We assign a fundamental rating of 5 out of 10 to VIPS. VIPS was compared to 30 industry peers in the Broadline Retail industry. While VIPS belongs to the best of the industry regarding profitability, there are concerns on its financial health. VIPS has a valuation in line with the averages, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year VIPS was profitable.
In the past 5 years VIPS has always been profitable.
In the past 5 years VIPS always reported a positive cash flow from operatings.

1.2 Ratios

VIPS's Return On Assets of 9.06% is amongst the best of the industry. VIPS outperforms 86.67% of its industry peers.
VIPS has a better Return On Equity (17.57%) than 80.00% of its industry peers.
VIPS's Return On Invested Capital of 11.60% is fine compared to the rest of the industry. VIPS outperforms 76.67% of its industry peers.
VIPS had an Average Return On Invested Capital over the past 3 years of 15.04%. This is significantly above the industry average of 9.28%.

		Industry Rank	Sector Rank
ROA	9.06%
ROE	17.57%
ROIC	11.6%

ROA(3y)10.39%

ROA(5y)9.74%

ROE(3y)20.19%

ROE(5y)19.13%

ROIC(3y)15.04%

ROIC(5y)14.09%

1.3 Margins

VIPS has a Profit Margin of 6.66%. This is in the better half of the industry: VIPS outperforms 70.00% of its industry peers.
In the last couple of years the Profit Margin of VIPS has grown nicely.
VIPS's Operating Margin of 7.58% is fine compared to the rest of the industry. VIPS outperforms 66.67% of its industry peers.
VIPS's Operating Margin has improved in the last couple of years.
VIPS has a worse Gross Margin (23.13%) than 90.00% of its industry peers.
VIPS's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	7.58%
PM (TTM)	6.66%
GM	23.13%

OM growth 3Y21.06%

OM growth 5Y9.26%

PM growth 3Y21.31%

PM growth 5Y10.57%

GM growth 3Y5.97%

GM growth 5Y1.1%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

VIPS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
VIPS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for VIPS has been reduced compared to 5 years ago.
VIPS has a worse debt/assets ratio than last year.

2.2 Solvency

A Debt/Equity ratio of 0.19 indicates that VIPS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.19, VIPS is in the better half of the industry, outperforming 70.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.19
Debt/FCF	N/A
Altman-Z	N/A

ROIC/WACC1.54

WACC7.55%

2.3 Liquidity

VIPS has a Current Ratio of 1.30. This is a normal value and indicates that VIPS is financially healthy and should not expect problems in meeting its short term obligations.
VIPS has a Current ratio of 1.30. This is in the lower half of the industry: VIPS underperforms 63.33% of its industry peers.
A Quick Ratio of 1.15 indicates that VIPS should not have too much problems paying its short term obligations.
VIPS's Quick ratio of 1.15 is in line compared to the rest of the industry. VIPS outperforms 43.33% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.3
Quick Ratio	1.15

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 2.02% over the past year.
The Earnings Per Share has been growing by 17.77% on average over the past years. This is quite good.
The Revenue has decreased by -2.91% in the past year.
Measured over the past years, VIPS shows a small growth in Revenue. The Revenue has been growing by 3.12% on average per year.

EPS 1Y (TTM)2.02%

EPS 3Y24.62%

EPS 5Y17.77%

EPS Q2Q%20.65%

Revenue 1Y (TTM)-2.91%

Revenue growth 3Y-2.52%

Revenue growth 5Y3.12%

Sales Q2Q%3.36%

3.2 Future

Based on estimates for the next years, VIPS will show a small growth in Earnings Per Share. The EPS will grow by 7.95% on average per year.
VIPS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.86% yearly.

EPS Next Y2.52%

EPS Next 2Y4.71%

EPS Next 3Y5.21%

EPS Next 5Y7.95%

Revenue Next Year-0.3%

Revenue Next 2Y1%

Revenue Next 3Y1.47%

Revenue Next 5Y0.86%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 6.93 indicates a rather cheap valuation of VIPS.
VIPS's Price/Earnings ratio is rather cheap when compared to the industry. VIPS is cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of VIPS to the average of the S&P500 Index (28.32), we can say VIPS is valued rather cheaply.
VIPS is valuated cheaply with a Price/Forward Earnings ratio of 6.48.
96.67% of the companies in the same industry are more expensive than VIPS, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of VIPS to the average of the S&P500 Index (25.57), we can say VIPS is valued rather cheaply.

		Industry Rank	Sector Rank
PE	6.93
Fwd PE	6.48

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VIPS is valued cheaper than 100.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	2.54

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
VIPS has a very decent profitability rating, which may justify a higher PE ratio.

PEG (NY)2.75

PEG (5Y)0.39

EPS Next 2Y4.71%

EPS Next 3Y5.21%

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5. Dividend

5.1 Amount

VIPS has a Yearly Dividend Yield of 2.63%. Purely for dividend investing, there may be better candidates out there.
VIPS's Dividend Yield is rather good when compared to the industry average which is at 2.38. VIPS pays more dividend than 83.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.83, VIPS pays a bit more dividend than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	2.63%

5.2 History

VIPS is new to the dividend game and has less than 3 years of track record.

Dividend Growth(5Y)N/A

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

23.73% of the earnings are spent on dividend by VIPS. This is a low number and sustainable payout ratio.

DP23.73%

EPS Next 2Y4.71%

EPS Next 3Y5.21%

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VIPSHOP HOLDINGS LTD - ADR / VIPS FAQ

What is the ChartMill fundamental rating of VIPSHOP HOLDINGS LTD - ADR (VIPS) stock?

ChartMill assigns a fundamental rating of 5 / 10 to VIPS.

Can you provide the valuation status for VIPSHOP HOLDINGS LTD - ADR?

ChartMill assigns a valuation rating of 6 / 10 to VIPSHOP HOLDINGS LTD - ADR (VIPS). This can be considered as Fairly Valued.

How profitable is VIPSHOP HOLDINGS LTD - ADR (VIPS) stock?

VIPSHOP HOLDINGS LTD - ADR (VIPS) has a profitability rating of 7 / 10.

How financially healthy is VIPSHOP HOLDINGS LTD - ADR?

The financial health rating of VIPSHOP HOLDINGS LTD - ADR (VIPS) is 3 / 10.

How sustainable is the dividend of VIPSHOP HOLDINGS LTD - ADR (VIPS) stock?

The dividend rating of VIPSHOP HOLDINGS LTD - ADR (VIPS) is 4 / 10 and the dividend payout ratio is 23.73%.