Pacific Online Ltd Net Income dropped on 18.7% in 2015 while Revenue surged on 11.0%
24/03/2016 • About Pacific Online Ltd (
$543) • By InTwits
Pacific Online Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pacific Online Ltd is a fast growth stock: 2015 revenue growth was 11.0%, 5 year revenue CAGR was 16.6% at 2015 ROIC 21.6%
- EBITDA Margin is declining: 22.0% in 2015 vs. 29.9% in 2014 vs. 45.5% in 2011
- Pacific Online Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 4.7%.
- CAPEX is quite volatile: 12.9 in 2015, 35.5 in 2014, 51.4 in 2013, 22.1 in 2012, 101 in 2011
- The company has highly profitable business model: ROIC is at 21.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pacific Online Ltd ($543) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 640 | 716 | 848 | 988 | 1,096 | 11.0% |
| Gross Profit | 442 | 508 | 598 | 665 | 711 | 6.9% |
| SG&A | 134 | 174 | 236 | 325 | 408 | 25.6% |
| EBITDA | 291 | 306 | 333 | 295 | 241 | -18.4% |
| Net Income | 229 | 236 | 254 | 221 | 180 | -18.7% |
Balance Sheet
|
|---|
| Cash | 430 | 437 | 438 | 392 | 411 | 4.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 101 | 22 | 51 | 36 | 13 | -63.7% |
Ratios
|
|---|
| Revenue growth | 25.9% | 11.8% | 18.5% | 16.5% | 11.0% | |
| EBITDA growth | 21.3% | 5.2% | 8.6% | -11.2% | -18.4% | |
| Gross Margin | 69.1% | 71.0% | 70.5% | 67.3% | 64.8% | -2.5% |
| EBITDA Margin | 45.5% | 42.8% | 39.2% | 29.9% | 22.0% | -7.9% |
| Net Income Margin | 35.8% | 33.0% | 29.9% | 22.4% | 16.4% | -6.0% |
| SG&A, % of revenue | 21.0% | 24.4% | 27.9% | 32.9% | 37.2% | 4.3% |
| CAPEX, % of revenue | 15.8% | 3.1% | 6.1% | 3.6% | 1.2% | -2.4% |
| ROIC | 41.7% | 37.9% | 36.4% | 28.6% | 21.6% | -7.1% |
| ROE | 34.8% | 31.7% | 30.4% | 24.0% | 18.2% | -5.7% |
| Net Debt/EBITDA | -1.5x | -1.4x | -1.3x | -1.3x | -1.7x | -0.4x |
Revenue and profitability
The company's Revenue surged on 11.0% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 7.9 pp from 29.9% to 22.0% in 2015.
Gross Margin decreased on 2.5 pp from 67.3% to 64.8% in 2015. SG&A as a % of Revenue increased on 4.3 pp from 32.9% to 37.2% in 2015.
Net Income marign decreased on 6.0 pp from 22.4% to 16.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Pacific Online Ltd's CAPEX/Revenue was 1.2% in 2015. The company's CAPEX/Revenue decreased slightly on 1.9 pp from 3.1% in 2012 to 1.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at high and attractive ROIC (21.56%) while ROE is a bit lower (18.23%). ROIC decreased on 7.1 pp from 28.6% to 21.6% in 2015. ROE decreased on 5.7 pp from 24.0% to 18.2% in 2015.
Leverage (Debt)
The company has no debt. Cash increased on 4.7% in 2015.
