Hua Han Bio-Pharmaceutical Holdings Ltd reports 422% CAPEX growth while 2.1% Revenue decline
30/09/2015 • About Hua Han Bio-Pharmaceutical Holdings Ltd (
$587) • By InTwits
Hua Han Bio-Pharmaceutical Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 61.1% in FY2015, 28.8% in FY2014, 21.0% in FY2013, 60.6% in FY2012, 32.9% in FY2011
- Hua Han Bio-Pharmaceutical Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's in pair with industry average of 11.9%.
- CAPEX is quite volatile: 737 in FY2015, 141 in FY2014, 24.5 in FY2013, 11.8 in FY2012, 43.9 in FY2011
- The company has highly profitable business model: ROIC is at 13.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hua Han Bio-Pharmaceutical Holdings Ltd ($587) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,157 | 1,312 | 1,754 | 1,860 | 1,821 | -2.1% |
| Gross Profit | 840 | 856 | 1,367 | 1,342 | 1,250 | -6.8% |
| SG&A | 486 | 446 | 1,001 | 764 | 565 | -26.1% |
| EBITDA | 381 | 795 | 368 | 535 | 1,112 | 108.0% |
| Net Income | 442 | 657 | 223 | 341 | 649 | 90.0% |
Balance Sheet
|
|---|
| Cash | 1,457 | 2,095 | 2,799 | 2,725 | 6,599 | 142.1% |
| Short Term Debt | 33 | 32 | 25 | 38 | 31 | -17.3% |
| Long Term Debt | 1 | 0 | 0 | 0 | 609 | |
Cash flow
|
|---|
| Capex | 44 | 12 | 25 | 141 | 737 | 422.1% |
Ratios
|
|---|
| Revenue growth | 43.1% | 13.4% | 33.7% | 6.0% | -2.1% | |
| EBITDA growth | -0.7% | 108.9% | -53.7% | 45.3% | 108.0% | |
| Gross Margin | 72.6% | 65.2% | 77.9% | 72.1% | 68.7% | -3.5% |
| EBITDA Margin | 32.9% | 60.6% | 21.0% | 28.8% | 61.1% | 32.4% |
| Net Income Margin | 38.2% | 50.1% | 12.7% | 18.3% | 35.6% | 17.3% |
| SG&A, % of revenue | 42.0% | 34.0% | 57.1% | 41.1% | 31.0% | -10.1% |
| CAPEX, % of revenue | 3.8% | 0.9% | 1.4% | 7.6% | 40.5% | 32.9% |
| ROIC | 9.6% | 19.2% | 6.9% | 9.1% | 13.8% | 4.7% |
| ROE | 15.0% | 18.5% | 5.3% | 7.0% | 9.4% | 2.4% |
| Net Debt/EBITDA | -3.7x | -2.6x | -7.5x | -5.0x | -5.4x | -0.3x |
Revenue and profitability
Hua Han Bio-Pharmaceutical Holdings Ltd's Revenue decreased on 2.1% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 32.4 pp from 28.8% to 61.1% in FY2015.
Gross Margin decreased on 3.5 pp from 72.1% to 68.7% in FY2015. SG&A as a % of Revenue dropped on 10.1 pp from 41.1% to 31.0% in FY2015.
Net Income marign surged on 17.3 pp from 18.3% to 35.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 40.5%. The company's CAPEX/Revenue jumped on 39.6 pp from 0.90% in FY2012 to 40.5% in FY2015. For the last three years the average CAPEX/Revenue was 16.5%.Hua Han Bio-Pharmaceutical Holdings Ltd invested a big chunk of EBITDA (66.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROIC (13.81%) while ROE is low (9.41%). ROIC increased on 4.7 pp from 9.1% to 13.8% in FY2015. ROE increased on 2.4 pp from 7.0% to 9.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -5.4x and Debt / EBITDA is 0.6x. Net Debt / EBITDA dropped on 0.3x from -5.0x to -5.4x in FY2015. Debt surged on 1,592% in FY2015 while cash jumped on 142% in FY2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide Hua Han Bio-Pharmaceutical Holdings Ltd benchmarking against other companies in Pharmaceuticals 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 |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | -10.0% | -45.4% | 1,636.5% | -52.9% |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | -17.7% | 15.1% | -99.9% | 480.0% | |
| United Gene High-Tech Group Ltd ($399) | | -71.8% | -60.5% | 196.0% | 14.2% |
| 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% | |
| |
|---|
| Median (39 companies) | 18.0% | 15.1% | 13.5% | 16.8% | -29.1% |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | | 13.4% | 33.7% | 6.0% | -2.1% |
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% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 73.0% | 71.3% | 72.2% | 70.2% | |
| |
|---|
| Median (37 companies) | 37.6% | 38.5% | 35.9% | 48.3% | 24.0% |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 72.6% | 65.2% | 77.9% | 72.1% | 68.7% |
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% | |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 48.4% | 38.8% | 65.4% | 70.9% | |
| 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% | |
| |
|---|
| Median (38 companies) | 17.2% | 19.0% | 18.2% | 20.4% | -8.1% |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 32.9% | 60.6% | 21.0% | 28.8% | 61.1% |
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% | 3.6% |
| 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 (38 companies) | 10.6% | 8.5% | 8.9% | 7.2% | 2.7% |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 3.8% | 0.9% | 1.4% | 7.6% | 40.5% |
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% | |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 14.3% | 13.7% | 18.3% | 22.0% | |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 34.4% | 27.6% | 22.2% | 19.9% | |
| |
|---|
| Median (39 companies) | 8.5% | 12.0% | 9.2% | 10.6% | -9.4% |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 9.6% | 19.2% | 6.9% | 9.1% | 13.8% |
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) | -0.2x | 0.0x | -0.1x | -0.5x | 9.9x |
|---|
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | -3.7x | -2.6x | -7.5x | -5.0x | -5.4x |
