CSPC Pharmaceutical Group Ltd Net Income surged on 31.3% in 2015 and Revenue increased on 4.0%
21/03/2016 • About CSPC Pharmaceutical Group Ltd (
$1093) • By InTwits
CSPC Pharmaceutical Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CSPC Pharmaceutical Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.8%. At the same time it's in pair with industry average of 8.9%.
- CAPEX is quite volatile: 823 in 2015, 807 in 2014, 630 in 2013, 204 in 2012, 323 in 2011
- The company has highly profitable business model: ROIC is at 21.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CSPC Pharmaceutical Group Ltd ($1093) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,407 | 4,146 | 9,949 | 10,955 | 11,394 | 4.0% |
| Gross Profit | 1,037 | 1,805 | 3,133 | 4,187 | 5,221 | 24.7% |
| SG&A | 591 | 993 | 1,921 | 2,340 | 2,802 | 19.8% |
| EBITDA | 505 | 946 | 1,813 | 2,281 | 2,765 | 21.2% |
| Net Income | 355 | 2,162 | 973 | 1,268 | 1,665 | 31.3% |
Balance Sheet
|
|---|
| Cash | 310 | 1,450 | 1,188 | 1,468 | 2,299 | 56.6% |
| Short Term Debt | 284 | 1,817 | 660 | 624 | 452 | -27.6% |
| Long Term Debt | 62 | 499 | 680 | 602 | 1,011 | 68.0% |
Cash flow
|
|---|
| Capex | 323 | 204 | 630 | 807 | 823 | 2.0% |
Ratios
|
|---|
| Revenue growth | -69.0% | 72.2% | 139.9% | 10.1% | 4.0% | |
| EBITDA growth | -68.2% | 87.2% | 91.7% | 25.8% | 21.2% | |
| Gross Margin | 43.1% | 43.5% | 31.5% | 38.2% | 45.8% | 7.6% |
| EBITDA Margin | 21.0% | 22.8% | 18.2% | 20.8% | 24.3% | 3.4% |
| Net Income Margin | 14.8% | 52.1% | 9.8% | 11.6% | 14.6% | 3.0% |
| SG&A, % of revenue | 24.6% | 23.9% | 19.3% | 21.4% | 24.6% | 3.2% |
| CAPEX, % of revenue | 13.4% | 4.9% | 6.3% | 7.4% | 7.2% | -0.1% |
| ROIC | 9.9% | 14.5% | 12.8% | 18.1% | 21.7% | 3.6% |
| ROE | 10.6% | 57.4% | 13.9% | 16.3% | 19.8% | 3.5% |
| Net Debt/EBITDA | 0.1x | 0.9x | 0.1x | -0.1x | -0.3x | -0.2x |
Revenue and profitability
The company's Revenue increased on 4.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 24.7% to 26.7% in 2015.
Gross Margin increased on 7.6 pp from 38.2% to 45.8% in 2015. SG&A as a % of Revenue increased on 3.2 pp from 21.4% to 24.6% in 2015.
Net Income marign increased on 3.0 pp from 11.6% to 14.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 CSPC Pharmaceutical Group Ltd had CAPEX/Revenue of 7.2%. CSPC Pharmaceutical Group Ltd's CAPEX/Revenue increased on 2.3 pp from 4.9% in 2012 to 7.2% in 2015. It's average CAPEX/Revenue for the last three years was 7.0%.
Return on investment
The company operates at high and attractive ROIC (21.67%) while ROE is a bit lower (19.80%). ROIC increased on 3.6 pp from 18.1% to 21.7% in 2015. ROE increased on 3.5 pp from 16.3% to 19.8% in 2015.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.1x to -0.3x in 2015. Debt jumped on 19.3% in 2015 while cash jumped on 56.6% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below you can find CSPC Pharmaceutical 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 |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | -10.0% | -45.4% | 1,636.5% | -52.9% |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | | 15.1% | -99.9% | 480.0% | -93.1% |
| 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 (41 companies) | 18.0% | 13.4% | 13.5% | 16.8% | 12.8% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | | 72.2% | 139.9% | 10.1% | 4.0% |
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% | 75.7% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 72.6% | 65.2% | 77.9% | 72.1% | 68.7% |
| |
|---|
| Median (39 companies) | 37.6% | 38.5% | 37.8% | 49.1% | 49.4% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 43.1% | 43.5% | 31.5% | 38.2% | 45.8% |
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% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 29.7% | 41.3% | 45.4% | 47.5% | 49.1% |
| Real Nutriceutical Group Ltd ($2010) | 45.6% | 42.8% | 43.4% | 46.0% | |
| |
|---|
| Median (40 companies) | 17.2% | 19.0% | 20.2% | 21.4% | 17.1% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 21.0% | 22.8% | 18.2% | 20.8% | 24.3% |
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% | 0.0% |
| 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 (40 companies) | 9.4% | 8.5% | 8.9% | 7.3% | 2.7% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 13.4% | 4.9% | 6.3% | 7.4% | 7.2% |
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% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | | 25.3% | 27.5% | 23.8% | 25.9% |
| 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% | |
| |
|---|
| Median (41 companies) | 8.5% | 12.2% | 9.2% | 10.6% | 4.4% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 9.9% | 14.5% | 12.8% | 18.1% | 21.7% |
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 (33 companies) | -0.8x | -0.4x | -0.6x | -0.6x | -1.7x |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 0.1x | 0.9x | 0.1x | -0.1x | -0.3x |
