Lenovo Group Ltd demonstrates fast growth
28/05/2015 • About Lenovo Group Ltd (
$992) • By InTwits
Pay attention to Lenovo 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
Lenovo Group Ltd showed fast growth in the last financial year. The company's revenue surged on 19.6% in FY2015. The growth also happened in EBITDA of 30.4% for the same period.
If we look for the longer period Lenovo Group Ltd showed fast revenue growth of 16.1% from FY2012 to FY2015 annualy. EBITDA surged on 33.8% from FY2012 to FY2015 annualy.
Lenovo Group Ltd ($992) financials for the last 5 years
| mln. $ | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 21,594 | 29,574 | 33,873 | 38,707 | 46,296 |
|---|
| Revenue growth, % | | 37.0% | 14.5% | 14.3% | 19.6% |
|---|
| Gross margin, % | 10.9% | 11.7% | 12.0% | 13.1% | 14.4% |
|---|
| SG&A, % | 8.14% | 8.19% | 8.07% | 8.53% | 9.04% |
|---|
| EBITDA | 558 | 755 | 1,047 | 1,386 | 1,807 |
|---|
| EBITDA growth, % | | 35.2% | 38.7% | 32.4% | 30.4% |
|---|
| EBITDA margin, % | 2.59% | 2.55% | 3.09% | 3.58% | 3.90% |
|---|
| Net Income | 273 | 473 | 635 | 817 | 829 |
|---|
| Net Income margin, % | 1.27% | 1.60% | 1.88% | 2.11% | 1.79% |
|---|
| |
| CAPEX | 127 | 307 | 388 | 566 | 676 |
|---|
| CAPEX/Revenue, % | 0.590% | 1.04% | 1.15% | 1.46% | 1.46% |
|---|
| Debt | 272 | 63 | 479 | 456 | 3,054 |
|---|
| Cash | 2,954 | 3,758 | 3,454 | 3,858 | 2,855 |
|---|
| Net Debt/EBITDA | -4.8x | -4.9x | -2.8x | -2.5x | 0.1x |
|---|
| |
| ROIC, % | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% |
|---|
| ROE, % | 15.9% | 22.5% | 25.3% | 28.8% | 23.4% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. The company showed EBITDA margin growth of 0.300 pp from 3.60% to 3.90% in FY2015. In the last 3 years EBITDA margin surged on 1.30 pp from 2.60% in FY2012 to 3.90% in FY2015.
We call Lenovo Group Ltd an attractive growth stock as together with the growth it delivers high ROIC at 24.5%. During the last three years it decreased - it was 26.2% in FY2012. It's average ROIC for the last three years was 29.9%.
The company showed big decline in Net Income margin of 0.300 pp from 2.10% to 1.80% in FY2015. If we look for the longer period Lenovo Group Ltd showed fast Net Income margin growth of 0.200 pp from 1.60% in FY2012 to 1.80% in FY2015.
Lenovo Group Ltd operates at ROE of 23.4%. Average ROE for the last three years was 25.8%.
Capital expenditures (CAPEX)
In FY2015 Lenovo Group Ltd had CAPEX/Revenue of 1.46%. The company's CAPEX/Revenue surged on 0.423 pp from 1.04% in FY2012 to 1.46% in FY2015. It's average CAPEX/Revenue for the last three years was 1.36%.
Leverage (Debt)
Lenovo Group Ltd has low debt level at 0.1x Net Debt/EBITDA - at the same time with high growth. In the longer period the company showed fast leverage growth of 5.01x from -4.90x in FY2012 to 0.11x in FY2015.
Management team
Lenovo Group Ltd is headed by Yang Yuanqing as a CEO and by Wai Ming Wong as a CFO.
