Hao Wen Holdings Ltd reports 144% EBITDA decline and 30.2 pp EBITDA Margin decline from 21.4% to -8.8%
30/03/2016 • About Hao Wen Holdings Ltd (
$8019) • By InTwits
Hao Wen Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hao Wen Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.6%
- The company operates at negative EBITDA Margin: -8.8%
- Hao Wen Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -13.9% for the sames years0
- Hao Wen Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.3%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 16.7 in 2015, 13.3 in 2014, 1.3 in 2013, 23.4 in 2012, 2.6 in 2011
- The company has unprofitable business model: ROIC is at -1.6%
- 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.
Hao Wen Holdings Ltd ($8019) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 41.165 | 78.127 | 56.351 | 34.685 | 37.209 | 7.3% |
| Gross Profit | 5.318 | 7.687 | 2.918 | 7.631 | 9.638 | 26.3% |
| SG&A | 31.196 | 26.816 | 57.596 | 17.958 | 20.022 | 11.5% |
| EBITDA | -4.736 | 2.644 | -36.542 | 7.432 | -3.272 | -144.0% |
| Net Income | -47.543 | 17.606 | -118.501 | -12.625 | -92.671 | 634.0% |
Balance Sheet
|
|---|
| Cash | 12.010 | 4.569 | 9.024 | 29.406 | 3.437 | -88.3% |
| Short Term Debt | 55.000 | 121.754 | 0.000 | 0.609 | 0.884 | 45.2% |
| Long Term Debt | 115.245 | 0.000 | 0.000 | 1.970 | 2.437 | 23.7% |
Cash flow
|
|---|
| Capex | 2.614 | 23.429 | 1.309 | 13.255 | 16.673 | 25.8% |
Ratios
|
|---|
| Revenue growth | -53.9% | 89.8% | -27.9% | -38.4% | 7.3% | |
| EBITDA growth | -74.3% | -155.8% | -1,482.1% | -120.3% | -144.0% | |
| Gross Margin | 12.9% | 9.8% | 5.2% | 22.0% | 25.9% | 3.9% |
| EBITDA Margin | -11.5% | 3.4% | -64.8% | 21.4% | -8.8% | -30.2% |
| Net Income Margin | -115.5% | 22.5% | -210.3% | -36.4% | -249.1% | -212.7% |
| SG&A, % of revenue | 75.8% | 34.3% | 102.2% | 51.8% | 53.8% | 2.0% |
| CAPEX, % of revenue | 6.4% | 30.0% | 2.3% | 38.2% | 44.8% | 6.6% |
| ROIC | -14.3% | -10.4% | -64.2% | 1.1% | -1.6% | -2.7% |
| ROE | -236.8% | | | -7.4% | -32.3% | -24.9% |
| Net Debt/EBITDA | | 44.3x | | -3.6x | | 3.6x |
Revenue and profitability
The company's Revenue increased on 7.3% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 40.1 pp from 32.0% to 72.1% in 2015.
Gross Margin increased on 3.9 pp from 22.0% to 25.9% in 2015. SG&A as a % of Revenue increased on 2.0 pp from 51.8% to 53.8% in 2015.
Net Income marign dropped on 213 pp from -36.4% to -249% in 2015.
Capital expenditures (CAPEX) and working capital investments
Hao Wen Holdings Ltd's CAPEX/Revenue was 44.8% in 2015. CAPEX/Revenue jumped on 14.8 pp from 30.0% in 2012 to 44.8% in 2015. Average CAPEX/Revenue for the last three years was 28.4%.
Return on investment
The company operates at negative ROIC (-1.62%) and ROE (-32.35%). ROIC decreased on 2.7 pp from 1.1% to -1.6% in 2015. ROE dropped on 24.9 pp from -7.4% to -32.3% in 2015.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA surged on 3.6x from -3.6x to in 2015. Debt jumped on 28.8% in 2015 while cash dropped on 88.3% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below you can find Hao Wen Holdings Ltd benchmarking vs. other companies in Pharmaceuticals 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 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% | 13.7% | 16.3% | 3.3% |
|---|
| Hao Wen Holdings Ltd ($8019) | | 89.8% | -27.9% | -38.4% | 7.3% |
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% |
|---|
| Hao Wen Holdings Ltd ($8019) | 12.9% | 9.8% | 5.2% | 22.0% | 25.9% |
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% |
|---|
| Hao Wen Holdings Ltd ($8019) | -11.5% | 3.4% | -64.8% | 21.4% | -8.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 11.7% | 20.9% | 36.1% | 18.2% | 15.4% |
| |
|---|
| Median (37 companies) | 10.9% | 8.2% | 9.7% | 7.4% | 4.4% |
|---|
| Hao Wen Holdings Ltd ($8019) | 6.4% | 30.0% | 2.3% | 38.2% | 44.8% |
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% |
|---|
| Hao Wen Holdings Ltd ($8019) | -14.3% | -10.4% | -64.2% | 1.1% | -1.6% |
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 |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 2.5x | 5.4x | 4.0x | 3.4x | 4.3x |
| United Laboratories International Holdings Ltd/The ($3933) | 4.4x | 6.5x | 4.6x | 4.2x | 4.0x |
| |
|---|
| Median (32 companies) | -0.6x | -0.4x | -0.4x | -0.6x | -0.3x |
|---|
