Value Partners Group Ltd demonstrated fast growth in recent years. Will the growth continue?
19/03/2015 • About Value Partners Group Ltd (
$806) • By InTwits
Pay attention to Value Partners 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
Value Partners Group Ltd showed growth in the last financial year. Value Partners Group Ltd's revenue surged on 51.2% in FY2014. In addition to revenue Value Partners Group Ltd also keeps delivering EBITDA growth. It was 97.3% in FY2014
In the longer period the company showed fast revenue growth of 30.7% from 2011 to 2014 annualy. EBITDA surged on 62.4% from 2011 to 2014 annualy.
Value Partners Group Ltd ($806) financials for the last 5 years
| mln. HKD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 1,180 | 725 | 702 | 1,072 | 1,620 |
|---|
| Revenue growth, % | | -38.6% | -3.1% | 52.6% | 51.2% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 763 | 214 | 437 | 464 | 916 |
|---|
| EBITDA growth, % | | -71.9% | 104.2% | 6.2% | 97.3% |
|---|
| EBITDA margin, % | 64.6% | 29.5% | 62.2% | 43.3% | 56.6% |
|---|
| Net Income | 653 | 167 | 376 | 384 | 804 |
|---|
| Net Income margin, % | 55.3% | 23.1% | 53.6% | 35.9% | 49.6% |
|---|
| |
| CAPEX | 2 | 5 | 8 | 4 | 19 |
|---|
| CAPEX/Revenue, % | 0.211% | 0.677% | 1.08% | 0.346% | 1.18% |
|---|
| Debt | 0 | 0 | 0 | 0 | 62 |
|---|
| Cash | 1,219 | 1,315 | 888 | 692 | 1,801 |
|---|
| Net Debt/EBITDA | -1.6x | -6.1x | -2.0x | -1.5x | -1.9x |
|---|
| |
| ROIC, % | | 8.7% | 16.8% | 16.5% | 26.8% |
|---|
| ROE, % | 37.5% | 7.0% | 15.2% | 14.3% | 24.5% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Value Partners Group Ltd showed fast EBITDA margin growth of 13.3 pp from 43.3% to 56.6% in 2014. In the longer period EBITDA margin surged on 27.1 pp from 29.5% in 2011 to 56.6% in 2014.
Value Partners Group Ltd shows attractive ROIC at 26.8% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 8.66%. For the last three years the average ROIC was 20.0%.
Value Partners Group Ltd showed fast Net Income margin growth of 13.7 pp from 35.9% to 49.6% in 2014. If we look for the longer period Value Partners Group Ltd showed fast Net Income margin growth of 26.5 pp from 23.1% in 2011 to 49.6% in 2014.
Value Partners Group Ltd operates at ROE of 24.5%. It's average level of ROE for the last three years was 18.0%.
Capital expenditures (CAPEX)
In FY2014 Value Partners Group Ltd had CAPEX/Revenue of 1.18%. CAPEX/Revenue surged on 0.506 pp from 0.677% in 2011 to 1.18% in 2014. For the last three years the average CAPEX/Revenue was 0.871%.
Leverage (Debt)
Having such a fast growth profile Value Partners Group Ltd keeps negative net debt at -1.9x Net Debt/EBITDA. In the last 3 years the company showed fast leverage growth of 4.25x from -6.14x in 2011 to -1.90x in 2014.
Valuation vs. comparable companies
The company trades at 11.5x EV/EBITDA which is 49.6% lower than 22.8x Diversified Finan Serv industry avearge calculated based on 72 companies. The market closed today at 15.3x P/E for Value Partners Group Ltd which is 10.5% lower than 17.1x Diversified Finan Serv peer group avearge calculated on the basis of 30 companies.
