Sino Biopharmaceutical Ltd demonstrated healthy growth in recent years
01/04/2015 • About Sino Biopharmaceutical Ltd (
$1177) • By InTwits
Pay attention to Sino Biopharmaceutical 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
Sino Biopharmaceutical Ltd showed fast growth in the last financial year. Sino Biopharmaceutical Ltd's revenue surged on 25.0% in FY2014. In addition to revenue Sino Biopharmaceutical Ltd also keeps delivering EBITDA growth. It was 32.3% in FY2014
If we look for the longer period Sino Biopharmaceutical Ltd showed fast revenue growth of 28.9% from 2011 to 2014 annualy. EBITDA surged on 34.6% from 2011 to 2014 annualy.
Sino Biopharmaceutical Ltd ($1177) financials for the last 5 years
| mln. HKD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 4,086 | 5,782 | 7,497 | 9,901 | 12,378 |
|---|
| Revenue growth, % | | 41.5% | 29.7% | 32.1% | 25.0% |
|---|
| Gross margin, % | 80.8% | 78.5% | 78.5% | 77.5% | 76.4% |
|---|
| SG&A, % | 54.3% | 52.8% | 53.3% | 51.0% | 49.8% |
|---|
| EBITDA | 1,154 | 1,087 | 1,603 | 2,004 | 2,651 |
|---|
| EBITDA growth, % | | -5.8% | 47.4% | 25.0% | 32.3% |
|---|
| EBITDA margin, % | 28.2% | 18.8% | 21.4% | 20.2% | 21.4% |
|---|
| Net Income | 567 | 463 | 891 | 1,037 | 1,513 |
|---|
| Net Income margin, % | 13.9% | 8.00% | 11.9% | 10.5% | 12.2% |
|---|
| |
| CAPEX | 427 | 286 | 332 | 563 | 610 |
|---|
| CAPEX/Revenue, % | 10.4% | 4.95% | 4.43% | 5.69% | 4.93% |
|---|
| Debt | 155 | 85 | 41 | 74 | 1,724 |
|---|
| Cash | 1,619 | 2,018 | 2,495 | 2,890 | 3,167 |
|---|
| Net Debt/EBITDA | -1.3x | -1.8x | -1.5x | -1.4x | -0.5x |
|---|
| |
| ROIC, % | 27.8% | 19.9% | 26.2% | 26.8% | 26.5% |
|---|
| ROE, % | 18.5% | 12.4% | 21.2% | 20.6% | 25.0% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Sino Biopharmaceutical Ltd showed EBITDA margin growth of 1.20 pp from 20.2% to 21.4% in 2014. If we look for the longer period Sino Biopharmaceutical Ltd's EBITDA margin surged on 2.60 pp from 18.8% in 2011 to 21.4% in 2014.
Sino Biopharmaceutical Ltd shows attractive ROIC at 26.5% for the last 12 months which assumes stable development model. Three years ago it was lower at 19.9%. Average ROIC for the last three years was 26.5%.
The company's Net Income margin surged on 1.70 pp from 10.5% to 12.2% in 2014. In the longer period Sino Biopharmaceutical Ltd's Net Income margin surged on 4.20 pp from 8% in 2011 to 12.2% in 2014.
Sino Biopharmaceutical Ltd operates at ROE of 25.0%. For the last three years the average ROE was 22.3%.
Capital expenditures (CAPEX)
In FY2014 Sino Biopharmaceutical Ltd had CAPEX/Revenue of 4.93%. Sino Biopharmaceutical Ltd showed almost no change in CAPEX/Revenue of 0.0197 pp from 4.95% in 2011 to 4.93% in 2014. For the last three years the average CAPEX/Revenue was 5.01%.
Leverage (Debt)
The company has negative net debt at -0.5x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period leverage surged on 1.23x from -1.78x in 2011 to -0.54x in 2014.
Valuation vs. comparable companies
At the end of trading day today Sino Biopharmaceutical Ltd traded at 14.3x EV/EBITDA which is 16.4% lower than 17.1x Pharmaceuticals peer group avearge calculated on the basis of 266 companies. The market closed today at 26.0x P/E for Sino Biopharmaceutical Ltd which is 1.33% higher than 25.7x Pharmaceuticals peer group avearge calculated on the basis of 24 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 18.6x EV/(EBITDA-CAPEX) which is higher vs. -3.4x Pharmaceuticals industry avearge calculated based on 20 companies.
