Longrun Tea Group Co Ltd Net Income dropped on 1,468% in 2015 while EBITDA Margin increased on 7.1 pp from -14.1% to -6.9%
19/06/2015 • About Longrun Tea Group Co Ltd (
$2898) • By InTwits
Longrun Tea Group Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Longrun Tea Group Co Ltd doesn't have a profitable business model yet: FY2015 ROIC is -11.1%
- The company operates at negative EBITDA Margin: -6.9%
- EBITDA Margin is quite volatile: -6.9% in FY2015, -14.1% in FY2014, 0.7% in FY2013, 21.3% in FY2012, 24.4% in FY2011
- Longrun Tea Group Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 8.7 in FY2015, 11.7 in FY2014, 44.0 in FY2013, 15.2 in FY2012, 12.3 in FY2011
- The company has unprofitable business model: ROIC is at -11.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Longrun Tea Group Co Ltd ($2898) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 395.0 | 344.3 | 271.2 | 286.5 | 256.4 | -10.5% |
| Gross Profit | 156.1 | 154.3 | 115.7 | 112.3 | 99.5 | -11.5% |
| SG&A | | | 138.3 | 170.9 | 136.6 | -20.1% |
| EBITDA | 96.2 | 73.2 | 1.8 | -40.3 | -17.7 | -56.0% |
| Net Income | 59.5 | 36.0 | 6.4 | 14.9 | -203.9 | -1,467.6% |
Balance Sheet
|
|---|
| Cash | 118.2 | 87.8 | 134.4 | 100.4 | 81.9 | -18.4% |
| Short Term Debt | 16.1 | 12.0 | 11.9 | 0.3 | 0.2 | -33.7% |
| Long Term Debt | 0.5 | 0.7 | 0.4 | 0.2 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 12.3 | 15.2 | 44.0 | 11.7 | 8.7 | -25.9% |
Ratios
|
|---|
| Revenue growth | 146.7% | -12.8% | -21.2% | 5.6% | -10.5% | |
| EBITDA growth | -2,477.4% | -23.9% | -97.5% | -2,301.0% | -56.0% | |
| Gross Margin | 39.5% | 44.8% | 42.7% | 39.2% | 38.8% | -0.4% |
| EBITDA Margin | 24.4% | 21.3% | 0.7% | -14.1% | -6.9% | 7.1% |
| Net Income Margin | 15.1% | 10.5% | 2.4% | 5.2% | -79.5% | -84.7% |
| SG&A, % of revenue | | | 51.0% | 59.6% | 53.3% | -6.4% |
| CAPEX, % of revenue | 3.1% | 4.4% | 16.2% | 4.1% | 3.4% | -0.7% |
| ROIC | 22.6% | 13.7% | -3.4% | -13.2% | -11.1% | 2.1% |
| ROE | 17.5% | 9.0% | 1.5% | 3.4% | -59.4% | -62.8% |
| Net Debt/EBITDA | -1.1x | -1.0x | -66.7x | | | 0.0x |
Revenue and profitability
Longrun Tea Group Co Ltd's Revenue dropped on 10.5% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 7.1 pp from -14.1% to -6.9% in FY2015.
Gross Margin showed almost no change in FY2015. SG&A as a % of Revenue decreased on 6.4 pp from 59.6% to 53.3% in FY2015.
Net Income marign dropped on 84.7 pp from 5.2% to -79.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.4% in FY2015. The company showed small CAPEX/Revenue decline of 1.0 pp from 4.4% in FY2012 to 3.4% in FY2015. It's average level of CAPEX/Revenue for the last three years was 7.9%.
Return on investment
The company operates at negative ROIC (-11.13%) and ROE (-59.41%). ROIC increased on 2.1 pp from -13.2% to -11.1% in FY2015. ROE dropped on 62.8 pp from 3.4% to -59.4% in FY2015.
Leverage (Debt)
Debt level is -3.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt dropped on 60.1% in FY2015 while cash dropped on 18.4% in FY2015.
