VS International Group Ltd EBITDA dropped on 27.4% and EBITDA Margin decreased slightly on 1.4 pp from 6.1% to 4.7%
27/09/2016 • About VS International Group Ltd (
$1002) • By InTwits
VS International Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- VS International Group Ltd is a company in decline: FY2016 revenue growth was -5.4%, 5 years revenue CAGR was -11.5%
- EBITDA Margin is relatively stable: 4.7% in FY2016 vs. 6.1% in FY2015 vs. 6.4% in FY2012
- VS International Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 6.9%.
- CAPEX is quite volatile: 47.4 in FY2016, 40.6 in FY2015, 25.3 in FY2014, 25.3 in FY2013, 71.8 in FY2012
- The company has unprofitable business model: ROIC is at -1.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
VS International Group Ltd ($1002) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,513 | 1,221 | 1,371 | 934 | 884 | -5.4% |
| Gross Profit | 149 | 107 | 169 | 138 | 149 | 8.4% |
| SG&A | | 133 | 161 | 131 | 130 | -1.1% |
| EBITDA | 97 | 57 | 81 | 57 | 42 | -27.4% |
| Net Income | -74 | -38 | -26 | -23 | -33 | |
Balance Sheet
|
|---|
| Cash | 91 | 81 | 102 | 78 | 59 | -24.8% |
| Short Term Debt | 331 | 223 | 264 | 148 | 165 | 11.1% |
| Long Term Debt | 257 | 226 | 195 | 117 | 85 | -27.1% |
Cash flow
|
|---|
| Capex | 72 | 25 | 25 | 41 | 47 | 16.9% |
Ratios
|
|---|
| Revenue growth | -7.1% | -19.3% | 12.3% | -31.8% | -5.4% | |
| EBITDA growth | 37.1% | -41.4% | 42.2% | -29.0% | -27.4% | |
| Gross Margin | 9.8% | 8.8% | 12.3% | 14.7% | 16.9% | 2.1% |
| EBITDA Margin | 6.4% | 4.6% | 5.9% | 6.1% | 4.7% | -1.4% |
| Net Income Margin | -4.9% | -3.1% | -1.9% | -2.5% | -3.7% | -1.2% |
| SG&A, % of revenue | | 10.9% | 11.8% | 14.0% | 14.7% | 0.6% |
| CAPEX, % of revenue | 4.7% | 2.1% | 1.8% | 4.3% | 5.4% | 1.0% |
| ROIC | 0.2% | -2.8% | 1.4% | 1.5% | -1.1% | -2.5% |
| ROE | -17.0% | -9.3% | -6.2% | -5.5% | -7.9% | -2.3% |
| Net Debt/EBITDA | 5.1x | 6.5x | 4.4x | 3.3x | 4.6x | 1.3x |
Revenue and profitability
The company's Revenue decreased on 5.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.6 pp from 1.6% to 6.2% in FY2016.
Gross Margin increased on 2.1 pp from 14.7% to 16.9% in FY2016. SG&A as a % of Revenue increased slightly on 0.63 pp from 14.0% to 14.7% in FY2016.
Net Income marign decreased slightly on 1.2 pp from -2.5% to -3.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.4% in FY2016. CAPEX/Revenue increased on 3.3 pp from 2.1% in FY2013 to 5.4% in FY2016. Average CAPEX/Revenue for the last three years was 3.9%.VS International Group Ltd has spent a lot to CAPEX (114% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-1.08%) and ROE (-7.85%). ROIC decreased on 2.5 pp from 1.5% to -1.1% in FY2016. ROE decreased on 2.3 pp from -5.5% to -7.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.6x and Debt / EBITDA is 6.0x. Net Debt / EBITDA jumped on 1.3x from 3.3x to 4.6x in FY2016. Debt decreased on 5.8% while cash dropped on 24.8%.
