The growth of Pacific Online Ltd is hard to miss
03/04/2015 • About Pacific Online Ltd (
$543) • By InTwits
Pacific Online Ltd is a growth stock in Internet industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Pacific Online Ltd showed fast growth in the last financial year. The company's revenue surged on 16.5% in FY2014. Together with revenue growth Pacific Online Ltd also managed to keep EBITDA growth. EBITDA grew -11.2% for the same period.
In the longer period the company showed fast revenue growth of 15.5% from 2011 to 2014 annualy. EBITDA increased slightly on 0.462% from 2011 to 2014 annualy.
Pacific Online Ltd ($543) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 509 | 640 | 716 | 848 | 988 |
|---|
| Revenue growth, % | | 25.9% | 11.8% | 18.5% | 16.5% |
|---|
| Gross margin, % | 72.7% | 69.1% | 71.0% | 70.5% | 67.3% |
|---|
| SG&A, % | 21.2% | 21.0% | 24.4% | 27.9% | 32.9% |
|---|
| EBITDA | 240 | 291 | 306 | 333 | 295 |
|---|
| EBITDA growth, % | | 21.3% | 5.2% | 8.6% | -11.2% |
|---|
| EBITDA margin, % | 47.2% | 45.5% | 42.8% | 39.2% | 29.9% |
|---|
| Net Income | 201 | 229 | 236 | 254 | 221 |
|---|
| Net Income margin, % | 39.5% | 35.8% | 33.0% | 29.9% | 22.4% |
|---|
| |
| CAPEX | 114 | 101 | 22 | 51 | 36 |
|---|
| CAPEX/Revenue, % | 22.5% | 15.8% | 3.08% | 6.07% | 3.60% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 262 | 430 | 437 | 438 | 392 |
|---|
| Net Debt/EBITDA | -1.1x | -1.5x | -1.4x | -1.3x | -1.3x |
|---|
| |
| ROIC, % | 41.2% | 41.7% | 37.9% | 36.4% | 28.6% |
|---|
| ROE, % | 36.8% | 34.8% | 31.7% | 30.4% | 24.0% |
|---|
Profitability and return on investment
EBITDA margin declined noticeably from 39.2% in FY2013 to 29.9% in FY2014. In the last 3 years the company's EBITDA margin dropped on 15.6 pp from 45.5% in 2011 to 29.9% in 2014.
We call Pacific Online Ltd an attractive growth stock as together with the growth it delivers high ROIC at 28.6%. During the last three years it dropped - it was 41.7% in FY2011. It's average ROIC for the last three years was 34.3%.
Pacific Online Ltd's Net Income margin dropped on 7.50 pp from 29.9% to 22.4% in 2014. In the last 3 years Pacific Online Ltd showed big decline in Net Income margin of 13.4 pp from 35.8% in 2011 to 22.4% in 2014.
Pacific Online Ltd operates at ROE of 24.0%. It's average level of ROE for the last three years was 28.7%.
Capital expenditures (CAPEX)
Pacific Online Ltd's CAPEX/Revenue was 3.60% in FY2014. The company's CAPEX/Revenue dropped on 12.2 pp from 15.8% in 2011 to 3.60% in 2014. Average CAPEX/Revenue for the last three years was 4.25%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -1.3x Net Debt/EBITDA. In the last 3 years Pacific Online Ltd showed fast leverage growth of 0.15x from -1.48x in 2011 to -1.33x in 2014.
