Evergrande Health Industry Group Ltd reports 779% Net Income growth while 8.7% Revenue decline
23/03/2016 • About Evergrande Health Industry Group Ltd (
$708) • By InTwits
Evergrande Health Industry Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Evergrande Health Industry Group Ltd doesn't have a profitable business model yet: 2015 ROIC is -7.1%
- EBITDA Margin is quite volatile: -3.1% in 2015, 8.1% in 2014, 10.4% in 2013, 9.9% in 2012, 12.2% in 2011
- Evergrande Health Industry Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.3%. At the same time it's a lot of higher than industry average of 8.5%.
- CAPEX is quite volatile: 56.2 in 2015, 13.3 in 2014, 12.0 in 2013, 73.7 in 2012, 279 in 2011
- The company has unprofitable business model: ROIC is at -7.1%
- It operates with high leverage: Net Debt/EBITDA is -1.3x while industry average is -1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Evergrande Health Industry Group Ltd ($708) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 480.9 | 504.8 | 495.2 | 455.6 | 416.2 | -8.7% |
| Gross Profit | 178.4 | 163.7 | 162.1 | 155.7 | 148.6 | -4.6% |
| SG&A | | | 137.0 | 144.9 | 195.0 | 34.6% |
| EBITDA | 58.6 | 50.0 | 51.3 | 36.8 | -12.8 | -134.6% |
| Net Income | 42.0 | 29.7 | 22.3 | 11.0 | 96.9 | 779.4% |
Balance Sheet
|
|---|
| Cash | 62.2 | 111.4 | 66.8 | 90.2 | 442.6 | 390.5% |
| Short Term Debt | 5.6 | 53.5 | 0.0 | 0.0 | 58.3 | |
| Long Term Debt | 53.4 | 0.0 | 0.0 | 0.0 | 124.9 | |
Cash flow
|
|---|
| Capex | 279.1 | 73.7 | 12.0 | 13.3 | 56.2 | 322.5% |
Ratios
|
|---|
| Revenue growth | 9.9% | 5.0% | -1.9% | -8.0% | -8.7% | |
| EBITDA growth | -6.6% | -14.8% | 2.7% | -28.3% | -134.6% | |
| Gross Margin | 37.1% | 32.4% | 32.7% | 34.2% | 35.7% | 1.5% |
| EBITDA Margin | 12.2% | 9.9% | 10.4% | 8.1% | -3.1% | -11.1% |
| Net Income Margin | 8.7% | 5.9% | 4.5% | 2.4% | 23.3% | 20.9% |
| SG&A, % of revenue | | | 27.7% | 31.8% | 46.8% | 15.0% |
| CAPEX, % of revenue | 58.0% | 14.6% | 2.4% | 2.9% | 13.5% | 10.6% |
| ROIC | 16.3% | 8.6% | 5.8% | 2.6% | -7.1% | -9.7% |
| ROE | 16.0% | 7.9% | 5.0% | 2.4% | 18.9% | 16.5% |
| Net Debt/EBITDA | -0.1x | -1.2x | -1.3x | -2.5x | | 2.5x |
Revenue and profitability
Evergrande Health Industry Group Ltd's Revenue decreased on 8.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 147 pp from -152% to -5.2% in FY2015.
Gross Margin increased slightly on 1.5 pp from 34.2% to 35.7% in 2015. SG&A as a % of Revenue jumped on 15.0 pp from 31.8% to 46.8% in 2015.
Net Income marign surged on 20.9 pp from 2.4% to 23.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 13.5%. CAPEX/Revenue decreased slightly on 1.1 pp from 14.6% in 2012 to 13.5% in 2015. It's average CAPEX/Revenue for the last three years was 6.3%.
Return on investment
The company operates at negative ROIC (-7.15%) and low but positive ROE (18.89%). ROIC decreased on 9.7 pp from 2.6% to -7.1% in 2015. ROE surged on 16.5 pp from 2.4% to 18.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is . Net Debt / EBITDA jumped on 2.5x from -2.5x to in 2015. Debt jumped while cash surged on 390% in 2015.
Appendix 1: Peers in Media
Below we provide Evergrande Health Industry Group Ltd benchmarking against other companies in Media 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 |
|---|
| SCMP Group Ltd ($583) | | 7.8% | 12.5% | -95.9% | 12.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
| Modern Media Holdings ($72) | | 11.8% | -3.7% | -4.3% | -1.3% |
| Focus Media Network Ltd ($8112) | | -10.6% | 34.6% | 5.6% | -5.2% |
| Sing Tao News Corp Ltd ($1105) | | -7.5% | -7.9% | -2.4% | -6.2% |
| |
|---|
| Median (15 companies) | 3.8% | 4.0% | -1.8% | -3.9% | -9.0% |
|---|
| Evergrande Health Industry Group Ltd ($708) | | 5.0% | -1.9% | -8.0% | -8.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | 94.4% |
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | 54.9% |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | 50.8% |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | 57.6% |
| |
|---|
| Median (16 companies) | 47.8% | 39.0% | 40.5% | 36.2% | 38.6% |
|---|
| Evergrande Health Industry Group Ltd ($708) | 37.1% | 32.4% | 32.7% | 34.2% | 35.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | 193.5% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | 14.1% |
| Oriental Press Group ($18) | 20.6% | 9.5% | 12.8% | 14.6% | 13.9% |
| |
|---|
| Median (15 companies) | 15.1% | 12.9% | 11.6% | 12.5% | 10.1% |
|---|
| Evergrande Health Industry Group Ltd ($708) | 12.2% | 9.9% | 10.4% | 8.1% | -3.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | 85.2% |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% |
| Hong Kong Economic Times Holdings Ltd ($423) | 9.0% | 8.4% | 8.5% | 1.3% | 10.0% |
| Tom Group Ltd ($2383) | 10.0% | 11.9% | 8.4% | 9.4% | 9.5% |
| Culturecom Holdings Ltd ($343) | 12.5% | 10.2% | 38.6% | 24.5% | 7.0% |
| |
|---|
| Median (15 companies) | 4.0% | 2.7% | 5.3% | 2.3% | 3.9% |
|---|
| Evergrande Health Industry Group Ltd ($708) | 58.0% | 14.6% | 2.4% | 2.9% | 13.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Next Media Ltd ($282) | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | 5.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | 23.3% | 11.5% | -1.5% | 3.2% | 5.2% |
| |
|---|
| Median (15 companies) | 7.9% | 3.7% | 4.3% | 2.6% | 3.2% |
|---|
| Evergrande Health Industry Group Ltd ($708) | 16.3% | 8.6% | 5.8% | 2.6% | -7.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | 16.7x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x |
| One Media Group Ltd ($426) | -3.8x | -2.3x | -0.6x | -1.1x | 1.5x |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | 1.0x |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| |
|---|
| Median (12 companies) | -1.6x | -1.9x | -1.3x | -1.1x | -0.2x |
|---|
