Zhongsheng Group Holdings Ltd reports 73.4% EBITDA growth and 21.1% Revenue growth
20/03/2017 • About Zhongsheng Group Holdings Ltd (
$881) • By InTwits
Zhongsheng Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zhongsheng Group Holdings Ltd is a growth stock: FY2016 revenue growth was 21.1%, 5 year revenue CAGR was 11.3% at FY2016 ROIC 11.7%
- The company has business model with average profitability: ROIC is at 11.7%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is 0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhongsheng Group Holdings Ltd ($881) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 50,048 | 52,527 | 54,787 | 59,143 | 71,599 | 21.1% |
| Gross Profit | 4,284 | 4,761 | 4,775 | 4,669 | 6,552 | 40.3% |
| SG&A | 2,790 | 3,060 | 3,355 | 3,763 | 3,985 | 5.9% |
| EBITDA | 2,635 | 3,011 | 3,005 | 2,752 | 4,770 | 73.4% |
| Net Income | 750 | 1,010 | 751 | 461 | 1,860 | 303.6% |
Balance Sheet
|
|---|
| Cash | 4,285 | 3,850 | 4,290 | 4,675 | 4,477 | -4.2% |
| Short Term Debt | 14,374 | 16,764 | 16,881 | 14,785 | 16,135 | 9.1% |
| Long Term Debt | 1,947 | 558 | 3,432 | 4,476 | 1,893 | -57.7% |
Cash flow
|
|---|
| Capex | 1,817 | 2,249 | 2,120 | 1,782 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 19.4% | 5.0% | 4.3% | 8.0% | 21.1% | |
| EBITDA growth | -13.8% | 14.3% | -0.2% | -8.4% | 73.4% | |
| Gross Margin | 8.6% | 9.1% | 8.7% | 7.9% | 9.2% | 1.3% |
| EBITDA Margin | 5.3% | 5.7% | 5.5% | 4.7% | 6.7% | 2.0% |
| Net Income Margin | 1.5% | 1.9% | 1.4% | 0.8% | 2.6% | 1.8% |
| SG&A, % of revenue | 5.6% | 5.8% | 6.1% | 6.4% | 5.6% | -0.8% |
| CAPEX, % of revenue | 3.6% | 4.3% | 3.9% | 3.0% | | -3.0% |
| ROIC | 9.1% | 8.8% | 7.4% | 5.8% | 11.7% | 5.9% |
| ROE | 10.3% | 12.7% | 7.7% | 4.1% | 15.8% | 11.7% |
| Net Debt/EBITDA | 4.6x | 4.5x | 5.3x | 5.3x | 2.8x | -2.5x |
Revenue and profitability
Zhongsheng Group Holdings Ltd's Revenue jumped on 21.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.2 pp from 11.9% to 20.1% in 2016.
Gross Margin increased slightly on 1.3 pp from 7.9% to 9.2% in FY2016. SG&A as a % of Revenue decreased slightly on 0.80 pp from 6.4% to 5.6% in FY2016.
Net Income marign increased slightly on 1.8 pp from 0.78% to 2.6% in FY2016.
Return on investment
The company operates at good ROE (15.84%) while ROIC is low (11.66%). ROIC increased on 5.9 pp from 5.8% to 11.7% in FY2016. ROE surged on 11.7 pp from 4.1% to 15.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.8x and Debt / EBITDA is 3.8x. Net Debt / EBITDA dropped on 2.5x from 5.3x to 2.8x in FY2016. Debt decreased on 6.4% while cash decreased on 4.2%.
Appendix 1: Peers in Retail
Below you can find Zhongsheng Group Holdings Ltd benchmarking vs. other companies in Retail 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 |
|---|
| 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) | 9.7% | 6.5% | 2.9% | -1.0% | -5.8% |
|---|
| Zhongsheng Group Holdings Ltd ($881) | | 5.0% | 4.3% | 8.0% | 21.1% |
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) | 37.2% | 36.4% | 35.5% | 33.9% | 45.1% |
|---|
| Zhongsheng Group Holdings Ltd ($881) | 8.6% | 9.1% | 8.7% | 7.9% | 9.2% |
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) | 10.8% | 7.8% | 9.1% | 7.4% | 6.8% |
|---|
| Zhongsheng Group Holdings Ltd ($881) | 5.3% | 5.7% | 5.5% | 4.7% | 6.7% |
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% | 3.7% | 3.5% | 2.1% |
|---|
| Zhongsheng Group Holdings Ltd ($881) | 3.6% | 4.3% | 3.9% | 3.0% | |
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) | 12.3% | 8.9% | 8.7% | 5.8% | 5.7% |
|---|
| Zhongsheng Group Holdings Ltd ($881) | 9.1% | 8.8% | 7.4% | 5.8% | 11.7% |
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 | -0.6x | -0.2x | -0.5x | -0.6x |
|---|
| Zhongsheng Group Holdings Ltd ($881) | 4.6x | 4.5x | 5.3x | 5.3x | 2.8x |
