Neptune Group Ltd demonstrated healthy growth in recent years
09/10/2014 • About Neptune Group Ltd (
$70) • By InTwits
Pay attention to Neptune Group 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
Neptune Group Ltd showed fast growth in the last financial year. The company's revenue surged on 23.0% in FY2014. In addition to revenue Neptune Group Ltd also keeps delivering EBITDA growth. It was 8.09% in FY2014
In the last 3 years the company showed fast revenue growth of 19.6% from FY2011 to FY2014 annualy. EBITDA surged on 13.6% from FY2011 to FY2014 annualy.
Neptune Group Ltd ($70) financials for the last 5 years
| mln. HKD | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 388 | 415 | 433 | 578 | 710 |
|---|
| Revenue growth, % | | 6.9% | 4.5% | 33.3% | 23.0% |
|---|
| SG&A, % | | | 1.46% | 1.84% | 1.13% |
|---|
| EBITDA | 542 | 419 | 427 | 569 | 615 |
|---|
| EBITDA growth, % | | -22.7% | 1.9% | 33.3% | 8.1% |
|---|
| EBITDA margin, % | 140% | 101% | 98.6% | 98.6% | 86.6% |
|---|
| Net Income | 67 | 201 | 283 | 288 | 149 |
|---|
| Net Income margin, % | 17.2% | 48.5% | 65.3% | 49.9% | 20.9% |
|---|
| |
| CAPEX | 0 | 1 | 0 | 57 | 0 |
|---|
| CAPEX/Revenue, % | 0% | 0.236% | 0% | 9.82% | 0.0234% |
|---|
| Debt | 115 | 21 | 0 | 23 | 21 |
|---|
| Cash | 10 | 8 | 120 | 96 | 45 |
|---|
| Net Debt/EBITDA | 0.2x | 0.0x | -0.3x | -0.1x | -0.0x |
|---|
| |
| ROIC, % | 24.9% | 22.0% | 22.8% | 23.8% | 21.1% |
|---|
| ROE, % | 6.2% | 18.3% | 21.7% | 17.7% | 7.8% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined fast from 98.6% in FY2013 to 86.6% in FY2014. In the longer period the company's EBITDA margin dropped on 14.5 pp from 101% in FY2011 to 86.6% in FY2014.
Neptune Group Ltd shows attractive ROIC at 21.1% for the last 12 months which assumes stable development model. During the last three years it decreased slightly - it was 22.0% in FY2011. Average ROIC for the last three years was 22.6%.
Net Income margin dropped on 29 pp from 49.9% to 20.9% in FY2014. If we look for the longer period Net Income margin dropped on 27.6 pp from 48.5% in FY2011 to 20.9% in FY2014.
Neptune Group Ltd operates at ROE of 7.77%. It's average level of ROE for the last three years was 15.7%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 0.0234%. CAPEX/Revenue dropped on 0.213 pp from 0.236% in FY2011 to 0.0234% in FY2014.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.0x Net Debt/EBITDA. If we look for the longer period leverage dropped on 0.07x from 0.03x in FY2011 to -0.04x in FY2014.
Valuation vs. comparable companies
At the end of trading day today Neptune Group Ltd traded at 1.4x EV/EBITDA which is 93.7% lower than 22.2x Entertainment peer group avearge calculated on the basis of 29 companies. At the end of trading day today Neptune Group Ltd traded at 5.9x P/E which is 89.2% lower than 54.7x Entertainment peer group avearge calculated on the basis of 5 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Neptune Group Ltd traded at 1.4x EV/(EBITDA-CAPEX) which is higher vs. -3.6x Entertainment peer group avearge calculated on the basis of 6 companies.