Appendix 1: Peers in Internet
Below you can find Pacific Online Ltd benchmarking vs. other companies in Internet 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 |
|---|
| China Public Procurement Ltd ($1094) | -78.5% | 5,077.0% | -67.5% | 1,258.9% | |
| China Digital Culture Group Ltd ($8175) | 320.4% | -47.9% | 180.8% | 168.8% | |
| GET Holdings Ltd ($8380) | -4.3% | 13.8% | 2,126.4% | 154.4% | |
| China Healthcare Holdings Ltd ($673) | | -14.8% | -52.9% | 63.1% | 0.3% |
| ABC Multiactive Ltd ($8131) | | -15.2% | -13.2% | 59.4% | -32.4% |
| |
|---|
| Median (19 companies) | 0.8% | 12.3% | 3.7% | 10.7% | 8.5% |
|---|
| Pacific Online Ltd ($543) | | 11.8% | 18.5% | 16.5% | 11.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | 73.0% | 86.7% | 83.5% | 86.2% | 82.1% |
| Sino-I Technology Ltd ($250) | 74.2% | 75.3% | 82.7% | 78.8% | |
| AcrossAsia Ltd ($8061) | 78.7% | 70.9% | 73.0% | 72.5% | |
| Forgame Holdings Ltd ($484) | 82.1% | 89.8% | 84.7% | 66.1% | 33.5% |
| China Digital Culture Group Ltd ($8175) | 62.1% | 64.3% | 78.6% | 65.2% | |
| |
|---|
| Median (16 companies) | 62.1% | 61.4% | 57.3% | 55.8% | 40.4% |
|---|
| Pacific Online Ltd ($543) | 69.1% | 71.0% | 70.5% | 67.3% | 64.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 61.1% | 64.2% | 71.6% | 71.6% | 72.4% |
| GET Holdings Ltd ($8380) | -182.0% | -237.7% | 56.8% | 66.4% | |
| AcrossAsia Ltd ($8061) | 15.4% | 20.8% | 24.2% | 44.7% | |
| Tencent Holdings Ltd ($700) | 48.2% | 38.4% | 34.7% | 42.5% | 43.5% |
| China Digital Culture Group Ltd ($8175) | -12.1% | -66.7% | 22.5% | 40.8% | |
| |
|---|
| Median (20 companies) | 3.0% | 1.4% | 15.2% | 7.3% | 1.3% |
|---|
| Pacific Online Ltd ($543) | 45.5% | 42.8% | 39.2% | 29.9% | 22.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 14.2% | 7.6% | 10.2% | 62.8% | 12.4% |
| AcrossAsia Ltd ($8061) | 61.2% | 56.6% | 65.9% | 36.3% | |
| China E-Learning Group Ltd ($8055) | 1.3% | 0.0% | 2.7% | 15.3% | |
| Asian Capital Resources Holdings Ltd ($8025) | 0.0% | 0.0% | | 12.2% | |
| Capinfo Co Ltd ($1075) | 1.6% | 17.3% | 13.1% | 9.7% | 4.3% |
| |
|---|
| Median (20 companies) | 10.8% | 4.5% | 2.7% | 2.7% | 0.4% |
|---|
| Pacific Online Ltd ($543) | 15.8% | 3.1% | 6.1% | 3.6% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tencent Holdings Ltd ($700) | 33.4% | 29.5% | 26.7% | 29.1% | 24.3% |
| GET Holdings Ltd ($8380) | -6.8% | -6.5% | 10.8% | 19.3% | |
| Tradelink Electronic Commerce Ltd ($536) | 19.5% | 22.4% | 18.2% | 17.4% | |
| SUNeVision Holdings Ltd ($8008) | 9.9% | 10.8% | 13.3% | 14.4% | 15.3% |
| China Digital Culture Group Ltd ($8175) | -2.3% | -11.2% | 4.0% | 11.7% | |
| |
|---|
| Median (20 companies) | -2.4% | -6.3% | 3.0% | -3.1% | 0.3% |
|---|
| Pacific Online Ltd ($543) | 41.7% | 37.9% | 36.4% | 28.6% | 21.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ABC Multiactive Ltd ($8131) | | | | 9.5x | |
| AcrossAsia Ltd ($8061) | 1.7x | 2.3x | 2.9x | 1.5x | |
| Tencent Holdings Ltd ($700) | -0.1x | -0.2x | -0.2x | -0.2x | 0.5x |
| China Digital Culture Group Ltd ($8175) | | | -2.2x | -0.4x | |
| GET Holdings Ltd ($8380) | | | -1.1x | -1.0x | |
| |
|---|
| Median (12 companies) | -2.1x | -1.2x | -1.3x | -1.5x | -1.9x |
|---|
| Pacific Online Ltd ($543) | -1.5x | -1.4x | -1.3x | -1.3x | -1.7x |