Peers in Pharmaceuticals
Below we provide Sino Biopharmaceutical Ltd benchmarking against other companies in Pharmaceuticals 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 |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | 7.0% | -10.0% | -45.4% | 1,636.5% |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | | -17.7% | 15.1% | -99.9% | 480.0% |
| United Gene High-Tech Group Ltd ($399) | | -81.4% | -71.8% | -60.5% | 196.0% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 3.1% | 22.3% | 35.2% | 90.0% |
| Dragonite International Ltd ($329) | | -8.8% | -10.5% | 13.5% | 64.8% |
| |
|---|
| Median (25 companies) | | 15.4% | 13.4% | 17.3% | 17.4% |
|---|
| Sino Biopharmaceutical Ltd ($1177) | | 41.5% | 29.7% | 32.1% | 25.0% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Consun Pharmaceutical Group Ltd ($1681) | 79.0% | 75.5% | 75.7% | 79.1% | 78.3% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 71.9% | 72.6% | 65.2% | 77.9% | 72.1% |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 55.9% | 61.6% | 67.4% | 65.0% | 68.4% |
| Tianda Pharmaceuticals Ltd ($455) | 76.4% | 79.6% | 74.5% | 68.8% | 64.1% |
| China Traditional Chinese Medicine Co Ltd ($570) | 55.8% | 54.0% | 54.7% | 59.2% | 62.0% |
| |
|---|
| Median (24 companies) | 29.2% | 34.7% | 36.9% | 33.3% | 43.2% |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 80.8% | 78.5% | 78.5% | 77.5% | 76.4% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Asia Resources Holdings Ltd ($899) | -8.9% | 3.5% | -80.8% | 25.1% | 113.7% |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 18.2% | 18.8% | 20.3% | 23.8% | 38.5% |
| Consun Pharmaceutical Group Ltd ($1681) | 37.3% | 39.6% | 41.2% | 38.3% | 34.4% |
| Tianda Pharmaceuticals Ltd ($455) | 57.7% | 66.9% | 77.7% | 42.0% | 33.2% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 47.4% | 32.9% | 60.6% | 21.0% | 28.8% |
| |
|---|
| Median (24 companies) | 9.9% | 15.5% | 13.0% | 17.3% | 17.3% |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 28.2% | 18.8% | 21.4% | 20.2% | 21.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 25.1% | 0.2% | | 11,100.0% | 103.4% |
| Extrawell Pharmaceutical Holdings Ltd ($858) | 0.7% | 5.7% | 1.7% | 20.6% | 92.4% |
| Asia Resources Holdings Ltd ($899) | 28.6% | 12.2% | 4.4% | 8.1% | 92.0% |
| Dragonite International Ltd ($329) | 15.5% | 2.0% | 27.8% | 19.3% | 19.1% |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 4.8% | 17.4% | 38.7% | 34.1% | 13.7% |
| |
|---|
| Median (24 companies) | 5.8% | 8.1% | 6.2% | 6.9% | 7.6% |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 10.4% | 4.9% | 4.4% | 5.7% | 4.9% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 43.8% | 34.4% | 27.6% | 22.2% | 19.9% |
| CSPC Pharmaceutical Group Ltd ($1093) | 13.9% | 9.9% | 14.5% | 12.8% | 18.1% |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 25.0% | 17.7% | 12.6% | 14.0% | 17.8% |
| China Pioneer Pharma Holdings Ltd ($1345) | | 27.4% | 34.4% | 25.1% | 17.2% |
| Consun Pharmaceutical Group Ltd ($1681) | | 50.1% | 51.1% | 24.2% | 16.8% |
| |
|---|
| Median (25 companies) | 10.4% | 8.7% | 10.8% | 7.8% | 9.1% |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 27.8% | 19.9% | 26.2% | 26.8% | 26.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China NT Pharma Group Co Ltd ($1011) | 2.6x | 0.4x | | | 7.2x |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 0.4x | 2.5x | 5.4x | 4.0x | 3.4x |
| Shanghai Fosun Pharmaceutical Group Co Ltd ($2196) | 5.7x | 2.4x | 0.8x | 1.4x | 2.2x |
| Sinopharm Group Co Ltd ($1099) | -1.5x | 0.2x | 1.2x | 1.6x | 1.6x |
| China Pioneer Pharma Holdings Ltd ($1345) | 0.5x | 2.3x | 1.8x | -1.0x | 1.2x |
| |
|---|
| Median (19 companies) | -0.8x | -0.2x | 0.0x | 0.0x | -0.3x |
|---|
| Sino Biopharmaceutical Ltd ($1177) | -1.3x | -1.8x | -1.5x | -1.4x | -0.5x |
