361 Degrees International Ltd Net Income dropped on 22.2% in 2016 while Revenue surged on 12.6%
14/03/2017 • About 361 Degrees International Ltd (
$1361) • By InTwits
361 Degrees International Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- 361 Degrees International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 9.6%.
- CAPEX is quite volatile: 148 in FY2016, 253 in FY2015, 135 in FY2014, 44.0 in FY2013, 151 in FY2012
- The company has business model with average profitability: ROIC is at 10.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
361 Degrees International Ltd ($1361) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,951 | 3,583 | 3,906 | 4,459 | 5,023 | 12.6% |
| Gross Profit | 1,972 | 1,417 | 1,597 | 1,823 | 2,110 | 15.7% |
| SG&A | 1,105 | 916 | 988 | 951 | 1,076 | 13.2% |
| EBITDA | 918 | 361 | 727 | 856 | 993 | 16.1% |
| Net Income | 707 | 211 | 398 | 518 | 403 | -22.2% |
Balance Sheet
|
|---|
| Cash | 2,107 | 2,494 | 2,130 | 2,286 | 2,882 | 26.0% |
| Short Term Debt | 533 | 229 | 799 | 422 | 76 | -82.0% |
| Long Term Debt | 753 | 768 | 1,485 | 1,489 | 2,727 | 83.1% |
Cash flow
|
|---|
| Capex | 151 | 44 | 135 | 253 | 148 | -41.7% |
Ratios
|
|---|
| Revenue growth | -9.4% | -27.6% | 9.0% | 14.1% | 12.6% | |
| EBITDA growth | -37.6% | -60.6% | 101.0% | 17.7% | 16.1% | |
| Gross Margin | 39.8% | 39.5% | 40.9% | 40.9% | 42.0% | 1.1% |
| EBITDA Margin | 18.5% | 10.1% | 18.6% | 19.2% | 19.8% | 0.6% |
| Net Income Margin | 14.3% | 5.9% | 10.2% | 11.6% | 8.0% | -3.6% |
| SG&A, % of revenue | 22.3% | 25.6% | 25.3% | 21.3% | 21.4% | 0.1% |
| CAPEX, % of revenue | 3.0% | 1.2% | 3.5% | 5.7% | 2.9% | -2.7% |
| ROIC | 15.6% | 4.9% | 9.8% | 10.5% | 10.9% | 0.5% |
| ROE | 15.9% | 4.5% | 8.2% | 10.1% | 7.6% | -2.5% |
| Net Debt/EBITDA | -0.9x | -4.1x | 0.2x | -0.4x | -0.1x | 0.4x |
Revenue and profitability
The company's Revenue surged on 12.6%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.6 pp from 2.9% to -0.70% in FY2016.
Gross Margin increased slightly on 1.1 pp from 40.9% to 42.0% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 3.6 pp from 11.6% to 8.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 2.9%. 361 Degrees International Ltd's CAPEX/Revenue increased slightly on 1.7 pp from 1.2% in FY2013 to 2.9% in FY2016. Average CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at low ROIC (10.91%) and ROE (7.61%). ROIC showed almost no change in FY2016. ROE decreased on 2.5 pp from 10.1% to 7.6% in FY2016.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from -0.4x to -0.1x in FY2016. Debt jumped on 46.6% while cash surged on 26.0%.
Appendix 1: Peers in Retail
Below we provide 361 Degrees International 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) | 8.6% | 6.5% | 2.9% | -1.0% | -8.0% |
|---|
| 361 Degrees International Ltd ($1361) | | -27.6% | 9.0% | 14.1% | 12.6% |
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) | 36.2% | 35.8% | 35.0% | 33.3% | 44.7% |
|---|
| 361 Degrees International Ltd ($1361) | 39.8% | 39.5% | 40.9% | 40.9% | 42.0% |
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% | 46.3% |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (117 companies) | 10.3% | 7.3% | 8.9% | 7.1% | 5.7% |
|---|
| 361 Degrees International Ltd ($1361) | 18.5% | 10.1% | 18.6% | 19.2% | 19.8% |
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% | 3.1% | 1.9% |
|---|
| 361 Degrees International Ltd ($1361) | 3.0% | 1.2% | 3.5% | 5.7% | 2.9% |
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% | 46.2% |
| 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) | 12.2% | 8.9% | 8.5% | 5.8% | 3.1% |
|---|
| 361 Degrees International Ltd ($1361) | 15.6% | 4.9% | 9.8% | 10.5% | 10.9% |
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 | 11.1x |
| 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 (91 companies) | -0.5x | -0.5x | -0.2x | -0.5x | -0.7x |
|---|
| 361 Degrees International Ltd ($1361) | -0.9x | -4.1x | 0.2x | -0.4x | -0.1x |
