Sun Art Retail Group Ltd EBITDA increased on 8.4% and Revenue increased slightly on 1.9%
04/03/2018 • About Sun Art Retail Group Ltd (
$6808) • By InTwits
Sun Art Retail Group Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 7.2% in 2017 vs. 6.8% in 2016 vs. 7.0% in 2013
- Sun Art Retail Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 4.3%.
- CAPEX is quite volatile: 2,509 in 2017, 3,579 in 2016, 4,837 in 2015, 5,471 in 2014, 6,839 in 2013
- The company has highly profitable business model: ROIC is at 17.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Art Retail Group Ltd ($6808) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 86,195 | 91,855 | 96,414 | 100,441 | 102,320 | 1.9% |
| Gross Profit | 18,613 | 20,998 | 22,463 | 23,981 | 24,674 | 2.9% |
| SG&A | 1,966 | 2,388 | 2,633 | 2,876 | 2,895 | 0.7% |
| EBITDA | 6,030 | 6,549 | 6,269 | 6,832 | 7,403 | 8.4% |
| Net Income | 2,775 | 2,899 | 2,443 | 2,571 | 2,793 | 8.6% |
Balance Sheet
|
|---|
| Cash | 6,271 | 6,269 | 6,582 | 8,100 | 10,362 | 27.9% |
| Short Term Debt | 391 | 905 | 638 | 23 | 2 | -91.3% |
| Long Term Debt | 0 | 5 | 2 | 3 | 1 | -66.7% |
Cash flow
|
|---|
| Capex | 6,839 | 5,471 | 4,837 | 3,579 | 2,509 | -29.9% |
Ratios
|
|---|
| Revenue growth | 10.7% | 6.6% | 5.0% | 4.2% | 1.9% | |
| EBITDA growth | 16.3% | 8.6% | -4.3% | 9.0% | 8.4% | |
| Gross Margin | 21.6% | 22.9% | 23.3% | 23.9% | 24.1% | 0.2% |
| EBITDA Margin | 7.0% | 7.1% | 6.5% | 6.8% | 7.2% | 0.4% |
| Net Income Margin | 3.2% | 3.2% | 2.5% | 2.6% | 2.7% | 0.2% |
| SG&A, % of revenue | 2.3% | 2.6% | 2.7% | 2.9% | 2.8% | -0.0% |
| CAPEX, % of revenue | 7.9% | 6.0% | 5.0% | 3.6% | 2.5% | -1.1% |
| ROIC | 20.0% | 18.9% | 15.0% | 16.1% | 17.7% | 1.5% |
| ROE | 15.6% | 15.1% | 12.1% | 12.1% | 12.7% | 0.6% |
| Net Debt/EBITDA | -1.0x | -0.8x | -0.9x | -1.2x | -1.4x | -0.2x |
Sun Art Retail Group Ltd ($6808) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 31,617 | 22,463 | 24,950 | 23,290 | 2.0% | 2.4% | 2.4% | 0.7% |
| Net Income | 1,041 | 716 | 558 | 478 | 1.5% | 76.4% | -6.8% | -11.5% |
Balance Sheet
|
|---|
Ratios
|
|---|
| Net Income Margin | 3.3% | 3.2% | 2.2% | 2.1% | -0.0% | 1.3% | -0.2% | -0.3% |
Revenue and profitability
Sun Art Retail Group Ltd's Revenue increased slightly on 1.9%. Revenue growth showed slow down in 17Q4 - it was 0.7% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Gross Margin showed almost no change in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
Sun Art Retail Group Ltd's CAPEX/Revenue was 2.5% in 2017. Sun Art Retail Group Ltd showed decline in CAPEX/Revenue of 3.5 pp from 6.0% in 2014 to 2.5% in 2017. Average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at good ROIC (17.66%) and ROE (12.67%). ROIC increased slightly on 1.5 pp from 16.1% to 17.7% in 2017. ROE increased slightly on 0.58 pp from 12.1% to 12.7% in 2017.
Leverage (Debt)
Debt level is -1.4x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -1.2x to -1.4x in 2017. Debt dropped on 88.5% while cash jumped on 27.9%.
