YuanShengTai Dairy Farm Ltd reports 84.2% Net Income decline and 11.2% Revenue decline
22/03/2016 • About YuanShengTai Dairy Farm Ltd (
$1431) • By InTwits
YuanShengTai Dairy Farm Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 35.4% in 2015, 47.1% in 2014, 48.4% in 2013, 40.3% in 2012, 147.8% in 2011
- YuanShengTai Dairy Farm Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 60.1%. At the same time it's a lot of higher than industry average of 14.1%.
- CAPEX is quite volatile: 310 in 2015, 505 in 2014, 161 in 2013, 180 in 2012, 272 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.8%
- It operates with high leverage: Net Debt/EBITDA is -2.6x while industry average is -2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
YuanShengTai Dairy Farm Ltd ($1431) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 149 | 689 | 881 | 1,163 | 1,033 | -11.2% |
| Gross Profit | 51 | 260 | 375 | 531 | 380 | -28.4% |
| SG&A | 13 | 36 | 54 | 70 | 101 | 44.5% |
| EBITDA | 220 | 278 | 427 | 548 | 365 | -33.3% |
| Net Income | 190 | 210 | 218 | 419 | 66 | -84.2% |
Balance Sheet
|
|---|
| Cash | 17 | 8 | 2,026 | 1,296 | 950 | -26.7% |
| Short Term Debt | 126 | 166 | 220 | 50 | 0 | -100.0% |
| Long Term Debt | 365 | 298 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 272 | 180 | 161 | 505 | 310 | -38.5% |
Ratios
|
|---|
| Revenue growth | 44,049.9% | 363.2% | 27.8% | 32.0% | -11.2% | |
| EBITDA growth | 4,313.6% | 26.3% | 53.6% | 28.4% | -33.3% | |
| Gross Margin | 34.5% | 37.8% | 42.6% | 45.7% | 36.8% | -8.9% |
| EBITDA Margin | 147.8% | 40.3% | 48.4% | 47.1% | 35.4% | -11.7% |
| Net Income Margin | 127.6% | 30.4% | 24.7% | 36.0% | 6.4% | -29.6% |
| SG&A, % of revenue | 8.4% | 5.2% | 6.1% | 6.0% | 9.7% | 3.8% |
| CAPEX, % of revenue | 182.5% | 26.1% | 18.3% | 43.4% | 30.1% | -13.4% |
| ROIC | 33.4% | 24.7% | 14.3% | 11.4% | 6.8% | -4.6% |
| ROE | 66.4% | 43.2% | 9.7% | 10.2% | 1.5% | -8.6% |
| Net Debt/EBITDA | 2.2x | 1.6x | -4.2x | -2.3x | -2.6x | -0.3x |
Revenue and profitability
YuanShengTai Dairy Farm Ltd's Revenue dropped on 11.2% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 11.7 pp from 47.1% to 35.4% in 2015.
Gross Margin decreased on 8.9 pp from 45.7% to 36.8% in 2015. SG&A as a % of Revenue increased on 3.8 pp from 6.0% to 9.7% in 2015.
Net Income marign dropped on 29.6 pp from 36.0% to 6.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 30.1% in 2015. CAPEX/Revenue increased on 4.0 pp from 26.1% in 2012 to 30.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 30.6%.Battling declining revenue the company invested a large share of EBITDA (85.0%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (6.77%) and ROE (1.51%). ROIC decreased on 4.6 pp from 11.4% to 6.8% in 2015. ROE decreased on 8.6 pp from 10.2% to 1.5% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash dropped on 26.7% in 2015.
