New World Department Store China Ltd Debt surged on 266% while Revenue dropped on 36.6%
29/09/2020 • About New World Department Store China Ltd (
$825) • By InTwits
New World Department Store China Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- New World Department Store China Ltd is a company in decline: FY2020 revenue growth was -36.6%, 5 years revenue CAGR was -11.1%
- The company has unprofitable business model: ROIC is -2.0%
- It operates with high leverage: Net Debt/EBITDA is 11.2x while industry average is 1.1x
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 36.6%. During FY2016-FY2020 Revenue growth topped in FY2018 at 9.7% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.4 pp from 12.0% to 18.4% in FY2020.
Net Income margin dropped on 22.6 pp from 0.93% to -21.7% in FY2020.
Return on investment
The company operates at negative ROIC (-2.0%) and ROE (-9.6%). ROIC decreased on 4.5 pp from 2.5% to -2.0% in FY2020. ROE dropped on 10.2 pp from 0.55% to -9.6% in FY2020.
Leverage (Debt)
Debt level is 11.2x Net Debt / EBITDA and 14.5x Debt / EBITDA. Net Debt / EBITDA jumped on 11.4x from -0.3x to 11.2x in FY2020. Debt surged on 266% while cash dropped on 21.6%.
New World Department Store China Ltd has short term refinancing risk: cash is only 62.3% of short term debt.
Management team
Cheung Fai Yet "Philip" is a New World Department Store China Ltd's CEO. Cheung Fai Yet "Philip" has spent 1 year with the company.
Financial and operational results
FY ended 30/06/2020
New World Department Store China Ltd ($825) key annual financial indicators| mln. HKD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 3,660 | 3,484 | 3,821 | 3,519 | 2,233 | -36.6% |
| EBITDA | 573 | 553 | 411 | 421 | 411 | -2.5% |
| Net Income | 46 | 129 | 11 | 33 | -484 | -1,580.8% |
Balance Sheet
|
|---|
| Cash | 1,163 | 2,004 | 1,905 | 1,736 | 1,360 | -21.6% |
| Short Term Debt | 610 | 1,468 | 1,651 | 1,628 | 2,185 | 34.2% |
| Long Term Debt | 386 | 299 | 226 | 0 | 3,766 | |
Cash flow
|
|---|
| Capex | 202 | 170 | 148 | 116 | | |
Ratios
|
|---|
| Revenue growth | -9.2% | -4.8% | 9.7% | -7.9% | -36.6% | |
| EBITDA growth | 1.3% | -3.4% | -25.6% | 2.4% | -2.5% | |
|
|---|
| EBITDA Margin | 15.7% | 15.9% | 10.8% | 12.0% | 18.4% | 6.4% |
| Net Income Margin | 1.2% | 3.7% | 0.3% | 0.9% | -21.7% | -22.6% |
| CAPEX, % of revenue | 5.5% | 4.9% | 3.9% | 3.3% | | |
|
|---|
| ROIC | 3.3% | 3.6% | 1.9% | 2.5% | -2.0% | -4.5% |
| ROE | 0.7% | 2.2% | 0.2% | 0.5% | -9.6% | -10.2% |
| Net Debt/EBITDA | -0.3x | -0.4x | -0.1x | -0.3x | 11.2x | 11.4x |
Peers in Retail
Below we provide New World Department Store China 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Bossini International Hldg ($592) | - | -12.9% | -3.1% | -24.0% | -26.6% |
| Esprit Holdings Ltd ($330) | - | -10.4% | -3.1% | -16.3% | -28.7% |
| Jintian Pharmaceutical Group Ltd ($2211) | - | -20.7% | -1.6% | -8.1% | -37.7% |
| |
|---|
| Median (3 companies) | -3.0% | -10.4% | -2.3% | -16.3% | -28.7% |
|---|
| New World Department Store China Ltd ($825) | - | -4.8% | 9.7% | -7.9% | -36.6% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Bossini International Hldg ($592) | 47.7% | 50.7% | 52.9% | 51.5% | 48.9% |
| Esprit Holdings Ltd ($330) | 50.2% | 51.6% | 51.3% | 50.3% | 44.6% |
| Jintian Pharmaceutical Group Ltd ($2211) | 25.9% | 17.8% | 14.3% | 13.5% | 12.5% |
| |
|---|
| Median (3 companies) | 42.9% | 48.8% | 50.3% | 50.3% | 44.6% |
|---|
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Bossini International Hldg ($592) | 5.6% | 2.9% | -1.1% | -6.0% | -9.3% |
| Esprit Holdings Ltd ($330) | -0.4% | 2.7% | -11.2% | -12.3% | -21.2% |
| Jintian Pharmaceutical Group Ltd ($2211) | -0.7% | -19.3% | -31.7% | -10.6% | -30.9% |
| |
|---|
| Median (3 companies) | 6.7% | 2.9% | -6.1% | -10.6% | -21.2% |
|---|
| New World Department Store China Ltd ($825) | 15.7% | 15.9% | 10.8% | 12.0% | 18.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Bossini International Hldg ($592) | 2.4% | 0.8% | 1.2% | 1.9% | 1.8% |
| Esprit Holdings Ltd ($330) | 1.5% | 1.6% | 2.0% | 1.3% | - |
| Jintian Pharmaceutical Group Ltd ($2211) | - | 4.3% | 1.9% | 0.1% | 6.3% |
| |
|---|
| Median (3 companies) | 2.0% | 1.8% | 1.7% | 1.3% | 4.1% |
|---|
| New World Department Store China Ltd ($825) | 5.5% | 4.9% | 3.9% | 3.3% | - |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Jintian Pharmaceutical Group Ltd ($2211) | -2.4% | -21.0% | -40.8% | -15.1% | -33.3% |
| Bossini International Hldg ($592) | 7.8% | 1.5% | -5.6% | -14.7% | -45.9% |
| Esprit Holdings Ltd ($330) | -6.0% | -1.2% | -22.4% | -25.8% | -47.3% |
| |
|---|
| Median (3 companies) | 6.9% | 1.5% | -14.0% | -15.1% | -45.9% |
|---|
| New World Department Store China Ltd ($825) | 3.3% | 3.6% | 1.9% | 2.5% | -2.0% |
