Lai Sun Garment International Ltd CAPEX dropped on 72.5% while Revenue surged on 20.2%
19/10/2016 • About Lai Sun Garment International Ltd (
$191) • By InTwits
Lai Sun Garment International Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lai Sun Garment International Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.5%
- Lai Sun Garment International Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 64.2%. At the same time it's in pair with industry average of 56.8%.
- CAPEX is quite volatile: 823 in FY2016, 2,998 in FY2015, 904 in FY2014, 300 in FY2013, 255 in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.5%
- It operates with high leverage: Net Debt/EBITDA is 11.7x while industry average is 3.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lai Sun Garment International Ltd ($191) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 947 | 1,049 | 2,205 | 1,641 | 1,972 | 20.2% |
| Gross Profit | 587 | 661 | 1,098 | 973 | 1,084 | 11.5% |
| SG&A | | 343 | 405 | 306 | 314 | 2.6% |
| EBITDA | 228 | 276 | 659 | 569 | 615 | 8.2% |
| Net Income | 1,386 | 1,664 | 940 | 1,291 | 683 | -47.1% |
Balance Sheet
|
|---|
| Cash | 1,747 | 3,183 | 2,458 | 1,769 | 2,912 | 64.5% |
| Short Term Debt | 1,418 | 431 | 430 | 1,322 | 691 | -47.7% |
| Long Term Debt | 1,934 | 6,018 | 6,430 | 7,132 | 9,430 | 32.2% |
Cash flow
|
|---|
| Capex | 255 | 300 | 904 | 2,998 | 823 | -72.5% |
Ratios
|
|---|
| Revenue growth | -10.5% | 10.7% | 110.2% | -25.6% | 20.2% | |
| EBITDA growth | 25.7% | 20.7% | 139.2% | -13.7% | 8.2% | |
| Gross Margin | 61.9% | 63.0% | 49.8% | 59.3% | 55.0% | -4.3% |
| EBITDA Margin | 24.1% | 26.3% | 29.9% | 34.7% | 31.2% | -3.5% |
| Net Income Margin | 146.3% | 158.6% | 42.7% | 78.7% | 34.6% | -44.0% |
| SG&A, % of revenue | | 32.7% | 18.4% | 18.7% | 15.9% | -2.7% |
| CAPEX, % of revenue | 26.9% | 28.6% | 41.0% | 182.7% | 41.8% | -141.0% |
| ROIC | 1.0% | 1.0% | 2.1% | 1.6% | 1.5% | -0.1% |
| ROE | 16.7% | 16.6% | 8.0% | 9.8% | 4.5% | -5.3% |
| Net Debt/EBITDA | 7.0x | 11.8x | 6.7x | 11.7x | 11.7x | -0.0x |
Revenue and profitability
The company's Revenue jumped on 20.2%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.5 pp from 34.7% to 31.2% in FY2016.
Gross Margin decreased on 4.3 pp from 59.3% to 55.0% in FY2016. SG&A as a % of Revenue decreased on 2.7 pp from 18.7% to 15.9% in FY2016.
Net Income marign dropped on 44.0 pp from 78.7% to 34.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 41.8% in FY2016. CAPEX/Revenue jumped on 13.1 pp from 28.6% in FY2013 to 41.8% in FY2016. Average CAPEX/Revenue for the last three years was 88.5%.To secure this fast growth Lai Sun Garment International Ltd made large investments to CAPEX (134% of EBITDA).
Return on investment
The company operates at low ROIC (1.53%) and ROE (4.52%). ROIC showed almost no change in FY2016. ROE decreased on 5.3 pp from 9.8% to 4.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 11.7x and Debt / EBITDA is 16.4x. Net Debt / EBITDA decreased on 0.034x from 11.7x to 11.7x in FY2016. Debt jumped on 19.7% while cash surged on 64.5%.
