Sitoy Group Holdings Ltd reports 206% Net Income decline in 2020 and 9.0 pp EBITDA Margin decline from 8.9% to -0.12%
28/09/2020 • About Sitoy Group Holdings Ltd (
$1023) • By InTwits
Sitoy Group Holdings Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Sitoy Group Holdings Ltd is a company in decline: FY2020 revenue growth was -25.9%, 5 years revenue CAGR was -11.8%
- EBITDA Margin is quite volatile: -0.1% in FY2020, 8.9% in FY2019, 14.1% in FY2018, 14.1% in FY2017, 14.6% in FY2016
- Sitoy Group Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has unprofitable business model: ROIC is -4.6%
- It operates with high leverage: Net Debt/EBITDA is 11.2x while industry average is -5.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sitoy Group Holdings Ltd's Revenue dropped on 25.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.4 pp from 12.0% to 18.4% in FY2020. EBITDA Margin declined at -3.5 pp per annum in the last 5 years.
Gross Margin decreased on 4.2 pp from 28.5% to 24.3% in FY2020. SG&A as a % of Revenue increased on 5.5 pp from 24.0% to 29.5% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 3.6 pp per annum in the last 5 years.
Net Income margin dropped on 12.5 pp from 5.1% to -7.3% in FY2020. Net Income margin stuck to a declining trend at -4.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.1% in FY2020. Sitoy Group Holdings Ltd showed almost no change in CAPEX/Revenue from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 0.88%.
Return on investment
The company operates at negative ROIC (-4.6%) and ROE (-6.8%). ROIC dropped on 12.2 pp from 7.6% to -4.6% in FY2020. ROE dropped on 12.7 pp from 5.9% to -6.8% in FY2020. ROIC followed a declining trend at -4.5 pp per annum in the last 5 years. ROE declined at -5.2 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 11.2x Net Debt / EBITDA and Debt / EBITDA. Debt surged on 108% while cash jumped on 27.3%.
Sitoy Group Holdings Ltd has no short term refinancing risk: cash is higher than short term debt (202.3%).
Financial and operational results
FY ended 30/06/2020
Sitoy Group Holdings Ltd ($1023) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,837 | 1,917 | 2,306 | 2,441 | 1,809 | -25.9% |
| Gross Profit | 767 | 518 | 637 | 695 | 439 | -36.9% |
| SG&A | 408 | 342 | 421 | 587 | 534 | -9.1% |
| EBITDA | 415 | 271 | 326 | 218 | -2 | -101.0% |
| Net Income | 370 | 211 | 257 | 126 | -133 | -205.8% |
Balance Sheet
|
|---|
| Cash | 831 | 596 | 448 | 407 | 518 | 27.3% |
| Short Term Debt | 0 | 0 | 0 | 166 | 256 | 53.9% |
| Long Term Debt | 0 | 0 | 0 | 0 | 90 | |
Cash flow
|
|---|
| Capex | 25 | 24 | 22 | 15 | 19 | 34.1% |
Ratios
|
|---|
| Revenue growth | -16.1% | -32.4% | 20.3% | 5.9% | -25.9% | |
| EBITDA growth | -21.3% | -34.8% | 20.5% | -33.2% | -101.0% | |
|
|---|
| Gross Margin | 27.0% | 27.0% | 27.6% | 28.5% | 24.3% | -4.2% |
| EBITDA Margin | 14.6% | 14.1% | 14.1% | 8.9% | -0.1% | -9.0% |
| SG&A, % of revenue | 14.4% | 17.8% | 18.3% | 24.0% | 29.5% | 5.5% |
| Net Income Margin | 13.0% | 11.0% | 11.1% | 5.1% | -7.3% | -12.5% |
| CAPEX, % of revenue | 0.9% | 1.2% | 1.0% | 0.6% | 1.1% | 0.5% |
|
|---|
| ROIC | 16.4% | 10.5% | 13.1% | 7.6% | -4.6% | -12.2% |
| ROE | 17.2% | 10.0% | 12.0% | 5.9% | -6.8% | -12.7% |
| Net Debt/EBITDA | -2.0x | -2.2x | -1.4x | -1.1x | |
Peers in Apparel
Below you can find Sitoy Group Holdings Ltd benchmarking vs. other companies in Apparel 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Top Form International Ltd ($333) | - | -4.5% | 13.8% | -4.3% | 0.9% |
| Odella Leather Holdings Ltd ($8093) | -31.8% | 11.4% | 746.4% | -48.6% | - |
| |
|---|
| Median (2 companies) | -6.3% | 3.4% | 380.1% | -26.5% | 0.9% |
|---|
| Sitoy Group Holdings Ltd ($1023) | - | -32.4% | 20.3% | 5.9% | -25.9% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Top Form International Ltd ($333) | 17.9% | 18.2% | 17.9% | 16.2% | 14.6% |
| Odella Leather Holdings Ltd ($8093) | 37.1% | 38.7% | 48.8% | 15.0% | - |
| |
|---|
| Median (2 companies) | 19.1% | 28.4% | 33.4% | 15.6% | 14.6% |
|---|
| Sitoy Group Holdings Ltd ($1023) | 27.0% | 27.0% | 27.6% | 28.5% | 24.3% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Top Form International Ltd ($333) | 4.8% | 2.1% | 2.7% | -3.4% | -2.2% |
| Odella Leather Holdings Ltd ($8093) | 7.2% | -1.1% | 40.4% | -13.0% | - |
| |
|---|
| Median (2 companies) | 4.0% | 0.5% | 21.5% | -8.2% | -2.2% |
|---|
| Sitoy Group Holdings Ltd ($1023) | 14.6% | 14.1% | 14.1% | 8.9% | -0.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Top Form International Ltd ($333) | 1.1% | 3.0% | 2.5% | 3.4% | 5.5% |
| Odella Leather Holdings Ltd ($8093) | 0.6% | 1.3% | 0.9% | 0.4% | - |
| |
|---|
| Median (2 companies) | 2.1% | 2.2% | 1.7% | 1.9% | 5.5% |
|---|
| Sitoy Group Holdings Ltd ($1023) | 0.9% | 1.2% | 1.0% | 0.6% | 1.1% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Top Form International Ltd ($333) | 5.8% | 0.6% | 1.9% | -12.3% | -12.3% |
| Odella Leather Holdings Ltd ($8093) | 6.2% | -1.5% | 127.8% | -14.6% | - |
| |
|---|
| Median (2 companies) | 1.4% | -0.5% | 64.9% | -13.4% | -12.3% |
|---|
| Sitoy Group Holdings Ltd ($1023) | 16.4% | 10.5% | 13.1% | 7.6% | -4.6% |
