China Lilang Ltd reports 332% CAPEX growth in 2016 while 10.3% Revenue decline
13/03/2017 • About China Lilang Ltd (
$1234) • By InTwits
China Lilang Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Lilang Ltd is a company in decline: FY2016 revenue growth was -10.3%, 5 years revenue CAGR was -2.3%
- China Lilang Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 38.3%.
- CAPEX is quite volatile: 141 in FY2016, 32.6 in FY2015, 16.6 in FY2014, 19.9 in FY2013, 62.6 in FY2012
- The company has highly profitable business model: ROIC is at 16.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Lilang Ltd ($1234) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,793 | 2,299 | 2,433 | 2,689 | 2,412 | -10.3% |
| Gross Profit | 1,124 | 980 | 1,036 | 1,143 | 996 | -12.9% |
| SG&A | 428 | 406 | 379 | 395 | 424 | 7.2% |
| EBITDA | 735 | 617 | 716 | 824 | 690 | -16.2% |
| Net Income | 627 | 516 | 555 | 625 | 540 | -13.6% |
Balance Sheet
|
|---|
| Cash | 1,243 | 1,436 | 1,845 | 2,162 | 1,614 | -25.4% |
| Short Term Debt | 163 | 418 | 901 | 1,004 | 494 | -50.8% |
| Long Term Debt | 293 | 145 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 63 | 20 | 17 | 33 | 141 | 332.5% |
Ratios
|
|---|
| Revenue growth | 3.2% | -17.7% | 5.8% | 10.5% | -10.3% | |
| EBITDA growth | 1.7% | -16.0% | 16.0% | 15.1% | -16.2% | |
| Gross Margin | 40.2% | 42.6% | 42.6% | 42.5% | 41.3% | -1.2% |
| EBITDA Margin | 26.3% | 26.9% | 29.4% | 30.6% | 28.6% | -2.0% |
| Net Income Margin | 22.4% | 22.5% | 22.8% | 23.2% | 22.4% | -0.9% |
| SG&A, % of revenue | 15.3% | 17.7% | 15.6% | 14.7% | 17.6% | 2.9% |
| CAPEX, % of revenue | 2.2% | 0.9% | 0.7% | 1.2% | 5.8% | 4.6% |
| ROIC | 27.3% | 19.1% | 19.7% | 20.2% | 16.8% | -3.4% |
| ROE | 27.5% | 21.1% | 21.3% | 22.3% | 18.2% | -4.1% |
| Net Debt/EBITDA | -1.1x | -1.4x | -1.3x | -1.4x | -1.6x | -0.2x |
Revenue and profitability
China Lilang Ltd's Revenue dropped on 10.3%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.0 pp from 30.6% to 28.6% in FY2016.
Gross Margin decreased slightly on 1.2 pp from 42.5% to 41.3% in FY2016. SG&A as a % of Revenue increased on 2.9 pp from 14.7% to 17.6% in FY2016.
Net Income marign decreased slightly on 0.86 pp from 23.2% to 22.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.8% in FY2016. The company showed CAPEX/Revenue growth of 5.0 pp from 0.87% in FY2013 to 5.8% in FY2016. Average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at good ROIC (16.76%) and ROE (18.23%). ROIC decreased on 3.4 pp from 20.2% to 16.8% in FY2016. ROE decreased on 4.1 pp from 22.3% to 18.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.6x and Debt / EBITDA is 0.7x. Net Debt / EBITDA dropped on 0.2x from -1.4x to -1.6x in FY2016. Debt dropped on 50.8% while cash dropped on 25.4%.
Appendix 1: Peers in Apparel
Below you can find China Lilang 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) | 7.0% | 6.9% | 5.3% | -2.6% | -15.9% |
|---|
| China Lilang Ltd ($1234) | | -17.7% | 5.8% | 10.5% | -10.3% |
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) | 24.8% | 23.9% | 25.4% | 25.0% | 17.7% |
|---|
| China Lilang Ltd ($1234) | 40.2% | 42.6% | 42.6% | 42.5% | 41.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | |
| HOSA International Ltd ($2200) | 44.4% | 42.2% | 37.6% | 26.7% | |
| |
|---|
| Median (52 companies) | 10.5% | 10.7% | 6.8% | 6.6% | -3.5% |
|---|
| China Lilang Ltd ($1234) | 26.3% | 26.9% | 29.4% | 30.6% | 28.6% |
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% |
| Texhong Textile Group Ltd ($2678) | 8.9% | 11.8% | 5.8% | 10.5% | |
| Prada SpA ($1913) | 9.7% | 10.6% | 15.3% | 10.2% | 11.1% |
| |
|---|
| Median (51 companies) | 2.4% | 3.1% | 2.4% | 2.6% | 1.8% |
|---|
| China Lilang Ltd ($1234) | 2.2% | 0.9% | 0.7% | 1.2% | 5.8% |
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% |
|---|
| China Lilang Ltd ($1234) | 27.3% | 19.1% | 19.7% | 20.2% | 16.8% |
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 | |
| Texhong Textile Group Ltd ($2678) | 1.4x | 1.3x | 2.3x | 1.4x | 1.7x |
| |
|---|
| Median (38 companies) | -0.2x | -0.7x | -0.1x | -1.0x | -1.1x |
|---|
| China Lilang Ltd ($1234) | -1.1x | -1.4x | -1.3x | -1.4x | -1.6x |