Appendix 1: Peers in Real Estate
Below we provide Lai Sun Garment International Ltd benchmarking against other companies in Real Estate 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 |
|---|
| Guangdong Land Holdings Ltd ($124) | | | | 24,971.2% | |
| GR Properties Ltd ($108) | 21.6% | -82.9% | 14.6% | 1,203.6% | |
| Wanda Hotel Development Co Ltd ($169) | | -51.4% | -86.2% | 1,071.2% | |
| Henderson Investment Ltd ($97) | -78.9% | | | 737.1% | |
| ITC Properties Group Ltd ($199) | | -95.2% | 75.7% | 678.6% | 206.4% |
| |
|---|
| Median (179 companies) | 17.0% | 13.5% | 5.2% | 4.5% | 5.1% |
|---|
| Lai Sun Garment International Ltd ($191) | | 10.7% | 110.2% | -25.6% | 20.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Renhe Commercial Holdings Co Ltd ($1387) | 79.0% | 95.2% | 97.9% | 99.9% | |
| Tern Properties Co Ltd ($277) | 96.7% | 98.4% | 98.4% | 98.7% | 98.8% |
| YT Realty Group Ltd ($75) | 94.4% | 96.6% | 96.7% | 97.6% | |
| Wah Ha Realty Co Ltd ($278) | 96.3% | 96.0% | 93.2% | 95.9% | 92.9% |
| Soundwill Holdings Ltd ($878) | 53.1% | 74.5% | 46.9% | 95.7% | |
| |
|---|
| Median (160 companies) | 41.9% | 41.8% | 39.1% | 38.2% | 43.8% |
|---|
| Lai Sun Garment International Ltd ($191) | 61.9% | 63.0% | 49.8% | 59.3% | 55.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chinese Estates Holdings Ltd ($127) | 356.2% | 91.6% | 195.5% | 397.4% | |
| Zall Development Group Ltd ($2098) | 105.3% | 133.1% | 143.2% | 213.9% | |
| SOHO China Ltd ($410) | 113.6% | 80.8% | 104.0% | 201.9% | |
| Beijing Properties Holdings Ltd ($925) | -606.3% | 2,162.6% | 224.3% | 186.5% | |
| Swire Properties Ltd ($1972) | 154.5% | 114.6% | 73.2% | 100.3% | |
| |
|---|
| Median (179 companies) | 29.3% | 28.5% | 26.9% | 23.4% | 32.2% |
|---|
| Lai Sun Garment International Ltd ($191) | 24.1% | 26.3% | 29.9% | 34.7% | 31.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| LT Commercial Real Estate Ltd ($112) | 0.0% | 18.0% | 27,965.5% | 4,834.8% | |
| China Oceanwide Holdings Ltd ($715) | 0.8% | 0.3% | 2.0% | 880.6% | |
| Madex International Holdings Ltd ($231) | 174.5% | 519.7% | 205.3% | 350.6% | |
| Pacific Century Premium Developments Ltd ($432) | 2.9% | 323.1% | 351.2% | 340.6% | |
| Hon Kwok Land Investment Co Ltd ($160) | 20.6% | 157.3% | 144.5% | 296.3% | 28.1% |
| |
|---|
| Median (179 companies) | 5.6% | 6.1% | 4.7% | 3.2% | 1.7% |
|---|
| Lai Sun Garment International Ltd ($191) | 26.9% | 28.6% | 41.0% | 182.7% | 41.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hydoo International Holding Ltd ($1396) | 44.3% | 62.0% | 12.9% | 16.6% | |
| Gemdale Properties & Investment Corp Ltd ($535) | 15.3% | 19.6% | 10.8% | 15.9% | |
| China Overseas Land & Investment Ltd ($688) | | 15.1% | 18.5% | 15.4% | 13.0% |
| Colour Life Services Group Co Ltd ($1778) | 44.2% | 47.9% | 29.3% | 14.5% | |
| Dalian Wanda Commercial Properties Co Ltd ($3699) | 26.8% | 19.6% | 12.3% | 14.4% | |
| |
|---|
| Median (181 companies) | 4.2% | 4.1% | 4.2% | 2.5% | 1.9% |
|---|
| Lai Sun Garment International Ltd ($191) | 1.0% | 1.0% | 2.1% | 1.6% | 1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shui On Land Ltd ($272) | 22.1x | 13.2x | 17.1x | 54.2x | |
| Beijing Capital Land Ltd ($2868) | 7.1x | 4.6x | 11.7x | 49.1x | |
| Talent Property Group Ltd ($760) | | | | 43.0x | |
| Mingfa Group International Co Ltd ($846) | 2.5x | 3.0x | 6.3x | 42.9x | |
| Sunshine 100 China Holdings Ltd ($2608) | 9.9x | 12.4x | 12.9x | 42.3x | |
| |
|---|
| Median (136 companies) | 2.3x | 2.7x | 3.0x | 3.2x | 2.3x |
|---|
| Lai Sun Garment International Ltd ($191) | 7.0x | 11.8x | 6.7x | 11.7x | 11.7x |