Peers in Computers
Below we provide Lenovo Group Ltd benchmarking against other companies in Computers 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Peking University Resources Holdings Co Ltd ($618) | 16.2% | -49.6% | 11.2% | 106.0% | |
| Alibaba Health Information Technology Ltd ($241) | 29.4% | 29.4% | -96.7% | 73.0% | |
| Thiz Technology Group Ltd ($8119) | 136.4% | -4.1% | -95.1% | 72.2% | |
| Universal Technologies Holdings Ltd ($1026) | 95.5% | -47.3% | 49.8% | 67.1% | |
| PAX Global Technology Ltd ($327) | 52.5% | 19.0% | 12.1% | 61.2% | |
| |
|---|
| Median (24 companies) | 12.7% | 3.8% | -1.8% | 7.2% | |
|---|
| Lenovo Group Ltd ($992) | | 37.0% | 14.5% | 14.3% | 19.6% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Universal Technologies Holdings Ltd ($1026) | 86.0% | 87.3% | 79.7% | 90.3% | |
| Thiz Technology Group Ltd ($8119) | 2.9% | 8.8% | 63.8% | 86.2% | |
| Computer & Technologies Holdings Ltd ($46) | 27.4% | 45.3% | 54.0% | 52.1% | |
| CCID Consulting Co Ltd ($8235) | 46.5% | 43.7% | 49.1% | 51.8% | |
| Alibaba Health Information Technology Ltd ($241) | 10.1% | 11.4% | -12.6% | 49.3% | |
| |
|---|
| Median (22 companies) | 13.2% | 14.2% | 17.0% | 17.2% | |
|---|
| Lenovo Group Ltd ($992) | 10.9% | 11.7% | 12.0% | 13.1% | 14.4% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Computer & Technologies Holdings Ltd ($46) | 4.8% | 12.9% | 19.9% | 20.1% | |
| Ju Teng International Holdings Ltd ($3336) | 9.5% | 15.1% | 19.9% | 19.3% | |
| PAX Global Technology Ltd ($327) | 18.9% | 16.5% | 17.4% | 18.8% | |
| CCID Consulting Co Ltd ($8235) | 19.0% | 10.6% | 10.8% | 12.3% | |
| Universal Technologies Holdings Ltd ($1026) | 29.5% | 12.8% | 1.5% | 9.9% | |
| |
|---|
| Median (24 companies) | 2.9% | 3.2% | 2.2% | -1.5% | |
|---|
| Lenovo Group Ltd ($992) | 2.6% | 2.6% | 3.1% | 3.6% | 3.9% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| North Asia Resources Holdings Ltd ($61) | 34.3% | 4.6% | 94.2% | 177.8% | |
| Beautiful China Holdings Co Ltd ($706) | 44.9% | 8.4% | 2.2% | 26.2% | |
| Ju Teng International Holdings Ltd ($3336) | 17.6% | 14.1% | 18.7% | 20.0% | |
| Alibaba Health Information Technology Ltd ($241) | 2.1% | 4.4% | 46.3% | 17.2% | |
| Universal Technologies Holdings Ltd ($1026) | 8.5% | 20.0% | 5.7% | 14.2% | |
| |
|---|
| Median (24 companies) | 1.6% | 1.2% | 1.6% | 2.1% | |
|---|
| Lenovo Group Ltd ($992) | 0.6% | 1.0% | 1.1% | 1.5% | 1.5% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| PAX Global Technology Ltd ($327) | 14.1% | 12.3% | 12.8% | 18.7% | |
| CCID Consulting Co Ltd ($8235) | 20.6% | 11.3% | 10.7% | 10.2% | |
| TPV Technology Ltd ($903) | 6.4% | 7.7% | 1.8% | 10.1% | |
| Computer & Technologies Holdings Ltd ($46) | 4.1% | 6.0% | 8.6% | 9.4% | |
| Wong's International Hldgs ($99) | 9.5% | 5.1% | 4.8% | 8.5% | |
| |
|---|
| Median (25 companies) | 3.7% | 0.9% | -0.2% | -1.4% | |
|---|
| Lenovo Group Ltd ($992) | 18.9% | 26.2% | 30.5% | 34.7% | 24.5% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| EVOC Intelligent Technology Co Ltd ($2308) | 6.4x | 0.5x | 5.8x | 5.7x | |
| Powerleader Science & Technology Group Ltd ($8236) | 2.0x | 2.7x | 3.6x | 4.6x | |
| Ju Teng International Holdings Ltd ($3336) | 2.5x | 2.1x | 1.8x | 1.7x | |
| Wong's International Hldgs ($99) | -1.8x | -3.5x | 2.7x | 1.4x | |
| TPV Technology Ltd ($903) | 0.5x | -0.2x | 0.6x | -0.0x | |
| |
|---|
| Median (12 companies) | -1.6x | -2.1x | -1.3x | -4.1x | |
|---|
| Lenovo Group Ltd ($992) | -4.8x | -4.9x | -2.8x | -2.5x | 0.1x |