Peers in Internet
Below you can find Pacific Online Ltd benchmarking vs. other companies in Internet 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 |
|---|
| GET Holdings Ltd ($8380) | | -4.3% | 13.8% | 2,126.4% | 154.4% |
| China Healthcare Holdings Ltd ($673) | | -97.9% | -14.8% | -52.9% | 63.1% |
| ABC Multiactive Ltd ($8131) | | -1.9% | -15.2% | -13.2% | 59.4% |
| Tencent Holdings Ltd ($700) | | 45.0% | 54.0% | 37.7% | 30.6% |
| Well Way Group Ltd ($8063) | | 269.3% | -6.2% | -11.8% | 23.6% |
| |
|---|
| Median (13 companies) | | 15.9% | 11.9% | 3.7% | 10.7% |
|---|
| Pacific Online Ltd ($543) | | 25.9% | 11.8% | 18.5% | 16.5% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| ABC Multiactive Ltd ($8131) | 72.1% | 73.0% | 86.7% | 83.5% | 86.2% |
| Sino-I Technology Ltd ($250) | 76.4% | 74.2% | 75.3% | 82.7% | 78.8% |
| Forgame Holdings Ltd ($484) | 42.5% | 82.1% | 89.8% | 84.7% | 66.1% |
| SUNeVision Holdings Ltd ($8008) | 49.8% | 51.4% | 53.5% | 60.5% | 64.7% |
| GET Holdings Ltd ($8380) | 33.1% | 92.7% | 94.5% | 80.5% | 61.7% |
| |
|---|
| Median (11 companies) | 49.8% | 65.2% | 65.8% | 54.0% | 60.9% |
|---|
| Pacific Online Ltd ($543) | 72.7% | 69.1% | 71.0% | 70.5% | 67.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| SUNeVision Holdings Ltd ($8008) | 67.3% | 61.1% | 64.2% | 71.6% | 71.6% |
| GET Holdings Ltd ($8380) | -301.1% | -182.0% | -237.7% | 56.8% | 66.4% |
| Tencent Holdings Ltd ($700) | 52.8% | 48.2% | 38.4% | 34.7% | 42.5% |
| Tradelink Electronic Commerce Ltd ($536) | 39.5% | 42.1% | 38.6% | 33.8% | 33.1% |
| ABC Multiactive Ltd ($8131) | -12.6% | -20.3% | -3.5% | -17.0% | 21.9% |
| |
|---|
| Median (13 companies) | -11.8% | 6.3% | 4.3% | 6.1% | 13.4% |
|---|
| Pacific Online Ltd ($543) | 47.2% | 45.5% | 42.8% | 39.2% | 29.9% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| SUNeVision Holdings Ltd ($8008) | 8.0% | 14.2% | 7.6% | 10.2% | 62.8% |
| China E-Learning Group Ltd ($8055) | 1.6% | 1.3% | 0.0% | 2.7% | 15.3% |
| Tencent Holdings Ltd ($700) | 9.9% | 14.2% | 9.0% | 8.1% | 5.5% |
| Prosten Technology Holdings Ltd ($8026) | 2.7% | 2.1% | 2.3% | 2.3% | 4.4% |
| Sino-I Technology Ltd ($250) | 16.4% | 20.6% | 9.3% | 12.7% | 4.0% |
| |
|---|
| Median (13 companies) | 6.8% | 13.5% | 5.5% | 2.3% | 1.4% |
|---|
| Pacific Online Ltd ($543) | 22.5% | 15.8% | 3.1% | 6.1% | 3.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tencent Holdings Ltd ($700) | 46.9% | 33.4% | 29.5% | 26.7% | 29.1% |
| GET Holdings Ltd ($8380) | -34.1% | -6.8% | -6.5% | 10.8% | 19.3% |
| Tradelink Electronic Commerce Ltd ($536) | 19.3% | 19.5% | 22.4% | 18.2% | 17.4% |
| SUNeVision Holdings Ltd ($8008) | 10.6% | 9.9% | 10.8% | 13.3% | 14.4% |
| Well Way Group Ltd ($8063) | -1.1% | 0.7% | -2.5% | -4.1% | 0.1% |
| |
|---|
| Median (13 companies) | -5.2% | 2.0% | -2.5% | 3.7% | -4.4% |
|---|
| Pacific Online Ltd ($543) | 41.2% | 41.7% | 37.9% | 36.4% | 28.6% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| ABC Multiactive Ltd ($8131) | | | | | 9.5x |
| Tencent Holdings Ltd ($700) | -0.5x | -0.1x | -0.2x | -0.2x | -0.2x |
| GET Holdings Ltd ($8380) | | | | -1.1x | -1.0x |
| SUNeVision Holdings Ltd ($8008) | -2.1x | -2.7x | -2.2x | -2.0x | -1.5x |
| Tradelink Electronic Commerce Ltd ($536) | -2.5x | -1.7x | -1.4x | -1.5x | -1.5x |
| |
|---|
| Median (8 companies) | -1.3x | -2.4x | -1.1x | -1.1x | -1.5x |
|---|
| Pacific Online Ltd ($543) | -1.1x | -1.5x | -1.4x | -1.3x | -1.3x |
