Top Form International Ltd reports 64.1% CAPEX growth in 2020 and 0.92% Revenue growth
15/09/2020 • About Top Form International Ltd (
$333) • By InTwits
Top Form International Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -2.2%
- EBITDA Margin is quite volatile: -2.2% in FY2020, -3.4% in FY2019, 2.7% in FY2018, 2.1% in FY2017, 4.8% in FY2016
- Top Form International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's in pair with industry average of 4.4%
- CAPEX is quite volatile: 68 HKDm in FY2020, 41 HKDm in FY2019, 32 HKDm in FY2018, 34 HKDm in FY2017, 13 HKDm in FY2016
- The company has unprofitable business model: ROIC is -12.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.2x while industry average is -5.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 0.92%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 19.0 pp from -27.6% to -46.6% in FY2020. EBITDA Margin followed a declining trend at -2.0 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.6 pp from 16.2% to 14.6% in FY2020. Gross Margin declined at -0.86 pp per annum in FY2016-FY2020. SG&A as a % of Revenue decreased slightly on 0.96 pp from 22.4% to 21.4% in FY2020.
Net Income margin decreased slightly on 1.2 pp from -5.0% to -6.2% in FY2020. Net Income margin declined at -2.3 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 5.5%. The company showed CAPEX/Revenue growth of 2.5 pp from 3.0% in FY2017 to 5.5% in FY2020. It's average level of CAPEX/Revenue for the last three years was 3.8%. CAPEX as a % of Revenue followed a growing trend at 0.91 pp per annum in FY2016-FY2020.
Return on investment
The company operates at negative ROIC (-12.3%) and ROE (-16.4%). ROIC showed almost no change in FY2020. ROE decreased on 4.8 pp from -11.6% to -16.4% in FY2020. ROIC stuck to a declining trend at -4.9 pp per annum in FY2016-FY2020. ROE stuck to a declining trend at -5.7 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt surged on 201,967% while cash surged on 29.0%.
Top Form International Ltd has no short term refinancing risk: cash is higher than short term debt (109.9%).
Financial and operational results
FY ended 30/06/2020
Top Form International Ltd ($333) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,179 | 1,126 | 1,281 | 1,225 | 1,237 | 0.9% |
| Gross Profit | 211 | 205 | 230 | 198 | 180 | -9.0% |
| SG&A | 173 | 219 | 224 | 274 | 265 | -3.4% |
| EBITDA | 56 | 24 | 34 | -41 | -28 | |
| Net Income | 32 | 5 | 13 | -61 | -77 | |
Balance Sheet
|
|---|
| Cash | 167 | 133 | 103 | 95 | 123 | 29.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 112 | 169,351.5% |
| Long Term Debt | 0 | 0 | 0 | 0 | 22 | |
Cash flow
|
|---|
| Capex | 13 | 34 | 32 | 41 | 68 | 64.1% |
Ratios
|
|---|
| Revenue growth | 0.7% | -4.5% | 13.8% | -4.3% | 0.9% | |
| EBITDA growth | -11.6% | -57.4% | 43.0% | -221.0% | -32.9% | |
|
|---|
| Gross Margin | 17.9% | 18.2% | 17.9% | 16.2% | 14.6% | -1.6% |
| EBITDA Margin | 4.8% | 2.1% | 2.7% | -3.4% | -2.2% | 1.1% |
| SG&A, % of revenue | 14.7% | 19.5% | 17.5% | 22.4% | 21.4% | -1.0% |
| Net Income Margin | 2.7% | 0.5% | 1.0% | -5.0% | -6.2% | -1.2% |
| CAPEX, % of revenue | 1.1% | 3.0% | 2.5% | 3.4% | 5.5% | 2.1% |
|
|---|
| ROIC | 5.8% | 0.6% | 1.9% | -12.3% | -12.3% | -0.1% |
| ROE | 5.8% | 1.0% | 2.4% | -11.6% | -16.4% | -4.8% |
| Net Debt/EBITDA | -3.0x | -5.6x | -3.0x | | |
Peers in Apparel
Below we provide Top Form International Ltd benchmarking against other companies in Apparel 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | -16.1% | -32.4% | 20.3% | 5.9% | - |
| Odella Leather Holdings Ltd ($8093) | -31.8% | 11.4% | 746.4% | -48.6% | - |
| |
|---|
| Median (2 companies) | -7.6% | -10.5% | 383.3% | -21.3% | - |
|---|
| Top Form International Ltd ($333) | - | -4.5% | 13.8% | -4.3% | 0.9% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | 27.0% | 27.0% | 27.6% | 28.5% | - |
| Odella Leather Holdings Ltd ($8093) | 37.1% | 38.7% | 48.8% | 15.0% | - |
| |
|---|
| Median (2 companies) | 19.7% | 32.8% | 38.2% | 21.7% | - |
|---|
| Top Form International Ltd ($333) | 17.9% | 18.2% | 17.9% | 16.2% | 14.6% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | 14.6% | 14.1% | 14.1% | 8.9% | - |
| Odella Leather Holdings Ltd ($8093) | 7.2% | -1.1% | 40.4% | -13.0% | - |
| |
|---|
| Median (2 companies) | 5.3% | 6.5% | 27.3% | -2.0% | - |
|---|
| Top Form International Ltd ($333) | 4.8% | 2.1% | 2.7% | -3.4% | -2.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | 0.9% | 1.2% | 1.0% | 0.6% | - |
| Odella Leather Holdings Ltd ($8093) | 0.6% | 1.3% | 0.9% | 0.4% | - |
| |
|---|
| Median (2 companies) | 2.1% | 1.3% | 0.9% | 0.5% | - |
|---|
| Top Form International Ltd ($333) | 1.1% | 3.0% | 2.5% | 3.4% | 5.5% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | 16.4% | 10.5% | 13.1% | 7.6% | - |
| Odella Leather Holdings Ltd ($8093) | 6.2% | -1.5% | 127.8% | -14.6% | - |
| |
|---|
| Median (2 companies) | 1.4% | 4.5% | 70.5% | -3.5% | - |
|---|
| Top Form International Ltd ($333) | 5.8% | 0.6% | 1.9% | -12.3% | -12.3% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Sitoy Group Holdings Ltd ($1023) | -2.0x | -2.2x | -1.4x | -1.1x | - |
| |
|---|
| Median (1 company) | -0.6x | -2.2x | -1.0x | -1.1x | - |
|---|
