VS International Group Ltd revenue decline decelerated to 25.7% in FY2020 vs. 41.8% a year earliner
24/09/2020 • About VS International Group Ltd (
$1002) • By InTwits
VS International Group Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- VS International Group Ltd is a company in decline: FY2020 revenue growth was -25.7%, 5 years revenue CAGR was -12.4%
- EBITDA Margin is quite volatile: 0.9% in FY2020, -7.9% in FY2019, 5.8% in FY2018, 8.1% in FY2017, 4.7% in FY2016
- The company has unprofitable business model: ROIC is -3.8%
- It operates with high leverage: Net Debt/EBITDA is 16.2x while industry average is 1.0x
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 dropped on 25.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.8 pp from -7.9% to 0.88% in FY2020.
Gross Margin increased on 8.1 pp from 4.4% to 12.4% in FY2020. During the last 5 years Gross Margin bottomed in FY2019 at 4.4%. SG&A as a % of Revenue decreased slightly on 1.3 pp from 14.5% to 13.2% in FY2020.
Net Income margin surged on 11.8 pp from -18.8% to -7.0% in FY2020.
Investments (CAPEX, working capital and M&A)
Inventories as a % of Revenue decreased on 2.5 pp from 7.6% to 5.1% in FY2020.
Return on investment
The company operates at negative ROIC (-3.8%) and ROE (-9.0%). ROIC surged on 11.8 pp from -15.5% to -3.8% in FY2020. ROE jumped on 18.1 pp from -27.1% to -9.0% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 16.2x and Debt / EBITDA is 40.7x. Net Debt / EBITDA jumped16.2x from to 16.2x in FY2020. Debt dropped on 17.7% while cash surged on 45.5%.
VS International Group Ltd has short term refinancing risk: cash is only 77.8% of short term debt.
Average interest expence paid by the company was 4.5% in FY2020.
Management team
Insider ownership is 12.2%. Insider ownership didn't change in 2020.
At the end of financial year the company had 935 employees. The number of employees dropped on 45.2%. Average revenue per employee in FY2020 was 515,858 HKD and it surged on 35.6%.
Financial and operational results
VS International Group Ltd ($1002) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 884 | 1,271 | 1,116 | 649 | 482 | -25.7% |
| Gross Profit | 149 | 213 | 150 | 28 | 60 | 111.4% |
| SG&A | 130 | 168 | 143 | 94 | 64 | -32.4% |
| EBITDA | 42 | 103 | 65 | -51 | 4 | |
| EBIT | | 48 | 15 | -107 | -21 | |
| Interest expence | | 13 | 12 | 13 | 8 | -37.9% |
| Tax | | 10 | -4 | 1 | 0 | -39.5% |
| Net Income | -33 | 13 | -9 | -122 | -34 | |
| Stock Based Compensation | | 11 | 4 | | | |
Balance Sheet
|
|---|
| Cash | 59 | 121 | 154 | 72 | 104 | 45.5% |
| Inventory | | 133 | 116 | 49 | 25 | -49.9% |
| Short Term Debt | 165 | 244 | 252 | 188 | 134 | -28.4% |
| Long Term Debt | 85 | 46 | 6 | 23 | 39 | 68.8% |
Cash flow
|
|---|
| Capex | 47 | 103 | 91 | 6 | | |
Ratios
|
|---|
| Revenue growth | -5.4% | 43.7% | -12.2% | -41.8% | -25.7% | |
| EBITDA growth | -27.4% | 147.3% | -37.1% | -179.4% | -108.3% | |
|
|---|
| Gross Margin | 16.9% | 16.8% | 13.4% | 4.4% | 12.4% | 8.1% |