Appendix 1: Peers in Retail
Below we provide Sun Art Retail Group 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Theme International Holdings Ltd ($990) | -2.8% | -11.2% | -29.0% | 2,774.0% | |
| Viva China Holdings Ltd ($8032) | 83.5% | -11.0% | 32.3% | 274.7% | |
| Noble House China Holdings Ltd ($8246) | -20.2% | -24.8% | 117.2% | 129.1% | |
| Maoye International Holdings Ltd ($848) | 7.4% | -6.7% | -7.5% | 77.9% | |
| JC Group Holdings Ltd ($8326) | -5.5% | -3.0% | 6.7% | 58.1% | |
| |
|---|
| Median (84 companies) | 6.3% | 2.9% | -1.0% | -4.1% | 4.2% |
|---|
| Sun Art Retail Group Ltd ($6808) | | 6.6% | 5.0% | 4.2% | 1.9% |
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Vongroup Ltd ($318) | | 95.1% | 99.1% | 99.0% | |
| Modern Beauty Salon Holdings Ltd ($919) | 95.9% | 96.8% | 96.7% | 96.8% | |
| Moiselle International Holdings Ltd ($130) | 83.8% | 80.6% | 83.2% | 77.6% | |
| Tsui Wah Holdings Ltd ($1314) | 69.4% | 69.3% | 69.6% | 71.3% | |
| Trinity Ltd ($891) | 75.5% | 74.1% | 72.4% | 68.3% | |
| |
|---|
| Median (55 companies) | 36.4% | 35.5% | 33.9% | 43.2% | 48.8% |
|---|
| Sun Art Retail Group Ltd ($6808) | 21.6% | 22.9% | 23.3% | 23.9% | 24.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 58.3% | 41.4% | 61.6% | |
| Lifestyle International Holdings Ltd ($1212) | 47.0% | 44.7% | 43.4% | 46.3% | |
| Noble House China Holdings Ltd ($8246) | -23.3% | -37.4% | 20.4% | 37.6% | |
| Intime Retail Group Co Ltd ($1833) | 55.4% | 36.2% | 35.7% | 36.1% | |
| ANTA Sports Products Ltd ($2020) | 23.3% | 24.4% | 25.9% | 25.7% | |
| |
|---|
| Median (62 companies) | 7.8% | 9.1% | 7.4% | 6.7% | 11.5% |
|---|
| Sun Art Retail Group Ltd ($6808) | 7.0% | 7.1% | 6.5% | 6.8% | 7.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Artini China Co Ltd ($789) | 0.7% | 3.4% | 2.7% | 51.3% | |
| Coach Inc ($6388) | 4.8% | 4.6% | 4.8% | 8.8% | |
| Tsui Wah Holdings Ltd ($1314) | 9.3% | 30.5% | 10.6% | 8.5% | |
| Starbucks Corp ($4337) | 7.7% | 7.1% | 6.8% | 6.8% | |
| Li Ning Co Ltd ($2331) | 2.8% | 4.0% | 4.4% | 5.9% | |
| |
|---|
| Median (46 companies) | 3.6% | 3.7% | 3.1% | 2.0% | 1.8% |
|---|
| Sun Art Retail Group Ltd ($6808) | 7.9% | 6.0% | 5.0% | 3.6% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| JC Group Holdings Ltd ($8326) | 215.6% | 92.8% | 66.3% | 81.7% | |
| Noble House China Holdings Ltd ($8246) | -67.7% | -113.8% | 35.6% | 68.8% | |
| Starbucks Corp ($4337) | -6.0% | 52.8% | 51.4% | 46.2% | |
| Fairwood Holdings Ltd ($52) | 29.1% | 28.6% | 32.1% | 36.4% | |
| ANTA Sports Products Ltd ($2020) | 19.2% | 22.8% | 27.0% | 30.0% | |
| |
|---|
| Median (84 companies) | 8.8% | 8.5% | 5.8% | 6.3% | 18.3% |
|---|
| Sun Art Retail Group Ltd ($6808) | 20.0% | 18.9% | 15.0% | 16.1% | 17.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Combest Holdings Ltd ($8190) | -1.1x | -2.2x | | 37.8x | |
| KTL International Holdings Group Ltd ($442) | 4.0x | 2.6x | 3.1x | 13.7x | |
| Stelux Holdings International Ltd ($84) | 1.0x | 1.0x | 1.5x | 12.5x | |
| Parkson Retail Group Ltd ($3368) | 2.3x | 3.6x | 9.8x | 11.1x | |
| Sparkle Roll Group Ltd ($970) | 4.0x | 9.3x | 23.5x | 8.5x | |
| |
|---|
| Median (44 companies) | -0.5x | -0.2x | -0.5x | -0.4x | -1.9x |
|---|
| Sun Art Retail Group Ltd ($6808) | -1.0x | -0.8x | -0.9x | -1.2x | -1.4x |