Appendix 1: Peers in Food
Below you can find YuanShengTai Dairy Farm Ltd benchmarking vs. other companies in Food 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 |
|---|
| Wealth Glory Holdings Ltd ($8269) | | -16.5% | -53.8% | 555.7% | -12.4% |
| Natural Dairy NZ Holdings Ltd ($462) | | -47.2% | 19.1% | 76.6% | -54.8% |
| China Modern Dairy Holdings Ltd ($1117) | | 50.7% | 96.1% | 52.8% | -4.0% |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| Asia Cassava Resources Holdings Ltd ($841) | | -3.0% | 99.6% | 32.6% | -28.4% |
| |
|---|
| Median (37 companies) | 22.4% | 9.4% | 5.6% | 0.4% | -2.9% |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | | 363.2% | 27.8% | 32.0% | -11.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | |
| Shenguan Holdings Group Ltd ($829) | 61.9% | 58.2% | 58.5% | 54.9% | 44.2% |
| Yashili International Holdings Ltd ($1230) | 52.0% | 53.7% | 53.5% | 51.2% | 50.8% |
| Natural Dairy NZ Holdings Ltd ($462) | 16.3% | -13.7% | 27.5% | 48.8% | 49.6% |
| Christine International Holdings Ltd ($1210) | 51.3% | 50.2% | 49.7% | 47.2% | |
| |
|---|
| Median (37 companies) | 17.7% | 16.5% | 18.5% | 19.8% | 22.8% |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 34.5% | 37.8% | 42.6% | 45.7% | 36.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenguan Holdings Group Ltd ($829) | 57.2% | 58.7% | 59.2% | 54.5% | 43.6% |
| China Huishan Dairy Holdings Co Ltd ($6863) | 109.2% | 45.1% | 47.9% | 47.1% | 37.2% |
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | |
| China Modern Dairy Holdings Ltd ($1117) | 33.9% | 33.5% | 27.0% | 25.3% | 21.1% |
| Want Want China Holdings Ltd ($151) | 20.1% | 23.8% | 25.8% | 23.8% | 25.2% |
| |
|---|
| Median (37 companies) | 8.5% | 7.8% | 6.5% | 7.4% | 8.0% |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 147.8% | 40.3% | 48.4% | 47.1% | 35.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 453.6% | 98.2% | 29.8% | 132.0% | 109.8% |
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | |
| Yashili International Holdings Ltd ($1230) | 3.6% | 8.2% | 7.1% | 20.1% | 12.5% |
| Vedan International Holdings Ltd ($2317) | 2.8% | 2.5% | 2.4% | 18.8% | |
| China Modern Dairy Holdings Ltd ($1117) | 58.9% | 50.6% | | 18.7% | 42.4% |
| |
|---|
| Median (37 companies) | 3.6% | 5.9% | 5.6% | 5.1% | 5.2% |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 182.5% | 26.1% | 18.3% | 43.4% | 30.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | |
| Want Want China Holdings Ltd ($151) | 24.9% | 27.9% | 29.4% | 22.8% | 21.8% |
| Shenguan Holdings Group Ltd ($829) | 40.6% | 40.0% | 33.2% | 21.4% | 10.0% |
| Huisheng International Holdings Ltd ($1340) | 63.0% | 31.9% | 23.7% | 16.3% | |
| Asia Cassava Resources Holdings Ltd ($841) | 13.8% | 4.2% | 5.9% | 13.6% | 11.6% |
| |
|---|
| Median (38 companies) | 10.4% | 6.7% | 5.9% | 5.5% | 5.8% |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 33.4% | 24.7% | 14.3% | 11.4% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Yurun Food Group Ltd ($1068) | 0.4x | 40.7x | 6.9x | 9.4x | |
| Beijing Jingkelong Co Ltd ($814) | 3.4x | 5.0x | 4.8x | 5.3x | 9.3x |
| CP Lotus Corp ($121) | 2.3x | | 6.5x | 5.1x | 3.0x |
| DaChan Food Asia Ltd ($3999) | -0.3x | 0.1x | 1.3x | 4.8x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.3x | 1.8x | 3.8x | 4.5x | |
| |
|---|
| Median (29 companies) | -0.1x | -0.5x | 0.8x | 0.8x | 1.4x |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 2.2x | 1.6x | -4.2x | -2.3x | -2.6x |