Peers in Entertainment
Below you can find Neptune Group Ltd benchmarking vs. other companies in Entertainment 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China 3D Digital Entertainment Ltd ($8078) | | -41.9% | -67.2% | 295.2% | 185.2% |
| Universe International Holdings Ltd ($1046) | | 10.2% | -42.2% | 4.3% | 159.4% |
| China Vanguard Group Ltd ($8156) | | 15.6% | -7.0% | -62.7% | 145.0% |
| Dynam Japan Holdings Co Ltd ($6889) | | 2.5% | -2.7% | -0.7% | 1.1% |
| Neway Group Holdings Ltd ($55) | | 19.2% | -2.6% | -2.6% | -4.7% |
| |
|---|
| Median (9 companies) | | 10.2% | -2.7% | 4.3% | -4.7% |
|---|
| Neptune Group Ltd ($70) | | 6.9% | 4.5% | 33.3% | 23.0% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Amax International Holdings Ltd ($959) | | | | 92.1% | 98.6% |
| China Vanguard Group Ltd ($8156) | 64.9% | 65.0% | 63.8% | 88.2% | 93.8% |
| Bingo Group Holdings Ltd ($8220) | 1.7% | 2.0% | 2.2% | 71.2% | 55.1% |
| Pegasus Entertainment Holdings Ltd ($1326) | 41.3% | 48.3% | 40.9% | 33.9% | 44.3% |
| Mei Ah Entertainment Group Ltd ($391) | 41.4% | 40.3% | 30.8% | 12.5% | 42.9% |
| |
|---|
| Median (8 companies) | 22.4% | 20.2% | 30.8% | 35.3% | 43.6% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Universe International Holdings Ltd ($1046) | 54.2% | 62.2% | 36.6% | 44.6% | 74.6% |
| China Vanguard Group Ltd ($8156) | -13.4% | 2.8% | -15.0% | -51.8% | 30.0% |
| Dynam Japan Holdings Co Ltd ($6889) | 27.7% | 24.0% | 24.5% | 25.7% | 24.6% |
| Bingo Group Holdings Ltd ($8220) | -8.7% | -31.2% | -39.9% | 35.3% | 24.4% |
| Mei Ah Entertainment Group Ltd ($391) | 32.8% | 43.0% | 28.5% | 24.5% | 22.1% |
| |
|---|
| Median (9 companies) | 10.2% | 10.3% | 1.5% | 15.2% | 22.1% |
|---|
| Neptune Group Ltd ($70) | 139.8% | 101.1% | 98.6% | 98.6% | 86.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Mei Ah Entertainment Group Ltd ($391) | 30.8% | 2.5% | 6.8% | 3.6% | 25.4% |
| Amax International Holdings Ltd ($959) | 0.9% | 18.7% | 10.4% | 2.7% | 17.2% |
| Dynam Japan Holdings Co Ltd ($6889) | 6.7% | 3.6% | 4.5% | 6.5% | 5.6% |
| China Vanguard Group Ltd ($8156) | 11.5% | 3.1% | 5.0% | 58.3% | 4.0% |
| Neway Group Holdings Ltd ($55) | 1.3% | 8.7% | 8.5% | 2.4% | 3.6% |
| |
|---|
| Median (9 companies) | 1.3% | 3.1% | 5.0% | 2.7% | 3.6% |
|---|
| Neptune Group Ltd ($70) | 0.0% | 0.2% | 0.0% | 9.8% | 0.0% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Dynam Japan Holdings Co Ltd ($6889) | | 22.5% | 23.8% | 25.4% | 21.8% |
| Pegasus Entertainment Holdings Ltd ($1326) | | 94.5% | 82.1% | 18.5% | 10.3% |
| China Vanguard Group Ltd ($8156) | -1.2% | -0.8% | -4.3% | -14.3% | 7.6% |
| Bingo Group Holdings Ltd ($8220) | -37.2% | -75.9% | -80.0% | 5.1% | 5.4% |
| China 3D Digital Entertainment Ltd ($8078) | -16.1% | -8.4% | -4.6% | -3.8% | -1.5% |
| |
|---|
| Median (9 companies) | -4.2% | -0.8% | -2.8% | -0.8% | -1.5% |
|---|
| Neptune Group Ltd ($70) | 24.9% | 22.0% | 22.8% | 23.8% | 21.1% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China 3D Digital Entertainment Ltd ($8078) | 134.1x | -11.9x | | -0.5x | 2.3x |
| Universe International Holdings Ltd ($1046) | -1.9x | -1.0x | -2.6x | -1.4x | -0.5x |
| Dynam Japan Holdings Co Ltd ($6889) | 0.9x | 0.8x | -0.0x | -0.8x | -0.7x |
| Mei Ah Entertainment Group Ltd ($391) | 0.4x | -1.0x | -0.1x | -0.7x | -1.3x |
| Pegasus Entertainment Holdings Ltd ($1326) | 4.1x | -0.3x | -0.4x | -1.3x | -1.4x |
| |
|---|
| Median (8 companies) | 0.6x | -1.0x | -0.4x | -1.3x | -1.3x |
|---|
| Neptune Group Ltd ($70) | 0.2x | 0.0x | -0.3x | -0.1x | -0.0x |
