Hong Kong Life Sciences and Technology Group Ltd reports 112% CAPEX growth while 52.9% Revenue decline
24/06/2015 • About Hong Kong Life Sciences and Technology Group Ltd (
$8085) • By InTwits
Hong Kong Life Sciences and Technology Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hong Kong Life Sciences and Technology Group Ltd doesn't have a profitable business model yet: FY2015 ROIC is -12.3%
- The company operates at negative EBITDA Margin: -8.9%
- Hong Kong Life Sciences and Technology Group Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -9.0% for the sames years0
- Hong Kong Life Sciences and Technology Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's in pair with industry average of 15.3%.
- CAPEX is quite volatile: 17.9 in FY2015, 8.5 in FY2014, 13.2 in FY2013, 5.0 in FY2012, 9.5 in FY2011
- The company has unprofitable business model: ROIC is at -12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hong Kong Life Sciences and Technology Group Ltd ($8085) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 79.7 | 71.7 | 39.2 | 679.9 | 320.1 | -52.9% |
| Gross Profit | 33.8 | 28.2 | 2.7 | 14.6 | 26.9 | 84.2% |
| SG&A | | | | | 65.4 | |
| EBITDA | 4.0 | -0.5 | -34.5 | -48.2 | -28.5 | -40.9% |
| Net Income | -8.9 | -28.4 | -35.6 | -152.2 | -81.1 | -46.7% |
Balance Sheet
|
|---|
| Cash | 100.0 | 108.9 | 29.2 | 47.7 | 12.1 | -74.6% |
| Short Term Debt | 4.7 | 18.5 | 35.9 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 9.5 | 5.0 | 13.2 | 8.5 | 17.9 | 111.6% |
Ratios
|
|---|
| Revenue growth | 7.0% | -10.0% | -45.4% | 1,636.5% | -52.9% | |
| EBITDA growth | -34.9% | -111.9% | 7,084.6% | 39.8% | -40.9% | |
| Gross Margin | 42.5% | 39.4% | 6.8% | 2.2% | 8.4% | 6.3% |
| EBITDA Margin | 5.1% | -0.7% | -88.1% | -7.1% | -8.9% | -1.8% |
| Net Income Margin | -11.2% | -39.7% | -91.0% | -22.4% | -25.3% | -3.0% |
| SG&A, % of revenue | | | | | 20.4% | 20.4% |
| CAPEX, % of revenue | 11.9% | 7.0% | 33.6% | 1.2% | 5.6% | 4.4% |
| ROIC | -1.2% | -2.5% | -10.6% | -14.1% | -12.3% | 1.8% |
| ROE | -3.6% | -10.4% | -10.1% | -37.8% | -23.9% | 13.9% |
| Net Debt/EBITDA | -23.6x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 52.9% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.4 pp from 16.2% to 17.7% in 2015.
Gross Margin increased on 6.3 pp from 2.2% to 8.4% in FY2015.
Net Income marign decreased on 3.0 pp from -22.4% to -25.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 5.6%. CAPEX/Revenue decreased slightly on 1.4 pp from 7.0% in FY2012 to 5.6% in FY2015. It's average CAPEX/Revenue for the last three years was 13.5%.
Return on investment
The company operates at negative ROIC (-12.33%) and ROE (-23.94%). ROIC increased slightly on 1.8 pp from -14.1% to -12.3% in FY2015. ROE jumped on 13.9 pp from -37.8% to -23.9% in FY2015.
Leverage (Debt)
The company has no debt. Cash dropped on 74.6% in FY2015.
Appendix 1: Peers in Pharmaceuticals
Below you can find Hong Kong Life Sciences and Technology Group Ltd benchmarking vs. other companies in Pharmaceuticals 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| Tianda Pharmaceuticals Ltd ($455) | 25.0% | -6.2% | 85.3% | 37.2% | |
| |
|---|
| Median (38 companies) | 15.1% | 14.3% | 13.7% | 15.3% | |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | -10.0% | -45.4% | 1,636.5% | -52.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 83.9% | 82.0% | 81.5% | 80.9% | |
| Consun Pharmaceutical Group Ltd ($1681) | 75.5% | 75.7% | 79.1% | 78.3% | |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 78.5% | 77.5% | 76.4% | |
| China Health Group Inc ($8225) | 38.7% | 43.4% | 33.6% | 76.2% | |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 72.6% | 65.2% | 77.9% | 72.1% | |
| |
|---|
| Median (36 companies) | 37.2% | 37.9% | 37.2% | 48.7% | |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | 42.5% | 39.4% | 6.8% | 2.2% | 8.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Resources Holdings Ltd ($899) | 3.5% | -80.8% | 25.1% | 113.7% | |
| Pak Fah Yeow International Ltd ($239) | 28.7% | 33.9% | 28.4% | 52.4% | |
| Real Nutriceutical Group Ltd ($2010) | 45.6% | 42.8% | 43.4% | 46.0% | |
| China Shineway Pharmaceutical Group Ltd ($2877) | 47.8% | 37.8% | 40.1% | 40.5% | |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 6.2% | 21.5% | 35.9% | 38.9% | |
| |
|---|
| Median (37 companies) | 17.4% | 19.6% | 18.8% | 20.8% | |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | 5.1% | -0.7% | -88.1% | -7.1% | -8.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 0.2% | | 11,100.0% | 103.4% | |
| Extrawell Pharmaceutical Holdings Ltd ($858) | 5.7% | 1.7% | 20.6% | 92.4% | |
| Asia Resources Holdings Ltd ($899) | 12.2% | 4.4% | 8.1% | 92.0% | |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 19.5% | 16.8% | 52.4% | 39.6% | |
| Hao Wen Holdings Ltd ($8019) | 6.4% | 30.0% | 2.3% | 38.2% | |
| |
|---|
| Median (37 companies) | 8.6% | 8.3% | 6.9% | 7.4% | |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | 11.9% | 7.0% | 33.6% | 1.2% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 18.5% | 16.7% | 20.8% | 33.0% | |
| Sino Biopharmaceutical Ltd ($1177) | 19.9% | 26.2% | 26.8% | 26.5% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 31.3% | 26.1% | 22.0% | 22.4% | |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 34.4% | 27.6% | 22.2% | 19.9% | |
| CSPC Pharmaceutical Group Ltd ($1093) | 9.9% | 14.5% | 12.8% | 18.1% | |
| |
|---|
| Median (38 companies) | 8.7% | 12.1% | 9.2% | 10.0% | |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | -1.2% | -2.5% | -10.6% | -14.1% | -12.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China NT Pharma Group Co Ltd ($1011) | 0.4x | | | 7.2x | |
| United Laboratories International Holdings Ltd/The ($3933) | 4.4x | 6.5x | 4.6x | 4.2x | |
| Lansen Pharmaceutical Holdings Ltd ($503) | 0.9x | 1.7x | 2.8x | 3.4x | |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 2.5x | 5.4x | 4.0x | 3.4x | |
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 1.4x | 3.5x | 3.4x | 2.8x | |
| |
|---|
| Median (31 companies) | 0.1x | 0.0x | -0.1x | -0.5x | |
|---|
