China Vanguard Group Ltd reports 29.2% revenue growth in FY2015 and 7.1 pp EBITDA Margin decline from 30.0% to 22.9%
30/09/2015 • About China Vanguard Group Ltd (
$8156) • By InTwits
China Vanguard Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Vanguard Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.9%. At the same time it's a lot of higher than industry average of 11.2%.
- CAPEX is quite volatile: 5.2 in FY2015, 3.9 in FY2014, 22.8 in FY2013, 5.3 in FY2012, 3.5 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Vanguard Group Ltd ($8156) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 112.7 | 104.8 | 39.1 | 95.8 | 123.7 | 29.2% |
| Gross Profit | 73.3 | 66.9 | 34.5 | 89.8 | 117.8 | 31.2% |
| SG&A | | | 70.5 | 68.4 | 94.5 | 38.1% |
| EBITDA | 3.2 | -15.8 | -20.2 | 28.7 | 28.4 | -1.3% |
| Net Income | 61.4 | -1,107.5 | -41.6 | 14.9 | 19.1 | 28.3% |
Balance Sheet
|
|---|
| Cash | 68.2 | 81.2 | 3.6 | 151.9 | 92.9 | -38.8% |
| Short Term Debt | 60.4 | 32.4 | 54.2 | 0.0 | 0.0 | |
| Long Term Debt | 8.2 | 74.3 | 76.4 | 64.3 | 73.2 | 13.9% |
Cash flow
|
|---|
| Capex | 3.5 | 5.3 | 22.8 | 3.9 | 5.2 | 35.3% |
Ratios
|
|---|
| Revenue growth | 15.6% | -7.0% | -62.7% | 145.0% | 29.2% | |
| EBITDA growth | -124.6% | -591.3% | 28.3% | -242.0% | -1.3% | |
| Gross Margin | 65.0% | 63.8% | 88.2% | 93.8% | 95.2% | 1.4% |
| EBITDA Margin | 2.8% | -15.0% | -51.8% | 30.0% | 22.9% | -7.1% |
| Net Income Margin | 54.5% | -1,056.4% | -106.5% | 15.5% | 15.4% | -0.1% |
| SG&A, % of revenue | | | 180.4% | 71.4% | 76.4% | 4.9% |
| CAPEX, % of revenue | 3.1% | 5.0% | 58.3% | 4.0% | 4.2% | 0.2% |
| ROIC | -0.8% | -4.3% | -14.3% | 7.6% | 5.7% | -1.9% |
| ROE | 4.6% | -186.6% | -91.7% | 8.1% | 5.7% | -2.4% |
| Net Debt/EBITDA | 0.1x | | | -3.0x | -0.7x | 2.4x |
Revenue and profitability
The company's Revenue surged on 29.2% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 7.1 pp from 30.0% to 22.9% in FY2015.
Gross Margin increased slightly on 1.4 pp from 93.8% to 95.2% in FY2015. SG&A as a % of Revenue increased on 4.9 pp from 71.4% to 76.4% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
China Vanguard Group Ltd's CAPEX/Revenue was 4.2% in FY2015. CAPEX/Revenue decreased slightly on 0.80 pp from 5.0% in FY2012 to 4.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 22.2%.
Return on investment
The company operates at low ROIC (5.75%) and ROE (5.68%). ROIC decreased slightly on 1.9 pp from 7.6% to 5.7% in FY2015. ROE decreased on 2.4 pp from 8.1% to 5.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is 2.6x. Net Debt / EBITDA surged on 2.4x from -3.0x to -0.7x in FY2015. Debt surged on 13.9% in FY2015 while cash dropped on 38.8% in FY2015.
Appendix 1: Peers in Entertainment
Below we provide China Vanguard 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) | | -67.2% | 295.2% | 185.2% | -44.3% |
| Universe International Holdings Ltd ($1046) | | -42.2% | 4.3% | 159.4% | 46.3% |
| 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% | |
| Global Digital Creations Holdings Ltd ($8271) | 163.6% | 17.3% | 44.8% | 27.2% | |
| |
|---|
| Median (26 companies) | 20.3% | 2.9% | 14.1% | -1.8% | -4.3% |
|---|
| China Vanguard Group Ltd ($8156) | | -7.0% | -62.7% | 145.0% | 29.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amax International Holdings Ltd ($959) | | | 92.1% | 98.6% | 96.6% |
| 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% | |
| Nan Hai Corp Ltd ($680) | 62.2% | 62.2% | 65.3% | 65.8% | |
| |
|---|
| Median (22 companies) | 43.8% | 42.8% | 48.7% | 43.5% | 52.6% |
|---|
| China Vanguard Group Ltd ($8156) | 65.0% | 63.8% | 88.2% | 93.8% | 95.2% |
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% | |
| Neptune Group Ltd ($70) | 101.1% | 98.6% | 98.6% | 86.6% | 99.0% |
| Universe International Holdings Ltd ($1046) | 62.2% | 36.6% | 44.6% | 74.6% | 73.6% |
| 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% | |
| |
|---|
| Median (26 companies) | 14.2% | 22.1% | 19.7% | 14.9% | -17.0% |
|---|
| China Vanguard Group Ltd ($8156) | 2.8% | -15.0% | -51.8% | 30.0% | 22.9% |
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% | 8.1% |
|---|
| China Vanguard Group Ltd ($8156) | 3.1% | 5.0% | 58.3% | 4.0% | 4.2% |
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% |
| Neptune Group Ltd ($70) | 22.0% | 22.8% | 23.8% | 21.1% | 18.1% |
| 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% | -21.3% |
| SMI Holdings Group Ltd ($198) | 5.8% | 1.3% | 8.4% | 9.9% | |
| |
|---|
| Median (27 companies) | 2.8% | -1.1% | 3.7% | -0.9% | -1.8% |
|---|
| China Vanguard Group Ltd ($8156) | -0.8% | -4.3% | -14.3% | 7.6% | 5.7% |
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 | -0.0x | -0.5x |
|---|
| China Vanguard Group Ltd ($8156) | 0.1x | | | -3.0x | -0.7x |
