Neptune Group Ltd reports 657% Net Income decline and 33.3% Revenue decline
25/09/2015 • About Neptune Group Ltd (
$70) • By InTwits
Neptune Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Neptune Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 57.1%.
- CAPEX is quite volatile: 0 in FY2015, 0.17 in FY2014, 56.7 in FY2013, 0 in FY2012, 0.98 in FY2011
- The company has highly profitable business model: ROIC is at 18.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Neptune Group Ltd ($70) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 414.8 | 433.4 | 577.5 | 710.4 | 473.6 | -33.3% |
| SG&A | | 6.3 | 10.6 | 8.0 | 6.2 | -23.0% |
| EBITDA | 419.2 | 427.1 | 569.2 | 615.2 | 468.9 | -23.8% |
| Net Income | 201.1 | 282.9 | 288.3 | 148.8 | -828.0 | -656.6% |
Balance Sheet
|
|---|
| Cash | 7.5 | 119.5 | 95.6 | 45.2 | 58.2 | 28.8% |
| Short Term Debt | 0.0 | 0.0 | 23.2 | 20.9 | 18.8 | -10.1% |
| Long Term Debt | 21.5 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 1.0 | 0.0 | 56.7 | 0.2 | 0.0 | -100.0% |
Ratios
|
|---|
| Revenue growth | 6.9% | 4.5% | 33.3% | 23.0% | -33.3% | |
| EBITDA growth | -22.7% | 1.9% | 33.3% | 8.1% | -23.8% | |
| EBITDA Margin | 101.1% | 98.6% | 98.6% | 86.6% | 99.0% | 12.4% |
| Net Income Margin | 48.5% | 65.3% | 49.9% | 20.9% | -174.8% | -195.8% |
| SG&A, % of revenue | | 1.5% | 1.8% | 1.1% | 1.3% | 0.2% |
| CAPEX, % of revenue | 0.2% | 0.0% | 9.8% | 0.0% | 0.0% | -0.0% |
| ROIC | 22.0% | 22.8% | 23.8% | 21.1% | 18.1% | -3.0% |
| ROE | 18.3% | 21.7% | 17.7% | 7.8% | -52.4% | -60.2% |
| Net Debt/EBITDA | 0.0x | -0.3x | -0.1x | -0.0x | -0.1x | -0.0x |
Revenue and profitability
Neptune Group Ltd's Revenue dropped on 33.3% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 12.4 pp from 86.6% to 99.0% in FY2015.
SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign dropped on 196 pp from 20.9% to -175% in FY2015.
Return on investment
The company operates at low but positive ROIC (18.12%) and negative ROE (-52.44%). ROIC decreased on 3.0 pp from 21.1% to 18.1% in FY2015. ROE dropped on 60.2 pp from 7.8% to -52.4% in FY2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA decreased on 0.045x from -0.039x to -0.1x in FY2015. Debt dropped on 10.1% in FY2015 while cash jumped on 28.8% in FY2015.
