Hengan International Group Co Ltd EBITDA surged on 15.9% in 2015 and Revenue increased on 4.7%
22/03/2016 • About Hengan International Group Co Ltd (
$1044) • By InTwits
Hengan International Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hengan International Group Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.2%. At the same time it's in pair with industry average of 8.3%.
- CAPEX is quite volatile: 913 in 2015, 1,319 in 2014, 1,115 in 2013, 2,008 in 2012, 2,016 in 2011
- The company has highly profitable business model: ROIC is at 16.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hengan International Group Co Ltd ($1044) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14,157 | 15,068 | 16,793 | 18,935 | 19,820 | 4.7% |
| Gross Profit | 5,646 | 6,764 | 7,577 | 8,731 | 9,436 | 8.1% |
| SG&A | 3,203 | 3,253 | 4,033 | 4,919 | 4,822 | -2.0% |
| EBITDA | 2,947 | 4,129 | 4,251 | 4,791 | 5,552 | 15.9% |
| Net Income | 2,199 | 2,862 | 2,949 | 3,111 | 3,284 | 5.5% |
Balance Sheet
|
|---|
| Cash | 3,190 | 3,422 | 7,725 | 7,978 | 5,040 | -36.8% |
| Short Term Debt | 5,528 | 5,985 | 10,329 | 12,140 | 14,341 | 18.1% |
| Long Term Debt | 327 | 3,047 | 4,829 | 4,315 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 2,016 | 2,008 | 1,115 | 1,319 | 913 | -30.8% |
Ratios
|
|---|
| Revenue growth | 21.0% | 6.4% | 11.4% | 12.8% | 4.7% | |
| EBITDA growth | 2.0% | 40.1% | 3.0% | 12.7% | 15.9% | |
| Gross Margin | 39.9% | 44.9% | 45.1% | 46.1% | 47.6% | 1.5% |
| EBITDA Margin | 20.8% | 27.4% | 25.3% | 25.3% | 28.0% | 2.7% |
| Net Income Margin | 15.5% | 19.0% | 17.6% | 16.4% | 16.6% | 0.1% |
| SG&A, % of revenue | 22.6% | 21.6% | 24.0% | 26.0% | 24.3% | -1.6% |
| CAPEX, % of revenue | 14.2% | 13.3% | 6.6% | 7.0% | 4.6% | -2.4% |
| ROIC | 16.9% | 19.5% | 14.9% | 14.0% | 16.4% | 2.4% |
| ROE | 23.2% | 26.6% | 24.3% | 22.9% | 23.1% | 0.2% |
| Net Debt/EBITDA | 0.9x | 1.4x | 1.7x | 1.8x | 1.7x | -0.1x |
Revenue and profitability
Hengan International Group Co Ltd's Revenue increased on 4.7% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 13.5% to 9.6% in 2015.
Gross Margin increased slightly on 1.5 pp from 46.1% to 47.6% in 2015. SG&A as a % of Revenue decreased slightly on 1.6 pp from 26.0% to 24.3% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 4.6%. The company showed decline in CAPEX/Revenue of 8.7 pp from 13.3% in 2012 to 4.6% in 2015. For the last three years the average CAPEX/Revenue was 6.1%.
Return on investment
The company operates at high and attractive ROE (23.11%) while ROIC is a bit lower (16.39%). ROIC increased on 2.4 pp from 14.0% to 16.4% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 1.7x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from 1.8x to 1.7x in 2015. Debt dropped on 12.8% in 2015 while cash dropped on 36.8% in 2015.
Management team
Hui Lin Chit is a the company's CEO. Hui Lin Chit has spent 33 years at the company.
Appendix 1: Peers in Healthcare-Products
Below you can find Hengan International Group Co Ltd benchmarking vs. other companies in Healthcare-Products 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 |
|---|
| 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% | |
| China Medical System Holdings Ltd ($867) | | 30.8% | 26.5% | 31.0% | 20.7% |
| Lifetech Scientific Corp ($1302) | 34.0% | 29.3% | 27.3% | 22.4% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | | 16.0% | 25.1% | 14.4% | 12.1% |
| |
|---|
| Median (14 companies) | 27.4% | 13.5% | 16.0% | 6.6% | 5.7% |
|---|
| Hengan International Group Co Ltd ($1044) | | 6.4% | 11.4% | 12.8% | 4.7% |
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% | 59.4% |
| |
|---|
| Median (14 companies) | 55.3% | 45.1% | 52.9% | 48.2% | 32.3% |
|---|
| Hengan International Group Co Ltd ($1044) | 39.9% | 44.9% | 45.1% | 46.1% | 47.6% |
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% | |
| China Medical System Holdings Ltd ($867) | 31.6% | 34.5% | 32.4% | 39.4% | 32.3% |
| 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% | 27.8% |
| Lifetech Scientific Corp ($1302) | 17.2% | 31.6% | 24.5% | 23.4% | |
| |
|---|
| Median (14 companies) | 17.2% | 15.6% | 18.5% | 11.1% | 4.4% |
|---|
| Hengan International Group Co Ltd ($1044) | 20.8% | 27.4% | 25.3% | 25.3% | 28.0% |
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% | 18.3% |
| |
|---|
| Median (14 companies) | 7.2% | 3.7% | 5.9% | 4.8% | 3.3% |
|---|
| Hengan International Group Co Ltd ($1044) | 14.2% | 13.3% | 6.6% | 7.0% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Medical System Holdings Ltd ($867) | 19.7% | 19.4% | 20.2% | 27.4% | 20.5% |
| Lifetech Scientific Corp ($1302) | 13.0% | 17.5% | 15.9% | 21.2% | |
| Shandong Weigao Group Medical Polymer Co Ltd ($1066) | 14.6% | 10.5% | 11.7% | 12.8% | 11.8% |
| 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% | 1.0% |
|---|
| Hengan International Group Co Ltd ($1044) | 16.9% | 19.5% | 14.9% | 14.0% | 16.4% |
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 |
| China Medical System Holdings Ltd ($867) | -0.8x | -0.4x | -0.2x | 0.2x | -0.0x |
| 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 | -1.6x |
|---|
| Hengan International Group Co Ltd ($1044) | 0.9x | 1.4x | 1.7x | 1.8x | 1.7x |