| EBITDA Margin | 4.7% | 8.1% | 5.8% | -7.9% | 0.9% | 8.8% |
| EBIT Margin | | 3.8% | 1.3% | -16.5% | -4.4% | 12.0% |
| SG&A, % of revenue | 14.7% | 13.3% | 12.9% | 14.5% | 13.2% | -1.3% |
| SBC, % of revenue | | 0.9% | 0.4% | | |
| Net Income Margin | -3.7% | 1.1% | -0.8% | -18.8% | -7.0% | 11.8% |
| CAPEX, % of revenue | 5.4% | 8.1% | 8.2% | 1.0% | | |
|
|---|
| ROIC | -1.1% | 6.9% | 2.0% | -15.5% | -3.8% | 11.8% |
| ROE | -7.9% | 3.3% | -1.9% | -27.1% | -9.0% | 18.1% |
| Net Debt/EBITDA | 4.6x | 1.6x | 1.6x | | 16.2x |
| Interest coverage ratio (ICR) | | 3.8x | 1.3x | | |
| Interest expence / Average debt | | 4.7% | 4.3% | 5.3% | 4.5% | -0.9% |
People
|
|---|
| Insider ownership | | 12.2% | 12.2% | 12.2% | 12.2% | 0.0% |
| Employees | | 2,894 | 2,688 | 1,706 | 935 | -45.2% |
| Revenue/Employee, th. HKD | | 439 | 415 | 380 | 516 | 35.6% |
Peers in Miscellaneous Manufactur
Below we provide VS International Group Ltd benchmarking against other companies in Miscellaneous Manufactur 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 |
|---|
| Continental Holdings Ltd ($513) | -24.4% | 13.5% | -37.5% | 12.5% | - |
| Time Watch Investments Ltd ($2033) | -1.7% | 6.0% | 7.2% | -9.9% | - |
| |
|---|
| Median (2 companies) | 6.3% | 9.8% | -15.2% | 1.3% | - |
|---|
| VS International Group Ltd ($1002) | - | 43.7% | -12.2% | -41.8% | -25.7% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Time Watch Investments Ltd ($2033) | 68.5% | 66.9% | 70.2% | 70.6% | - |
| Continental Holdings Ltd ($513) | 15.7% | 17.8% | 19.8% | 24.7% | - |
| |
|---|
| Median (2 companies) | 26.0% | 42.3% | 45.0% | 47.7% | - |
|---|
| VS International Group Ltd ($1002) | 16.9% | 16.8% | 13.4% | 4.4% | 12.4% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Time Watch Investments Ltd ($2033) | 16.4% | 13.5% | 15.5% | 15.7% | - |
| Continental Holdings Ltd ($513) | -2.8% | 0.3% | 106.7% | 9.2% | - |
| |
|---|
| Median (2 companies) | 9.7% | 6.9% | 61.1% | 12.5% | - |
|---|
| VS International Group Ltd ($1002) | 4.7% | 8.1% | 5.8% | -7.9% | 0.9% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Time Watch Investments Ltd ($2033) | 3.6% | 2.9% | 3.8% | 5.2% | - |
| Continental Holdings Ltd ($513) | 3.8% | 1.7% | 4.0% | 5.1% | - |
| |
|---|
| Median (2 companies) | 3.7% | 2.3% | 3.9% | 5.1% | - |
|---|
| VS International Group Ltd ($1002) | 5.4% | 8.1% | 8.2% | 1.0% | - |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Time Watch Investments Ltd ($2033) | 18.6% | 14.2% | 16.7% | 14.4% | - |
| Continental Holdings Ltd ($513) | -0.9% | -0.3% | 14.4% | 1.1% | - |
| |
|---|
| Median (2 companies) | 9.2% | 7.0% | 15.5% | 7.7% | - |
|---|
| VS International Group Ltd ($1002) | -1.1% | 6.9% | 2.0% | -15.5% | -3.8% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Continental Holdings Ltd ($513) | - | -155.9x | -1.2x | 3.1x | - |
| Time Watch Investments Ltd ($2033) | -0.9x | -1.3x | -1.2x | -0.5x | - |
| |
|---|
| Median (2 companies) | -0.9x | -78.6x | -1.2x | 1.3x | - |
|---|
