China Grand Pharmaceutical and Healthcare Holdings Ltd Debt jumped on 47.7% in 2015 and Revenue increased on 4.0%
30/03/2016 • About China Grand Pharmaceutical and Healthcare Holdings Ltd (
$512) • By InTwits
China Grand Pharmaceutical and Healthcare Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Grand Pharmaceutical and Healthcare Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.7%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 480 in 2015, 429 in 2014, 906 in 2013, 796 in 2012, 287 in 2011
- The company has business model with low profitability: ROIC is at 9.1%
- It operates with high leverage: Net Debt/EBITDA is 4.3x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,648 | 2,059 | 2,658 | 3,122 | 3,246 | 4.0% |
| Gross Profit | 515 | 645 | 887 | 1,194 | 1,350 | 13.1% |
| SG&A | | 577 | 772 | 981 | 1,073 | 9.4% |
| EBITDA | 182 | 232 | 459 | 504 | 582 | 15.5% |
| Net Income | 54 | 67 | 100 | 175 | 181 | 3.3% |
Balance Sheet
|
|---|
| Cash | 343 | 305 | 250 | 460 | 654 | 42.0% |
| Short Term Debt | 740 | 1,423 | 1,657 | 1,466 | 2,006 | 36.8% |
| Long Term Debt | 49 | 135 | 425 | 690 | 1,179 | 71.0% |
Cash flow
|
|---|
| Capex | 287 | 796 | 906 | 429 | 480 | 11.9% |
Ratios
|
|---|
| Revenue growth | 56.2% | 25.0% | 29.1% | 17.4% | 4.0% | |
| EBITDA growth | -17.3% | 27.2% | 98.2% | 9.7% | 15.5% | |
| Gross Margin | 31.3% | 31.3% | 33.3% | 38.2% | 41.6% | 3.4% |
| EBITDA Margin | 11.1% | 11.3% | 17.3% | 16.1% | 17.9% | 1.8% |
| Net Income Margin | 3.3% | 3.3% | 3.7% | 5.6% | 5.6% | -0.0% |
| SG&A, % of revenue | | 28.0% | 29.0% | 31.4% | 33.1% | 1.7% |
| CAPEX, % of revenue | 17.4% | 38.7% | 34.1% | 13.7% | 14.8% | 1.0% |
| ROIC | 7.9% | 6.8% | 12.0% | 9.4% | 9.1% | -0.4% |
| ROE | 9.0% | 9.7% | 12.2% | 17.6% | 15.9% | -1.7% |
| Net Debt/EBITDA | 2.5x | 5.4x | 4.0x | 3.4x | 4.3x | 1.0x |
Revenue and profitability
The company's Revenue increased on 4.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.83 pp from 22.4% to 23.2% in 2015.
Gross Margin increased on 3.4 pp from 38.2% to 41.6% in 2015. SG&A as a % of Revenue increased slightly on 1.7 pp from 31.4% to 33.1% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Grand Pharmaceutical and Healthcare Holdings Ltd had CAPEX/Revenue of 14.8%. CAPEX/Revenue dropped on 23.9 pp from 38.7% in 2012 to 14.8% in 2015. Average CAPEX/Revenue for the last three years was 20.9%.The company invested a large share of EBITDA (82.4%) to CAPEX.
