China Medical System Holdings Ltd revenue surged on 20.7% in 2015 while EBITDA Margin decreased on 7.1 pp from 39.4% to 32.3%
21/03/2016 • About China Medical System Holdings Ltd (
$867) • By InTwits
China Medical System Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Medical System Holdings Ltd is a fast growth stock: 2015 revenue growth was 20.7%, 5 year revenue CAGR was 31.8% at 2015 ROIC 20.5%
- China Medical System Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's in pair with industry average of 8.2%.
- CAPEX is quite volatile: 43.5 in 2015, 65.2 in 2014, 148 in 2013, 36.3 in 2012, 89.2 in 2011
- The company has highly profitable business model: ROIC is at 20.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Medical System Holdings Ltd ($867) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,360 | 1,779 | 2,249 | 2,945 | 3,553 | 20.7% |
| Gross Profit | 770 | 1,046 | 1,226 | 1,655 | 2,046 | 23.7% |
| SG&A | 377 | 482 | 613 | 783 | 1,007 | 28.6% |
| EBITDA | 430 | 614 | 729 | 1,160 | 1,148 | -1.0% |
| Net Income | 403 | 537 | 636 | 1,046 | 996 | -4.8% |
Balance Sheet
|
|---|
| Cash | 617 | 668 | 488 | 244 | 509 | 108.8% |
| Short Term Debt | 252 | 404 | 314 | 484 | 464 | -4.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 89 | 36 | 148 | 65 | 43 | -33.3% |
Ratios
|
|---|
| Revenue growth | 52.0% | 30.8% | 26.5% | 31.0% | 20.7% | |
| EBITDA growth | 72.1% | 42.8% | 18.6% | 59.2% | -1.0% | |
| Gross Margin | 56.6% | 58.8% | 54.5% | 56.2% | 57.6% | 1.4% |
| EBITDA Margin | 31.6% | 34.5% | 32.4% | 39.4% | 32.3% | -7.1% |
| Net Income Margin | 29.6% | 30.2% | 28.3% | 35.5% | 28.0% | -7.5% |
| SG&A, % of revenue | 27.7% | 27.1% | 27.3% | 26.6% | 28.3% | 1.7% |
| CAPEX, % of revenue | 6.6% | 2.0% | 6.6% | 2.2% | 1.2% | -1.0% |
| ROIC | 19.7% | 19.4% | 20.2% | 27.4% | 20.5% | -7.0% |
| ROE | 21.2% | 20.3% | 21.0% | 28.8% | 21.4% | -7.4% |
| Net Debt/EBITDA | -0.8x | -0.4x | -0.2x | 0.2x | -0.0x | -0.2x |
Revenue and profitability
China Medical System Holdings Ltd's Revenue surged on 20.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 2.0 pp from 2.9% to 4.9% in FY2015.
Gross Margin increased slightly on 1.4 pp from 56.2% to 57.6% in 2015. SG&A as a % of Revenue increased slightly on 1.7 pp from 26.6% to 28.3% in 2015.
Net Income marign decreased on 7.5 pp from 35.5% to 28.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.2% in 2015. The company showed small CAPEX/Revenue decline of 0.82 pp from 2.0% in 2012 to 1.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at high and attractive ROIC (20.47%) and ROE (21.45%). ROIC decreased on 7.0 pp from 27.4% to 20.5% in 2015. ROE decreased on 7.4 pp from 28.8% to 21.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.4x. Net Debt / EBITDA dropped on 0.2x from 0.2x to -0.039x in 2015. Debt decreased on 4.2% in 2015 while cash surged on 109% in 2015.
Management team
The company's CEO Lam Kong has spent 11 years at the company. The company's CFO is Chen Yanling. Chen Yanling has 11 years tenure at the company.
