Texhong Textile Group Ltd reports 101% Net Income growth and 29.1% Revenue growth
03/03/2017 • About Texhong Textile Group Ltd (
$2678) • By InTwits
Texhong Textile Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Texhong Textile Group Ltd is a growth stock: FY2016 revenue growth was 29.1%, 5 year revenue CAGR was 14.7% at FY2016 ROIC 19.4%
- The company has highly profitable business model: ROIC is at 19.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.7x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Texhong Textile Group Ltd ($2678) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,341 | 8,229 | 10,470 | 10,575 | 13,648 | 29.1% |
| Gross Profit | 1,124 | 1,583 | 1,294 | 1,906 | 2,645 | 38.8% |
| SG&A | 413 | 521 | 652 | 711 | 1,043 | 46.8% |
| EBITDA | 894 | 1,621 | 1,032 | 1,709 | 2,461 | 44.0% |
| Net Income | 487 | 1,126 | 307 | 591 | 1,188 | 101.0% |
Balance Sheet
|
|---|
| Cash | 530 | 919 | 1,094 | 1,940 | 1,813 | -6.5% |
| Short Term Debt | 206 | 221 | 353 | 1,671 | 3,550 | 112.4% |
| Long Term Debt | 1,564 | 2,802 | 3,117 | 2,741 | 2,560 | -6.6% |
Cash flow
|
|---|
| Capex | 656 | 968 | 607 | 1,106 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 6.8% | 12.1% | 27.2% | 1.0% | 29.1% | |
| EBITDA growth | 152.1% | 81.3% | -36.4% | 65.6% | 44.0% | |
| Gross Margin | 15.3% | 19.2% | 12.4% | 18.0% | 19.4% | 1.4% |
| EBITDA Margin | 12.2% | 19.7% | 9.9% | 16.2% | 18.0% | 1.9% |
| Net Income Margin | 6.6% | 13.7% | 2.9% | 5.6% | 8.7% | 3.1% |
| SG&A, % of revenue | 5.6% | 6.3% | 6.2% | 6.7% | 7.6% | 0.9% |
| CAPEX, % of revenue | 8.9% | 11.8% | 5.8% | 10.5% | | -10.5% |
| ROIC | 16.7% | 25.3% | 9.6% | 16.4% | 19.4% | 3.0% |
| ROE | 21.0% | 37.9% | 9.0% | 16.0% | 26.2% | 10.2% |
| Net Debt/EBITDA | 1.4x | 1.3x | 2.3x | 1.4x | 1.7x | 0.3x |
Revenue and profitability
Texhong Textile Group Ltd's Revenue jumped on 29.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 3.4% to 1.2% in FY2016.
Gross Margin increased slightly on 1.4 pp from 18.0% to 19.4% in FY2016. SG&A as a % of Revenue increased slightly on 0.92 pp from 6.7% to 7.6% in FY2016.
Net Income marign increased on 3.1 pp from 5.6% to 8.7% in FY2016.
Return on investment
The company operates at high and attractive ROE (26.22%) while ROIC is a bit lower (19.42%). ROIC increased on 3.0 pp from 16.4% to 19.4% in FY2016. ROE surged on 10.2 pp from 16.0% to 26.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 2.5x. Net Debt / EBITDA jumped on 0.3x from 1.4x to 1.7x in FY2016. Debt surged on 38.5% while cash decreased on 6.5%.
Management team
The company's CEO Hong Tianzhu has spent 7 years at the company.
Appendix 1: Peers in Apparel
Below you can find Texhong Textile Group Ltd benchmarking vs. other companies in Apparel industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
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) | | 9.3% | 6.3% | 23.7% | -1.5% |
| Cosmo Lady China Holdings Co Ltd ($2298) | 36.3% | 29.2% | 37.4% | 23.6% | |
| |
|---|
| Median (52 companies) | 6.8% | 5.8% | 5.3% | -2.6% | -16.7% |
|---|
| Texhong Textile Group Ltd ($2678) | | 12.1% | 27.2% | 1.0% | 29.1% |
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% | 59.7% |
| |
|---|
| Median (51 companies) | 25.2% | 24.5% | 26.4% | 25.0% | 17.7% |
|---|
| Texhong Textile Group Ltd ($2678) | 15.3% | 19.2% | 12.4% | 18.0% | 19.4% |
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% | 22.9% |
| 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 (52 companies) | 10.5% | 10.7% | 6.8% | 6.6% | -3.5% |
|---|
| Texhong Textile Group Ltd ($2678) | 12.2% | 19.7% | 9.9% | 16.2% | 18.0% |
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% | 1.8% |
| Prada SpA ($1913) | 9.7% | 10.6% | 15.3% | 10.2% | 11.1% |
| Citychamp Watch & Jewellery Group Ltd ($256) | 6.5% | 5.6% | 3.6% | 8.6% | |
| |
|---|
| Median (51 companies) | 2.2% | 3.0% | 2.1% | 2.3% | 1.8% |
|---|
| Texhong Textile Group Ltd ($2678) | 8.9% | 11.8% | 5.8% | 10.5% | |
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% | 16.1% |
| Sitoy Group Holdings Ltd ($1023) | 39.3% | 28.7% | 31.8% | 22.0% | 16.4% |
| Prada SpA ($1913) | 32.1% | 37.4% | 34.0% | 21.9% | 14.0% |
| |
|---|
| Median (52 companies) | 11.7% | 7.3% | 4.1% | 4.9% | -3.3% |
|---|
| Texhong Textile Group Ltd ($2678) | 16.7% | 25.3% | 9.6% | 16.4% | 19.4% |
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 | |
| Citychamp Watch & Jewellery Group Ltd ($256) | 0.6x | 0.4x | 2.6x | 1.4x | |
| |
|---|
| Median (38 companies) | -0.3x | -0.7x | -0.3x | -1.2x | -2.0x |
|---|
| Texhong Textile Group Ltd ($2678) | 1.4x | 1.3x | 2.3x | 1.4x | 1.7x |
