Sihuan Pharmaceutical Holdings Group Ltd EBITDA surged on 35.1% in 2015 and EBITDA Margin jumped on 22.4 pp from 70.9% to 93.3%
29/03/2016 • About Sihuan Pharmaceutical Holdings Group Ltd (
$460) • By InTwits
Sihuan Pharmaceutical Holdings Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 93.3% in 2015 vs. 70.9% in 2014 vs. 48.4% in 2011
- Sihuan Pharmaceutical Holdings Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.4%. At the same time it's a lot of higher than industry average of 8.4%.
- CAPEX is quite volatile: 488 in 2015, 561 in 2014, 934 in 2013, 635 in 2012, 261 in 2011
- The company has highly profitable business model: ROIC is at 25.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sihuan Pharmaceutical Holdings Group Ltd ($460) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,242 | 3,043 | 2,586 | 3,084 | 3,167 | 2.7% |
| Gross Profit | 1,714 | 2,289 | 1,455 | 2,111 | 2,228 | 5.5% |
| SG&A | 833 | 1,519 | 466 | 630 | 611 | -3.1% |
| EBITDA | 1,085 | 1,179 | 1,691 | 2,187 | 2,955 | 35.1% |
| Net Income | 824 | 904 | 1,285 | 1,671 | 2,062 | 23.4% |
Balance Sheet
|
|---|
| Cash | 3,153 | 1,544 | 1,594 | 1,318 | 2,282 | 73.2% |
| Short Term Debt | 0 | 767 | 181 | 0 | 0 | |
| Long Term Debt | 6 | 6 | 6 | 4 | 8 | 136.6% |
Cash flow
|
|---|
| Capex | 261 | 635 | 934 | 561 | 488 | -13.1% |
Ratios
|
|---|
| Revenue growth | 116.2% | 35.7% | -15.0% | 19.2% | 2.7% | |
| EBITDA growth | 67.1% | 8.7% | 43.4% | 29.3% | 35.1% | |
| Gross Margin | 76.5% | 75.2% | 56.3% | 68.5% | 70.3% | 1.9% |
| EBITDA Margin | 48.4% | 38.8% | 65.4% | 70.9% | 93.3% | 22.4% |
| Net Income Margin | 36.8% | 29.7% | 49.7% | 54.2% | 65.1% | 10.9% |
| SG&A, % of revenue | 37.1% | 49.9% | 18.0% | 20.4% | 19.3% | -1.1% |
| CAPEX, % of revenue | 11.7% | 20.9% | 36.1% | 18.2% | 15.4% | -2.8% |
| ROIC | 14.3% | 13.7% | 18.3% | 22.0% | 25.4% | 3.4% |
| ROE | 12.1% | 12.9% | 17.2% | 19.5% | 20.2% | 0.7% |
| Net Debt/EBITDA | -2.9x | -0.7x | -0.8x | -0.6x | -0.8x | -0.2x |
Revenue and profitability
The company's Revenue increased on 2.7% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 22.4 pp from 70.9% to 93.3% in 2015.
Gross Margin increased slightly on 1.9 pp from 68.5% to 70.3% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 20.4% to 19.3% in 2015.
Net Income marign jumped on 10.9 pp from 54.2% to 65.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Sihuan Pharmaceutical Holdings Group Ltd had CAPEX/Revenue of 15.4%. Sihuan Pharmaceutical Holdings Group Ltd's CAPEX/Revenue decreased on 5.5 pp from 20.9% in 2012 to 15.4% in 2015. Average CAPEX/Revenue for the last three years was 23.2%.
Return on investment
The company operates at high and attractive ROIC (25.42%) and ROE (20.23%). ROIC increased on 3.4 pp from 22.0% to 25.4% in 2015. ROE increased slightly on 0.70 pp from 19.5% to 20.2% in 2015.
Leverage (Debt)
Debt level is -0.8x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.6x to -0.8x in 2015. Debt jumped on 137% in 2015 while cash surged on 73.2% in 2015.
Management team
Sihuan Pharmaceutical Holdings Group Ltd's CEO Guo Weicheng has spent 4 years at the company.
Appendix 1: Peers in Pharmaceuticals
Below we provide Sihuan Pharmaceutical Holdings Group Ltd benchmarking against other companies in Pharmaceuticals 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 |
|---|
| 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% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 22.3% | 35.2% | 90.0% | 40.0% |
| Dragonite International Ltd ($329) | | -10.5% | 13.5% | 64.8% | -26.7% |
| |
|---|
| Median (42 companies) | 12.7% | 14.3% | 13.7% | 15.3% | 4.4% |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | | 35.7% | -15.0% | 19.2% | 2.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Luye Pharma Group Ltd ($2186) | 83.0% | 83.5% | 83.6% | 81.0% | 81.4% |
| 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% |
| |
|---|
| Median (40 companies) | 38.0% | 39.1% | 37.2% | 48.7% | 49.7% |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 76.5% | 75.2% | 56.3% | 68.5% | 70.3% |
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% | |
| 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% | |
| China Shineway Pharmaceutical Group Ltd ($2877) | 47.8% | 37.8% | 40.1% | 40.5% | |
| |
|---|
| Median (41 companies) | 17.0% | 18.7% | 19.7% | 21.4% | 18.3% |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 48.4% | 38.8% | 65.4% | 70.9% | 93.3% |
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 (41 companies) | 10.3% | 8.2% | 8.1% | 7.4% | 4.3% |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 11.7% | 20.9% | 36.1% | 18.2% | 15.4% |
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% | 22.7% |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 34.4% | 27.6% | 22.2% | 19.9% | 20.8% |
| |
|---|
| Median (42 companies) | 8.5% | 12.2% | 9.3% | 11.1% | 7.9% |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 14.3% | 13.7% | 18.3% | 22.0% | 25.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China NT Pharma Group Co Ltd ($1011) | 0.4x | | | 7.2x | -0.4x |
| 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 (34 companies) | -0.4x | 0.0x | -0.2x | -0.6x | -0.4x |
|---|
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | -2.9x | -0.7x | -0.8x | -0.6x | -0.8x |
