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Looking for a growth stock? Pay attention to China Medical System Holdings Ltd

30/03/2017 • About China Medical System Holdings Ltd ($867) • By InTwits

Pay attention to China Medical System Holdings Ltd as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


China Medical System Holdings Ltd showed growth in the last financial year. The company's revenue surged on 37.9% in FY2016. Together with revenue growth China Medical System Holdings Ltd also managed to keep EBITDA growth. EBITDA grew 39.4% for the same period.

In the longer period the company showed fast revenue growth of 29.6% from FY2013 to FY2016 annualy. EBITDA surged on 30.0% from FY2013 to FY2016 annualy.

China Medical System Holdings Ltd ($867) financials for the last 5 years

mln. CNY FY2012 FY2013 FY2014 FY2015 FY2016
Revenue1,7792,2492,9453,5534,901
Revenue growth, %26.5%31.0%20.7%37.9%
Gross margin, %58.8%54.5%56.2%57.6%59.4%
SG&A, %27.1%27.3%26.6%28.3%28.5%
EBITDA6147291,1601,1481,601
EBITDA growth, %18.6%59.2%-1.0%39.4%
EBITDA margin, %34.5%32.4%39.4%32.3%32.7%
Net Income5376361,0469961,376
Net Income margin, % 30.2%28.3%35.5%28.0%28.1%
 
CAPEX3614865430
CAPEX/Revenue, %2.04%6.57%2.22%1.22%0%
Debt4043144844641,612
Cash668488244509482
Net Debt/EBITDA-0.4x-0.2x0.2x-0.0x0.7x
 
ROIC, %19.4%20.2%27.4%20.5%20.5%
ROE, %20.3%21.0%28.8%21.4%23.9%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. China Medical System Holdings Ltd's EBITDA margin increased slightly on 0.400 pp from 32.3% to 32.7% in FY2016. In the longer period China Medical System Holdings Ltd's EBITDA margin increased slightly on 0.300 pp from 32.4% in FY2013 to 32.7% in FY2016.

China Medical System Holdings Ltd shows attractive ROIC at 20.5% for the last 12 months which assumes stable development model. During the last three years it increased slightly - it was 20.2% in FY2013. It's average level of ROIC for the last three years was 22.8%.

Net Income margin showed almost no change on 0.100 pp from 28% to 28.1% in FY2016. If we look for the longer period China Medical System Holdings Ltd's Net Income margin decreased slightly on 0.200 pp from 28.3% in FY2013 to 28.1% in FY2016.

China Medical System Holdings Ltd operates at ROE of 23.9%. It's average level of ROE for the last three years was 24.7%.

Capital expenditures (CAPEX)


In FY2016 the company had CAPEX/Revenue of 0%. The company's CAPEX/Revenue dropped on 6.57 pp from 6.57% in FY2013 to 0% in FY2016.

Leverage (Debt)


Having such a fast growth profile the company keeps low debt level at 0.7x Net Debt/EBITDA. If we look for the longer period China Medical System Holdings Ltd's leverage surged on 0.94x from -0.24x in FY2013 to 0.71x in FY2016.

Management team


Lam Kong runs China Medical System Holdings Ltd as a CEO and Chen Yanling is a CFO.

Peers in Healthcare-Products


Below we provide China Medical System Holdings Ltd benchmarking against other companies in Healthcare-Products 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Vitop Bioenergy Holdings Ltd ($1178)-3.2%-27.3%92.4%281.7%
Beijing Chunlizhengda Medical Instruments Co Ltd ($1858)22.2%12.8%21.8%32.0%
Shandong Weigao Group Medical Polymer Co Ltd ($1066)25.1%14.4%12.1%13.7%
BBI Life Sciences Corp ($1035)16.4%18.0%15.1%11.5%
Lifetech Scientific Corp ($1302)29.3%27.3%22.4%10.2%
 
Median (16 companies)19.3%12.2%10.8%5.2%-2.7%
China Medical System Holdings Ltd ($867)26.5%31.0%20.7%37.9%


Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Lifetech Scientific Corp ($1302)80.1%81.6%81.4%81.1%
PW Medtech Group Ltd ($1358)66.0%67.9%72.8%75.1%
Golden Meditech Holdings Ltd ($801)69.1%69.8%70.2%72.8%45.8%
Beijing Chunlizhengda Medical Instruments Co Ltd ($1858)71.6%72.1%73.8%68.6%
Microport Scientific Corp ($853)83.6%81.0%68.5%67.2%
 
Median (16 companies)50.0%50.8%48.2%47.8%32.8%
China Medical System Holdings Ltd ($867)58.8%54.5%56.2%57.6%59.4%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
PW Medtech Group Ltd ($1358)44.2%30.6%41.6%48.6%
Lifetech Scientific Corp ($1302)31.6%24.5%23.4%33.1%
Hengan International Group Co Ltd ($1044)27.4%25.3%25.3%28.0%27.4%
Shandong Weigao Group Medical Polymer Co Ltd ($1066)28.5%28.0%29.0%27.8%25.1%
BBI Life Sciences Corp ($1035)25.7%26.0%12.4%25.5%
 
Median (16 companies)22.0%22.2%12.9%9.4%7.8%
China Medical System Holdings Ltd ($867)34.5%32.4%39.4%32.3%32.7%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Lifetech Scientific Corp ($1302)0.0%16.5%0.0%70.0%
PW Medtech Group Ltd ($1358)14.8%22.3%30.2%42.1%
Arts Optical International Hldgs ($1120)14.0%4.5%14.0%29.9%
Golden Meditech Holdings Ltd ($801)12.7%51.2%27.3%26.1%56.4%
BBI Life Sciences Corp ($1035)23.6%6.7%6.4%20.0%
 
Median (16 companies)9.6%6.3%6.7%7.4%1.7%
China Medical System Holdings Ltd ($867)2.0%6.6%2.2%1.2%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Lifetech Scientific Corp ($1302)17.5%15.9%21.2%32.9%
Hengan International Group Co Ltd ($1044)19.5%14.9%14.0%16.4%15.4%
Beijing Chunlizhengda Medical Instruments Co Ltd ($1858)22.2%20.9%21.0%12.1%
Shandong Weigao Group Medical Polymer Co Ltd ($1066)10.5%11.7%12.8%11.8%10.4%
PW Medtech Group Ltd ($1358)30.7%9.2%10.0%10.7%
 
Median (16 companies)8.5%7.4%5.0%2.5%1.9%
China Medical System Holdings Ltd ($867)19.4%20.2%27.4%20.5%20.5%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Microport Scientific Corp ($853)-1.0x-2.8x4.3x
Techcomp Holdings Ltd ($1298)4.3x3.6x2.7x3.0x
Hengan International Group Co Ltd ($1044)1.4x1.7x1.8x1.7x0.2x
PW Medtech Group Ltd ($1358)-1.2x-7.5x-0.3x-1.1x
Lifetech Scientific Corp ($1302)-3.5x-2.8x-2.7x-1.1x
 
Median (11 companies)-1.2x-1.6x-1.5x-1.6x-0.8x
China Medical System Holdings Ltd ($867)-0.4x-0.2x0.2x-0.0x0.7x