Appendix 1: Peers in Entertainment
Below we provide Neptune Group Ltd benchmarking against other companies in Entertainment 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 3D Digital Entertainment Ltd ($8078) | -41.9% | -67.2% | 295.2% | 185.2% | |
| Universe International Holdings Ltd ($1046) | 10.2% | -42.2% | 4.3% | 159.4% | |
| China Vanguard Group Ltd ($8156) | 15.6% | -7.0% | -62.7% | 145.0% | |
| China LotSynergy Holdings Ltd ($1371) | 86.9% | 15.0% | 22.5% | 39.1% | |
| Nan Hai Corp Ltd ($680) | 20.7% | -16.3% | 18.7% | 36.0% | |
| |
|---|
| Median (26 companies) | 19.5% | -0.7% | 11.0% | -1.8% | -4.3% |
|---|
| Neptune Group Ltd ($70) | | 4.5% | 33.3% | 23.0% | -33.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amax International Holdings Ltd ($959) | | | 92.1% | 98.6% | 96.6% |
| China Vanguard Group Ltd ($8156) | 65.0% | 63.8% | 88.2% | 93.8% | |
| Cheung Wo International Holdings Ltd ($9) | 49.4% | -17.5% | 71.4% | 77.7% | |
| REXLot Holdings Ltd ($555) | 63.0% | 70.2% | 73.1% | 73.4% | |
| China LotSynergy Holdings Ltd ($1371) | 81.7% | 79.5% | 73.1% | 70.1% | |
| |
|---|
| Median (23 companies) | 46.1% | 44.8% | 52.7% | 44.0% | 57.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cheung Wo International Holdings Ltd ($9) | 7.8% | -62.7% | -217.3% | 104.5% | |
| Universe International Holdings Ltd ($1046) | 62.2% | 36.6% | 44.6% | 74.6% | |
| China LotSynergy Holdings Ltd ($1371) | 61.2% | 53.3% | 60.9% | 56.1% | |
| Haichang Holdings Ltd ($2255) | 46.9% | 55.0% | 44.5% | 46.3% | |
| SMI Holdings Group Ltd ($198) | 41.3% | 19.2% | 35.4% | 34.5% | |
| |
|---|
| Median (26 companies) | 10.3% | 19.7% | 17.2% | 14.9% | -17.0% |
|---|
| Neptune Group Ltd ($70) | 101.1% | 98.6% | 98.6% | 86.6% | 99.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Arts Entertainment and Culture Group Ltd ($8228) | 536.1% | 1,237.1% | 771.1% | 799.0% | |
| Cheung Wo International Holdings Ltd ($9) | 44.7% | 90.3% | 465.2% | 383.2% | |
| Alibaba Pictures Group Ltd ($1060) | 0.5% | 16.1% | 17.2% | 34.8% | |
| Mei Ah Entertainment Group Ltd ($391) | 2.5% | 6.8% | 3.6% | 25.4% | 1.8% |
| Nan Hai Corp Ltd ($680) | 29.1% | 19.2% | 35.2% | 18.2% | |
| |
|---|
| Median (26 companies) | 7.3% | 9.7% | 6.6% | 5.0% | 10.4% |
|---|
| Neptune Group Ltd ($70) | 0.2% | 0.0% | 9.8% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dynam Japan Holdings Co Ltd ($6889) | 22.5% | 23.8% | 25.4% | 21.8% | 10.5% |
| China LotSynergy Holdings Ltd ($1371) | 18.0% | 15.5% | 16.9% | 14.8% | |
| Pegasus Entertainment Holdings Ltd ($1326) | 94.5% | 82.1% | 18.5% | 10.3% | |
| SMI Holdings Group Ltd ($198) | 5.8% | 1.3% | 8.4% | 9.9% | |
| Haichang Holdings Ltd ($2255) | 6.2% | 7.1% | 8.1% | 8.6% | |
| |
|---|
| Median (27 companies) | 1.1% | -1.1% | 1.3% | -0.9% | -1.8% |
|---|
| Neptune Group Ltd ($70) | 22.0% | 22.8% | 23.8% | 21.1% | 18.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nan Hai Corp Ltd ($680) | 25.2x | 80.8x | 3.5x | 20.8x | |
| Cheung Wo International Holdings Ltd ($9) | 28.3x | | | 19.1x | |
| REXLot Holdings Ltd ($555) | 0.4x | -0.0x | -0.2x | 7.2x | |
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | -0.8x | 1.1x | 4.2x | 2.7x | |
| China 3D Digital Entertainment Ltd ($8078) | -11.9x | | -0.5x | 2.3x | |
| |
|---|
| Median (19 companies) | -0.3x | -0.1x | -0.6x | -0.3x | -5.9x |
|---|
| Neptune Group Ltd ($70) | 0.0x | -0.3x | -0.1x | -0.0x | -0.1x |