Appendix 1: Peers in Healthcare-Products
Below we provide China Medical System Holdings Ltd benchmarking against other companies in Healthcare-Products 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 |
|---|
| Microport Scientific Corp ($853) | 20.9% | 13.5% | 2.8% | 134.3% | |
| PW Medtech Group Ltd ($1358) | 188.2% | 89.2% | 37.9% | 33.0% | |
| Lifetech Scientific Corp ($1302) | 34.0% | 29.3% | 27.3% | 22.4% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 29.2% | 16.0% | 25.1% | 14.4% | |
| Biosino Bio-Technology & Science Inc ($8247) | | 14.1% | 11.6% | 13.2% | 9.4% |
| |
|---|
| Median (14 companies) | 25.1% | 6.4% | 11.5% | 6.6% | 3.1% |
|---|
| China Medical System Holdings Ltd ($867) | | 30.8% | 26.5% | 31.0% | 20.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lifetech Scientific Corp ($1302) | 80.5% | 80.1% | 81.6% | 81.4% | |
| PW Medtech Group Ltd ($1358) | 62.3% | 66.0% | 67.9% | 72.8% | |
| Golden Meditech Holdings Ltd ($801) | 57.5% | 69.1% | 69.8% | 70.2% | 72.8% |
| Microport Scientific Corp ($853) | 83.7% | 83.6% | 81.0% | 68.5% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 55.3% | 57.3% | 59.1% | 58.8% | |
| |
|---|
| Median (14 companies) | 42.6% | 39.9% | 48.1% | 46.4% | 30.5% |
|---|
| China Medical System Holdings Ltd ($867) | 56.6% | 58.8% | 54.5% | 56.2% | 57.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| PW Medtech Group Ltd ($1358) | 42.3% | 44.2% | 30.6% | 41.6% | |
| Golden Meditech Holdings Ltd ($801) | 42.5% | 41.4% | 37.9% | 29.8% | -31.7% |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 31.3% | 28.5% | 28.0% | 29.0% | |
| Hengan International Group Co Ltd ($1044) | 20.8% | 27.4% | 25.3% | 25.3% | |
| Lifetech Scientific Corp ($1302) | 17.2% | 31.6% | 24.5% | 23.4% | |
| |
|---|
| Median (14 companies) | 17.2% | 15.6% | 18.5% | 11.1% | -24.7% |
|---|
| China Medical System Holdings Ltd ($867) | 31.6% | 34.5% | 32.4% | 39.4% | 32.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| PW Medtech Group Ltd ($1358) | 21.1% | 14.8% | 22.3% | 30.2% | |
| Golden Meditech Holdings Ltd ($801) | 9.5% | 12.7% | 51.2% | 27.3% | 26.1% |
| Microport Scientific Corp ($853) | 18.5% | 31.6% | 27.9% | 15.0% | |
| Arts Optical International Hldgs ($1120) | 5.6% | 14.0% | 4.5% | 14.0% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 41.7% | 26.0% | 20.2% | 11.7% | |
| |
|---|
| Median (14 companies) | 9.5% | 8.2% | 5.9% | 5.9% | 3.3% |
|---|
| China Medical System Holdings Ltd ($867) | 6.6% | 2.0% | 6.6% | 2.2% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lifetech Scientific Corp ($1302) | 13.0% | 17.5% | 15.9% | 21.2% | |
| Hengan International Group Co Ltd ($1044) | 16.9% | 19.5% | 14.9% | 14.0% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 14.6% | 10.5% | 11.7% | 12.8% | |
| PW Medtech Group Ltd ($1358) | 30.9% | 30.7% | 9.2% | 10.0% | |
| Arts Optical International Hldgs ($1120) | 8.8% | 3.9% | 2.6% | 8.4% | |
| |
|---|
| Median (14 companies) | 12.1% | 5.3% | 6.9% | 5.0% | -7.7% |
|---|
| China Medical System Holdings Ltd ($867) | 19.7% | 19.4% | 20.2% | 27.4% | 20.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Fortune Investments Holdings Ltd ($8116) | 18.2x | | 2.9x | 93.0x | |
| Techcomp Holdings Ltd ($1298) | 1.7x | 4.3x | 3.6x | 2.7x | 3.0x |
| Hengan International Group Co Ltd ($1044) | 0.9x | 1.4x | 1.7x | 1.8x | |
| PW Medtech Group Ltd ($1358) | -0.8x | -1.2x | -7.5x | -0.3x | |
| Biosino Bio-Technology & Science Inc ($8247) | -1.3x | -1.1x | -1.7x | -1.5x | -2.0x |
| |
|---|
| Median (10 companies) | -1.3x | -1.2x | -1.6x | -1.5x | -2.0x |
|---|
| China Medical System Holdings Ltd ($867) | -0.8x | -0.4x | -0.2x | 0.2x | -0.0x |