Return on investment
The company operates at good ROE (15.92%) while ROIC is low (9.08%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.7 pp from 17.6% to 15.9% in 2015.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and 5.5x Debt / EBITDA. Net Debt / EBITDA jumped on 1.0x from 3.4x to 4.3x in 2015. Debt surged on 47.7% in 2015 while cash surged on 42.0% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide China Grand Pharmaceutical and Healthcare Holdings 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 |
|---|
| China Health Group Inc ($8225) | | 58.5% | -48.0% | -60.1% | 244.1% |
| Wai Yuen Tong Medicine Holdings Ltd ($897) | | -9.9% | 45.9% | -10.5% | 105.6% |
| Oriental Unicorn Agricultural Group Ltd ($8120) | | 30.2% | -78.1% | 16.8% | 100.8% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 22.3% | 35.2% | 90.0% | 40.0% |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | | 37.0% | 13.5% | 9.4% | 30.5% |
| |
|---|
| Median (38 companies) | 7.4% | 14.3% | 13.5% | 15.3% | 3.3% |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | | 25.0% | 29.1% | 17.4% | 4.0% |
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% |
| Consun Pharmaceutical Group Ltd ($1681) | 75.5% | 75.7% | 79.1% | 78.3% | 80.7% |
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 83.9% | 82.0% | 81.5% | 80.9% | 79.9% |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 78.5% | 77.5% | 76.4% | 77.7% |
| China Health Group Inc ($8225) | 38.7% | 43.4% | 33.6% | 76.2% | 75.7% |
| |
|---|
| Median (37 companies) | 38.7% | 39.4% | 38.3% | 50.0% | 50.0% |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 31.3% | 31.3% | 33.3% | 38.2% | 41.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 132.2% | 193.8% | 205,840.0% | -15,344.8% | 49,650.0% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 48.4% | 38.8% | 65.4% | 70.9% | 93.3% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 32.9% | 60.6% | 21.0% | 28.8% | 61.1% |
| U-Home Group Holdings Ltd ($2327) | 23.9% | 9.8% | -16.6% | -46.7% | 51.7% |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 29.7% | 41.3% | 45.4% | 47.5% | 49.1% |
| |
|---|
| Median (38 companies) | 17.4% | 19.6% | 20.2% | 21.4% | 21.6% |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 11.1% | 11.3% | 17.3% | 16.1% | 17.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hao Wen Holdings Ltd ($8019) | 6.4% | 30.0% | 2.3% | 38.2% | 44.8% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 3.8% | 0.9% | 1.4% | 7.6% | 40.5% |
| Lee's Pharmaceutical Holdings Ltd ($950) | 8.5% | 18.6% | 20.9% | 7.1% | 26.1% |
| Tianda Pharmaceuticals Ltd ($455) | 4.8% | 6.0% | 3.9% | 10.5% | 24.4% |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 19.5% | 16.8% | 52.4% | 39.6% | 18.7% |
| |
|---|
| Median (37 companies) | 10.3% | 8.2% | 8.1% | 7.4% | 4.4% |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 17.4% | 38.7% | 34.1% | 13.7% | 14.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 19.9% | 26.2% | 26.8% | 26.5% | 26.2% |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | | 25.3% | 27.5% | 23.8% | 25.9% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 14.3% | 13.7% | 18.3% | 22.0% | 25.4% |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 17.7% | 12.6% | 14.0% | 17.8% | 23.5% |
| Lee's Pharmaceutical Holdings Ltd ($950) | 31.3% | 26.1% | 22.0% | 22.4% | 22.7% |
| |
|---|
| Median (39 companies) | 9.1% | 12.4% | 9.3% | 12.2% | 11.5% |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 7.9% | 6.8% | 12.0% | 9.4% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 2.2x | 2.3x | 3.7x | | 22.2x |
| U-Home Group Holdings Ltd ($2327) | 3.3x | 10.1x | | | 9.9x |
| Lansen Pharmaceutical Holdings Ltd ($503) | 0.9x | 1.7x | 2.8x | 3.4x | 4.7x |
| United Laboratories International Holdings Ltd/The ($3933) | 4.4x | 6.5x | 4.6x | 4.2x | 4.0x |
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 1.4x | 3.5x | 3.4x | 2.8x | 3.4x |
| |
|---|
| Median (31 companies) | -0.8x | -0.4x | -0.5x | -0.6x | -0.4x |
|---|
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 2.5x | 5.4x | 4.0x | 3.4x | 4.3x |