Appendix 1: Peers in Miscellaneous Manufactur
Below we provide VS International Group Ltd benchmarking against other companies in Miscellaneous Manufactur 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 |
|---|
| Karrie International Hldgs ($1050) | | 0.1% | -11.3% | 27.4% | 11.8% |
| Sunny Optical Technology Group Co Ltd ($2382) | 59.5% | 45.9% | 45.0% | 26.9% | |
| TK Group Holdings Ltd ($2283) | 40.2% | 9.3% | 11.8% | 20.0% | |
| AMCO United Holding Ltd ($2970) | | 10.8% | 53.9% | 16.8% | 31.1% |
| Yusei Holdings Ltd ($96) | 18.4% | -9.3% | 6.7% | 15.6% | |
| |
|---|
| Median (25 companies) | -1.8% | 0.1% | 6.7% | -4.8% | 26.0% |
|---|
| VS International Group Ltd ($1002) | | -19.3% | 12.3% | -31.8% | -5.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Man Sang International Ltd ($938) | 42.4% | 32.8% | 60.3% | 78.6% | 56.4% |
| Time Watch Investments Ltd ($2033) | 60.2% | 60.6% | 65.0% | 68.1% | 68.5% |
| China Environmental Energy Investment Ltd ($986) | 14.0% | 1.2% | 9.0% | 49.2% | 40.4% |
| Lee & Man Chemical Co Ltd ($746) | 34.3% | 35.7% | 41.9% | 39.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 33.2% | 35.1% | 37.4% | 38.7% | |
| |
|---|
| Median (24 companies) | 19.8% | 20.8% | 24.9% | 23.9% | 32.1% |
|---|
| VS International Group Ltd ($1002) | 9.8% | 8.8% | 12.3% | 14.7% | 16.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 30.4% | 31.3% | 38.4% | 37.6% | |
| Man Sang International Ltd ($938) | 24.9% | 15.4% | 37.0% | 33.8% | 40.4% |
| IPE Group Ltd ($929) | 25.6% | 22.5% | 29.5% | 29.1% | |
| DeTeam Co Ltd ($65) | 8.0% | 3.9% | -1.3% | 24.3% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 18.4% | 19.8% | 20.6% | 24.2% | |
| |
|---|
| Median (25 companies) | 8.0% | 9.8% | 9.8% | 7.9% | 7.9% |
|---|
| VS International Group Ltd ($1002) | 6.4% | 4.6% | 5.9% | 6.1% | 4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Environmental Energy Investment Ltd ($986) | 6.1% | 0.4% | 17.9% | 47.6% | 6.2% |
| DeTeam Co Ltd ($65) | 6.7% | 47.0% | 5.6% | 33.1% | |
| Lee & Man Chemical Co Ltd ($746) | 5.8% | 51.1% | 33.7% | 22.8% | |
| China International Marine Containers Group Co Ltd ($2039) | 3.9% | 12.1% | 18.5% | 21.2% | |
| IPE Group Ltd ($929) | 6.3% | 13.3% | 12.3% | 13.3% | |
| |
|---|
| Median (25 companies) | 4.6% | 4.2% | 4.2% | 5.6% | 3.7% |
|---|
| VS International Group Ltd ($1002) | 4.7% | 2.1% | 1.8% | 4.3% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Time Watch Investments Ltd ($2033) | 34.5% | 27.1% | 27.8% | 27.9% | 18.6% |
| TK Group Holdings Ltd ($2283) | 36.8% | 31.1% | 29.4% | 27.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 16.9% | 17.7% | 20.0% | 21.1% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 19.7% | 17.8% | 16.5% | 19.4% | |
| Yusei Holdings Ltd ($96) | 4.2% | 7.0% | 13.6% | 14.1% | |
| |
|---|
| Median (25 companies) | 4.3% | 4.4% | 4.4% | 1.6% | 9.2% |
|---|
| VS International Group Ltd ($1002) | 0.2% | -2.8% | 1.4% | 1.5% | -1.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Continental Holdings Ltd ($513) | | 20.1x | 92.9x | 4,203.6x | |
| South China China Ltd ($413) | | 37.5x | 2,842.3x | 27.3x | |
| Launch Tech Co Ltd ($2488) | 7.6x | 2.4x | 3.9x | 14.5x | |
| China International Marine Containers Group Co Ltd ($2039) | 4.0x | 4.7x | 5.8x | 9.8x | |
| Lee & Man Chemical Co Ltd ($746) | -0.2x | 1.5x | 2.2x | 2.5x | |
| |
|---|
| Median (22 companies) | -0.2x | -0.2x | -0.2x | 0.1x | -1.0x |
|---|
| VS International Group Ltd ($1002) | 5.1x | 6.5x | 4.4x | 3.3x | 4.6x |
