China Traditional Chinese Medicine Co Ltd reports 125% CAPEX growth and 40.0% Revenue growth
22/03/2016 • About China Traditional Chinese Medicine Co Ltd (
$570) • By InTwits
China Traditional Chinese Medicine Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Traditional Chinese Medicine Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 8.9%.
- CAPEX is quite volatile: 238 in 2015, 106 in 2014, 93.5 in 2013, 100 in 2012, 86.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.4x while industry average is 0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Traditional Chinese Medicine Co Ltd ($570) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 844 | 1,032 | 1,395 | 2,650 | 3,709 | 40.0% |
| Gross Profit | 455 | 564 | 826 | 1,643 | 2,194 | 33.5% |
| SG&A | 347 | 319 | 531 | 1,125 | 1,581 | 40.5% |
| EBITDA | 131 | 253 | 332 | 671 | 820 | 22.2% |
| Net Income | 60 | 168 | 198 | 413 | 622 | 50.5% |
Balance Sheet
|
|---|
| Cash | 38 | 133 | 350 | 440 | 2,138 | 386.2% |
| Short Term Debt | 276 | 411 | 584 | 502 | 1,600 | 219.0% |
| Long Term Debt | 0 | 0 | 668 | 671 | 850 | 26.8% |
Cash flow
|
|---|
| Capex | 87 | 100 | 93 | 106 | 238 | 124.7% |
Ratios
|
|---|
| Revenue growth | 3.1% | 22.3% | 35.2% | 90.0% | 40.0% | |
| EBITDA growth | -12.1% | 92.8% | 31.4% | 102.2% | 22.2% | |
| Gross Margin | 54.0% | 54.7% | 59.2% | 62.0% | 59.1% | -2.9% |
| EBITDA Margin | 15.5% | 24.5% | 23.8% | 25.3% | 22.1% | -3.2% |
| Net Income Margin | 7.1% | 16.3% | 14.2% | 15.6% | 16.8% | 1.2% |
| SG&A, % of revenue | 41.1% | 30.9% | 38.1% | 42.4% | 42.6% | 0.2% |
| CAPEX, % of revenue | 10.3% | 9.7% | 6.7% | 4.0% | 6.4% | 2.4% |
| ROIC | 8.4% | 17.6% | 9.3% | 12.2% | 6.5% | -5.7% |
| ROE | 8.1% | 21.0% | 11.1% | 13.9% | 8.7% | -5.2% |
| Net Debt/EBITDA | 1.8x | 1.1x | 2.7x | 1.1x | 0.4x | -0.7x |
Revenue and profitability
China Traditional Chinese Medicine Co Ltd's Revenue surged on 40.0% 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 decreased on 2.9 pp from 62.0% to 59.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased slightly on 1.2 pp from 15.6% to 16.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 6.4%. CAPEX/Revenue decreased on 3.3 pp from 9.7% in 2012 to 6.4% in 2015. Average CAPEX/Revenue for the last three years was 5.7%.
Return on investment
The company operates at low ROIC (6.49%) and ROE (8.69%). ROIC decreased on 5.7 pp from 12.2% to 6.5% in 2015. ROE decreased on 5.2 pp from 13.9% to 8.7% in 2015.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 1.1x to 0.4x in 2015. Debt jumped on 109% in 2015 while cash jumped on 386% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below you can find China Traditional Chinese Medicine Co 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% |
| Dragonite International Ltd ($329) | -8.8% | -10.5% | 13.5% | 64.8% | |
| Tianda Pharmaceuticals Ltd ($455) | | -6.2% | 85.3% | 37.2% | -43.6% |
| |
|---|
| Median (41 companies) | 25.8% | 13.4% | 13.5% | 15.7% | 11.3% |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | | 22.3% | 35.2% | 90.0% | 40.0% |
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% | 35.9% | 48.3% | 48.9% |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | 54.0% | 54.7% | 59.2% | 62.0% | 59.1% |
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) | 17.7% | 19.0% | 19.3% | 21.1% | 19.0% |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | 15.5% | 24.5% | 23.8% | 25.3% | 22.1% |
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% | 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) | 9.8% | 8.2% | 8.9% | 7.5% | 3.3% |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | 10.3% | 9.7% | 6.7% | 4.0% | 6.4% |
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) | 9.1% | 12.2% | 9.2% | 10.6% | 6.7% |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | 8.4% | 17.6% | 9.3% | 12.2% | 6.5% |
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 | 4.0x |
| 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 | -1.5x |
|---|
| China Traditional Chinese Medicine Co Ltd ($570) | 1.8x | 1.1x | 2.7x | 1.1x | 0.4x |
