Modern Media Holdings reports 44.6% Net Income decline and 1.3% Revenue decline
15/03/2016 • About Modern Media Holdings (
$72) • By InTwits
Modern Media Holdings reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Modern Media Holdings has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.3%. At the same time it's a lot of higher than industry average of 10.8%.
- CAPEX is quite volatile: 15.5 in 2015, 34.2 in 2014, 33.1 in 2013, 25.4 in 2012, 52.2 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
- It operates with high leverage: Net Debt/EBITDA is 1.0x while industry average is -0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Modern Media Holdings ($72) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 586.2 | 655.3 | 631.2 | 603.8 | 595.7 | -1.3% |
| Gross Profit | 334.5 | 376.9 | 352.1 | 335.6 | 302.3 | -9.9% |
| SG&A | | 156.9 | 146.8 | 139.6 | 133.5 | -4.3% |
| EBITDA | 107.7 | 122.1 | 82.1 | 81.6 | 60.4 | -26.0% |
| Net Income | 60.3 | 65.3 | 33.2 | 37.8 | 20.9 | -44.6% |
Balance Sheet
|
|---|
| Cash | 142.5 | 140.5 | 128.7 | 104.4 | 61.5 | -41.1% |
| Short Term Debt | 35.7 | 34.0 | 46.8 | 68.0 | 93.5 | 37.4% |
| Long Term Debt | 13.1 | 11.4 | 9.5 | 48.3 | 26.9 | -44.4% |
Cash flow
|
|---|
| Capex | 52.2 | 25.4 | 33.1 | 34.2 | 15.5 | -54.7% |
Ratios
|
|---|
| Revenue growth | 28.5% | 11.8% | -3.7% | -4.3% | -1.3% | |
| EBITDA growth | 20.9% | 13.4% | -32.8% | -0.6% | -26.0% | |
| Gross Margin | 57.1% | 57.5% | 55.8% | 55.6% | 50.8% | -4.8% |
| EBITDA Margin | 18.4% | 18.6% | 13.0% | 13.5% | 10.1% | -3.4% |
| Net Income Margin | 10.3% | 10.0% | 5.3% | 6.3% | 3.5% | -2.7% |
| SG&A, % of revenue | | 23.9% | 23.3% | 23.1% | 22.4% | -0.7% |
| CAPEX, % of revenue | 8.9% | 3.9% | 5.2% | 5.7% | 2.6% | -3.1% |
| ROIC | 23.8% | 20.6% | 10.4% | 9.3% | 5.5% | -3.8% |
| ROE | 19.1% | 16.6% | 7.7% | 8.4% | 4.5% | -3.9% |
| Net Debt/EBITDA | -0.9x | -0.8x | -0.9x | 0.1x | 1.0x | 0.8x |
Revenue and profitability
Modern Media Holdings's Revenue decreased slightly on 1.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 23.8% to 26.2% in 2015.
Gross Margin decreased on 4.8 pp from 55.6% to 50.8% in 2015. SG&A as a % of Revenue decreased slightly on 0.71 pp from 23.1% to 22.4% in 2015.
Net Income marign decreased on 2.7 pp from 6.3% to 3.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.6% in 2015. CAPEX/Revenue decreased slightly on 1.3 pp from 3.9% in 2012 to 2.6% in 2015. Average CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at low ROIC (5.51%) and ROE (4.50%). ROIC decreased on 3.8 pp from 9.3% to 5.5% in 2015. ROE decreased on 3.9 pp from 8.4% to 4.5% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 0.8x from 0.1x to 1.0x in 2015. Debt increased on 3.4% in 2015 while cash dropped on 41.1% in 2015.
Appendix 1: Peers in Media
Below we provide Modern Media Holdings benchmarking against other companies in Media 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 |
|---|
| CMMB Vision Holdings Ltd ($471) | | | 168.1% | 27.8% | |
| Culturecom Holdings Ltd ($343) | | -24.2% | -7.7% | 16.4% | -20.3% |
| Sing Pao Media Enterprises Ltd ($8010) | 20.7% | 15.3% | 26.9% | 9.7% | |
| Focus Media Network Ltd ($8112) | 23.7% | -10.6% | 34.6% | 5.6% | |
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
| |
|---|
| Median (19 companies) | 11.4% | 4.0% | -1.8% | -3.9% | -9.4% |
|---|
| Modern Media Holdings ($72) | | 11.8% | -3.7% | -4.3% | -1.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | 94.4% |
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | |
| Next Media Ltd ($282) | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% |
| |
|---|
| Median (16 companies) | 43.6% | 37.5% | 38.5% | 36.1% | 38.5% |
|---|
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | 50.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | 193.5% |
| Television Broadcasts Ltd ($511) | 45.2% | 43.2% | 42.3% | 37.3% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| |
|---|
| Median (19 companies) | 13.3% | 9.9% | 11.5% | 9.8% | 12.0% |
|---|
| Modern Media Holdings ($72) | 18.4% | 18.6% | 13.0% | 13.5% | 10.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | 85.2% |
| Culturecom Holdings Ltd ($343) | 12.5% | 10.2% | 38.6% | 24.5% | 7.0% |
| Phoenix Satellite Television Holdings Ltd ($2008) | 14.6% | 12.0% | 8.5% | 11.4% | |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% |
| V1 Group Ltd ($82) | 1.4% | 1.9% | 3.2% | 10.1% | |
| |
|---|
| Median (19 companies) | 4.0% | 2.7% | 5.3% | 2.3% | 7.0% |
|---|
| Modern Media Holdings ($72) | 8.9% | 3.9% | 5.2% | 5.7% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Television Broadcasts Ltd ($511) | 26.5% | 23.8% | 22.4% | 15.1% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 21.5% | 18.5% | 18.4% | 11.7% | |
| Next Media Ltd ($282) | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% |
| |
|---|
| Median (19 companies) | 7.9% | 3.7% | 4.3% | 2.6% | 4.0% |
|---|
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | 16.7x |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x |
| Next Media Ltd ($282) | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x |
| Hong Kong Economic Times Holdings Ltd ($423) | -0.8x | -1.3x | -4.6x | -0.7x | -0.1x |
| |
|---|
| Median (13 companies) | -1.6x | -1.9x | -1.5x | -1.5x | 0.0x |
|---|
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | 1.0x |