Peers in Diversified Finan Serv
Below we provide Value Partners Group Ltd benchmarking against other companies in Diversified Finan Serv 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China New Energy Power Group Ltd ($1041) | | | 100.0% | 0.0% | 64,246.0% |
| ReOrient Group Ltd ($376) | | 63.3% | 112.8% | 75.1% | 1,106.9% |
| Global Strategic Group Ltd ($8007) | | 2.2% | -3.9% | 2.1% | 806.3% |
| Freeman Financial Corp Ltd ($279) | | -51.5% | -89.3% | 764.3% | 200.8% |
| Crown International Corp Ltd ($727) | | -37.7% | 225.8% | -75.0% | 117.4% |
| |
|---|
| Median (32 companies) | | 4.7% | -1.3% | 1.3% | 26.5% |
|---|
| Value Partners Group Ltd ($806) | | -38.6% | -3.1% | 52.6% | 51.2% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Freeman Financial Corp Ltd ($279) | 98.3% | 97.1% | 52.3% | 99.3% | 98.5% |
| China Fortune Financial Group Ltd ($290) | 71.1% | 86.7% | 91.4% | 93.7% | 91.6% |
| Styland Holdings Ltd ($211) | 69.1% | 48.0% | 57.7% | 75.1% | 88.2% |
| GreaterChina Professional Services Ltd ($8193) | 83.4% | 75.0% | 70.7% | 69.3% | 74.2% |
| China Smarter Energy Group Holdings Ltd ($1004) | 6.8% | -3.3% | 6.2% | 4.0% | 46.9% |
| |
|---|
| Median (7 companies) | 70.1% | 75.0% | 52.3% | 75.1% | 74.2% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Styland Holdings Ltd ($211) | 74.2% | 68.6% | 198.6% | 91.5% | 161.0% |
| Get Nice Holdings Ltd ($64) | 74.3% | 28.4% | 2.6% | 153.4% | 92.7% |
| Freeman Financial Corp Ltd ($279) | 109.0% | -52.0% | -6,089.9% | 83.0% | 83.4% |
| China New Energy Power Group Ltd ($1041) | | -47,848.0% | -13,367.2% | -8,894.4% | 83.2% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 85.2% | 83.5% | 81.6% | 73.4% | 75.7% |
| |
|---|
| Median (33 companies) | 40.9% | 24.1% | 13.3% | 36.8% | 42.5% |
|---|
| Value Partners Group Ltd ($806) | 64.6% | 29.5% | 62.2% | 43.3% | 56.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Gemini Investments Holdings Ltd ($174) | 2.1% | 14.9% | 479.1% | 37.3% | 216.0% |
| Crown International Corp Ltd ($727) | 102.2% | 168.4% | 71.6% | 147.6% | 12.1% |
| Simsen International Corp Ltd ($993) | 4.0% | 1.7% | 3.1% | 1.9% | 10.1% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 1.5% | 6.2% | 16.2% | 9.8% | 7.3% |
| Tanrich Financial Holdings Ltd ($812) | 2.0% | 1.2% | 1.3% | 0.9% | 6.3% |
| |
|---|
| Median (33 companies) | 1.5% | 2.1% | 2.0% | 1.7% | 0.7% |
|---|
| Value Partners Group Ltd ($806) | 0.2% | 0.7% | 1.1% | 0.3% | 1.2% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| ReOrient Group Ltd ($376) | 5.8% | -24.9% | -45.6% | -53.5% | 128.6% |
| China New Energy Power Group Ltd ($1041) | -10.1% | -8.5% | -5.6% | -4.2% | 24.9% |
| Hong Kong Exchanges and Clearing Ltd ($388) | 68.6% | 65.6% | 29.1% | 20.1% | 21.5% |
| GreaterChina Professional Services Ltd ($8193) | 179.7% | 84.1% | 18.1% | 29.2% | 19.1% |
| CL Group Holdings Ltd ($8098) | 102.9% | 34.8% | 14.9% | 15.0% | 14.1% |
| |
|---|
| Median (33 companies) | 5.6% | 3.4% | 1.7% | 2.3% | 4.8% |
|---|
| Value Partners Group Ltd ($806) | | 8.7% | 16.8% | 16.5% | 26.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Bright Smart Securities & Commodities Group Ltd ($1428) | 3.4x | 7.3x | 2.1x | 10.3x | 9.3x |
| Aeon Credit Service Asia Co Ltd ($900) | 6.2x | 6.3x | 5.2x | 6.0x | 6.9x |
| Shenyin Wanguo HK Ltd ($218) | -0.3x | -4.5x | 9.6x | 7.1x | 6.1x |
| Guoco Group Ltd ($53) | 3.6x | 9.8x | | 4.1x | 4.6x |
| Quam Ltd ($952) | -0.3x | 4.9x | 58.9x | 15.9x | 4.1x |
| |
|---|
| Median (24 companies) | -0.3x | -0.3x | 0.3x | 1.1x | -0.1x |
|---|
| Value Partners Group Ltd ($806) | -1.6x | -6.1x | -2.0x | -1.5x | -1.9x |
