XTEP International Holdings Ltd reports 15.2% Net Income decline and 0.85 pp EBITDA Margin growth from 16.8% to 17.7%
17/03/2017 • About XTEP International Holdings Ltd (
$1368) • By InTwits
XTEP International Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- XTEP International Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 22.0%.
- CAPEX is quite volatile: 112 in FY2016, 78.5 in FY2015, 106 in FY2014, 201 in FY2013, 165 in FY2012
- The company has highly profitable business model: ROIC is at 12.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
XTEP International Holdings Ltd ($1368) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,550 | 4,343 | 4,778 | 5,295 | 5,397 | 1.9% |
| Gross Profit | 2,258 | 1,748 | 1,947 | 2,237 | 2,331 | 4.2% |
| SG&A | 1,021 | 848 | 1,052 | 1,308 | 1,153 | -11.9% |
| EBITDA | 1,133 | 844 | 739 | 892 | 955 | 7.1% |
| Net Income | 810 | 606 | 478 | 623 | 528 | -15.2% |
Balance Sheet
|
|---|
| Cash | 3,123 | 3,563 | 3,137 | 3,607 | 2,847 | -21.1% |
| Short Term Debt | 511 | 1,354 | 1,232 | 1,489 | 1,502 | 0.8% |
| Long Term Debt | 535 | 175 | 617 | 121 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 165 | 201 | 106 | 79 | 112 | 42.3% |
Ratios
|
|---|
| Revenue growth | 0.2% | -21.7% | 10.0% | 10.8% | 1.9% | |
| EBITDA growth | -9.2% | -25.5% | -12.5% | 20.7% | 7.1% | |
| Gross Margin | 40.7% | 40.2% | 40.8% | 42.2% | 43.2% | 1.0% |
| EBITDA Margin | 20.4% | 19.4% | 15.5% | 16.8% | 17.7% | 0.9% |
| Net Income Margin | 14.6% | 14.0% | 10.0% | 11.8% | 9.8% | -2.0% |
| SG&A, % of revenue | 18.4% | 19.5% | 22.0% | 24.7% | 21.4% | -3.3% |
| CAPEX, % of revenue | 3.0% | 4.6% | 2.2% | 1.5% | 2.1% | 0.6% |
| ROIC | 21.0% | 13.2% | 10.3% | 12.0% | 12.7% | 0.7% |
| ROE | 19.8% | 13.8% | 10.4% | 13.0% | 10.8% | -2.3% |
| Net Debt/EBITDA | -1.8x | -2.4x | -1.7x | -2.2x | -1.4x | 0.8x |
Revenue and profitability
The company's Revenue increased slightly on 1.9%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 102 pp from -31.9% to 70.5% in FY2016.
Gross Margin increased slightly on 0.96 pp from 42.2% to 43.2% in FY2016. SG&A as a % of Revenue decreased on 3.3 pp from 24.7% to 21.4% in FY2016.
Net Income marign decreased slightly on 2.0 pp from 11.8% to 9.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.1% in FY2016. XTEP International Holdings Ltd's CAPEX/Revenue decreased on 2.6 pp from 4.6% in FY2013 to 2.1% in FY2016. For the last three years the average CAPEX/Revenue was 1.9%.
Return on investment
The company operates at good ROIC (12.66%) while ROE is low (10.77%). ROIC increased slightly on 0.68 pp from 12.0% to 12.7% in FY2016. ROE decreased on 2.3 pp from 13.0% to 10.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.4x and Debt / EBITDA is 1.6x. Net Debt / EBITDA jumped on 0.8x from -2.2x to -1.4x in FY2016. Debt decreased on 6.8% while cash dropped on 21.1%.
Appendix 1: Peers in Retail
Below we provide XTEP International Holdings 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) | | 85.6% | -42.1% | 419.8% | 21.8% |
| Noble House China Holdings Ltd ($8246) | | -20.2% | -24.8% | 117.2% | 129.1% |
| 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) | | 72.8% | 23.0% | 48.3% | 12.5% |
| |
|---|
| Median (117 companies) | 9.8% | 6.5% | 2.9% | -1.0% | -6.5% |
|---|
| XTEP International Holdings Ltd ($1368) | | -21.7% | 10.0% | 10.8% | 1.9% |
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% | 45.2% |
|---|
| XTEP International Holdings Ltd ($1368) | 40.7% | 40.2% | 40.8% | 42.2% | 43.2% |
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% | 6.8% |
|---|
| XTEP International Holdings Ltd ($1368) | 20.4% | 19.4% | 15.5% | 16.8% | 17.7% |
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% | 3.5% | 2.1% |
|---|
| XTEP International Holdings Ltd ($1368) | 3.0% | 4.6% | 2.2% | 1.5% | 2.1% |
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% | 68.8% |
| |
|---|
| Median (117 companies) | 12.2% | 8.8% | 8.5% | 5.8% | 5.2% |
|---|
| XTEP International Holdings Ltd ($1368) | 21.0% | 13.2% | 10.3% | 12.0% | 12.7% |
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 | -0.6x |
|---|
| XTEP International Holdings Ltd ($1368) | -1.8x | -2.4x | -1.7x | -2.2x | -1.4x |
