2016.
Gross Margin jumped on 25.4 pp from 19.0% to 44.4% in FY2016. SG&A as a % of Revenue decreased slightly on 0.66 pp from 46.0% to 45.3% in FY2016.
Net Income marign surged on 35.4 pp from -116% to -80.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2016. The company showed small growth in CAPEX/Revenue of 1.7 pp from 0.13% in FY2013 to 1.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.79%.
Return on investment
The company operates at negative ROIC (-0.30%) and ROE (-52.77%). ROIC increased on 9.2 pp from -9.5% to -0.30% in FY2016. ROE decreased on 4.5 pp from -48.3% to -52.8% in FY2016.
Leverage (Debt)
Debt level is 37.8x Net Debt / EBITDA and 41.4x Debt / EBITDA. Net Debt / EBITDA jumped37.8x from to 37.8x in FY2016. Debt jumped while cash dropped on 30.2%.
Appendix 1: Peers in Retail
Below we provide Combest Holdings 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% | |
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
| 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% | |
| |
|---|
| Median (117 companies) | 7.5% | 6.5% | 3.1% | -1.0% | -8.0% |
|---|
| Combest Holdings Ltd ($8190) | | -2.7% | -6.5% | -8.2% | -5.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
| 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% | |
| |
|---|
| Median (103 companies) | 37.2% | 35.8% | 35.0% | 33.9% | 43.9% |
|---|
| Combest Holdings Ltd ($8190) | 27.4% | 52.9% | 50.2% | 19.0% | 44.4% |
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% | 7.3% | 8.9% | 7.4% | 4.7% |
|---|
| Combest Holdings Ltd ($8190) | -2.7% | 29.7% | 26.5% | -18.3% | 5.7% |
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) | 4.1% | 3.6% | 3.8% | 3.5% | 1.8% |
|---|
| Combest Holdings Ltd ($8190) | 0.6% | 0.1% | 0.1% | 0.5% | 1.8% |
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% |
|---|
| Combest Holdings Ltd ($8190) | -4.0% | 7.7% | 5.7% | -9.5% | -0.3% |
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 (92 companies) | -0.5x | -0.5x | -0.2x | -0.5x | -0.8x |
|---|