Appendix 1: Peers in Beverages
Below we provide Longrun Tea Group Co Ltd benchmarking against other companies in Beverages 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Tontine Wines Group Ltd ($389) | 18.0% | -20.7% | -73.3% | 62.7% | |
| Silver base Group Holdings Ltd ($886) | 68.1% | 34.1% | -86.9% | 25.4% | |
| Besunyen Holdings Co Ltd ($926) | -3.9% | -43.5% | 2.6% | 15.7% | |
| Vitasoy International Holdings Ltd ($345) | 10.5% | 11.6% | 9.0% | 10.9% | |
| China Tianyi Holdings Ltd ($756) | -5.0% | 43.0% | -19.2% | 8.3% | |
| |
|---|
| Median (15 companies) | 17.6% | 0.4% | -8.1% | 2.0% | |
|---|
| Longrun Tea Group Co Ltd ($2898) | | -12.8% | -21.2% | 5.6% | -10.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Besunyen Holdings Co Ltd ($926) | 87.8% | 82.5% | 83.3% | 84.3% | |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 78.8% | 81.4% | 73.2% | 62.7% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 61.6% | 64.1% | 61.2% | 62.2% | |
| Vitasoy International Holdings Ltd ($345) | 48.1% | 47.4% | 47.5% | 48.4% | |
| San Miguel Brewery Hong Kong Ltd ($236) | 43.4% | 42.8% | 42.2% | 42.8% | |
| |
|---|
| Median (15 companies) | 46.1% | 44.5% | 34.7% | 34.7% | |
|---|
| Longrun Tea Group Co Ltd ($2898) | 39.5% | 44.8% | 42.7% | 39.2% | 38.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 72.2% | 73.3% | 73.2% | 69.2% | |
| China Tianyi Holdings Ltd ($756) | 17.7% | 28.4% | 26.1% | 29.7% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 27.4% | 27.5% | 25.3% | 26.1% | |
| Yantai North Andre Juice Co ($2218) | 16.1% | 14.1% | 11.9% | 15.5% | |
| China Haisheng Juice Holdings Co Ltd ($359) | 15.2% | 5.8% | 6.6% | 14.9% | |
| |
|---|
| Median (15 companies) | 16.1% | 15.2% | 10.5% | 11.3% | |
|---|
| Longrun Tea Group Co Ltd ($2898) | 24.4% | 21.3% | 0.7% | -14.1% | -6.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Culiangwang Beverages Holdings Ltd ($904) | 39.1% | 26.8% | 52.2% | 81.8% | |
| China Tianyi Holdings Ltd ($756) | 7.5% | 5.8% | 6.2% | 33.6% | |
| China Tontine Wines Group Ltd ($389) | 5.3% | 15.3% | 129.4% | 16.7% | |
| China Haisheng Juice Holdings Co Ltd ($359) | 3.6% | 4.8% | 6.3% | 15.3% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 11.2% | 18.3% | 8.8% | 12.0% | |
| |
|---|
| Median (15 companies) | 7.5% | 11.1% | 6.5% | 8.8% | |
|---|
| Longrun Tea Group Co Ltd ($2898) | 3.1% | 4.4% | 16.2% | 4.1% | 3.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitasoy International Holdings Ltd ($345) | 23.8% | 20.8% | 20.6% | 21.7% | |
| Tenfu Cayman Holdings Co Ltd ($6868) | 26.1% | 19.4% | 17.9% | 15.7% | |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 41.0% | 23.3% | 20.3% | 14.9% | |
| Tsingtao Brewery Co Ltd ($168) | 16.4% | 13.4% | 12.0% | 12.2% | |
| China Tianyi Holdings Ltd ($756) | 7.3% | 12.0% | 6.1% | 6.7% | |
| |
|---|
| Median (15 companies) | 10.3% | 9.6% | 3.7% | 3.2% | |
|---|
| Longrun Tea Group Co Ltd ($2898) | 22.6% | 13.7% | -3.4% | -13.2% | -11.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Distillery Group Ltd ($39) | | | 4.6x | 17.7x | |
| China Haisheng Juice Holdings Co Ltd ($359) | 3.0x | 11.9x | 16.2x | 8.9x | |
| China Huiyuan Juice Group Ltd ($1886) | 8.6x | 5.4x | 4.3x | 7.9x | |
| Yantai North Andre Juice Co ($2218) | 2.6x | 2.3x | 2.4x | 2.2x | |
| San Miguel Brewery Hong Kong Ltd ($236) | | | 2.0x | 1.0x | |
| |
|---|
| Median (11 companies) | -0.4x | -0.7x | 1.9x | 0.9x | |
|---|
