Looking for growth stocks? Pay attention to Century Sunshine Group Holdings Ltd
30/03/2016 • About Century Sunshine Group Holdings Ltd (
$509) • By InTwits
Pay attention to Century Sunshine Group Holdings Ltd as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Century Sunshine Group Holdings Ltd showed fast growth in the last financial year. The company's revenue surged on 21.4% in FY2015. In addition to revenue Century Sunshine Group Holdings Ltd also keeps delivering EBITDA growth. It was 14.8% in FY2015
If we look for the longer period Century Sunshine Group Holdings Ltd showed fast revenue growth of 26.5% from 2012 to 2015 annualy. EBITDA surged on 29.8% from 2012 to 2015 annualy.
Century Sunshine Group Holdings Ltd ($509) financials for the last 5 years
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 737 | 1,243 | 1,640 | 2,073 | 2,516 |
|---|
| Revenue growth, % | | 68.7% | 32.0% | 26.4% | 21.4% |
|---|
| Gross margin, % | 17.9% | 26.7% | 31.0% | 31.8% | 31.2% |
|---|
| SG&A, % | 10.1% | 7.81% | 7.63% | 8.03% | 10.1% |
|---|
| EBITDA | 114 | 300 | 460 | 573 | 657 |
|---|
| EBITDA growth, % | | 163.5% | 53.3% | 24.4% | 14.8% |
|---|
| EBITDA margin, % | 15.5% | 24.2% | 28.1% | 27.6% | 26.1% |
|---|
| Net Income | 97 | 130 | 230 | 288 | 303 |
|---|
| Net Income margin, % | 13.1% | 10.5% | 14.0% | 13.9% | 12.1% |
|---|
| |
| CAPEX | 83 | 375 | 357 | 585 | 217 |
|---|
| CAPEX/Revenue, % | 11.3% | 30.2% | 21.8% | 28.2% | 8.64% |
|---|
| Debt | 284 | 317 | 316 | 890 | 1,504 |
|---|
| Cash | 241 | 391 | 382 | 829 | 1,453 |
|---|
| Net Debt/EBITDA | 0.4x | -0.2x | -0.1x | 0.1x | 0.1x |
|---|
| |
| ROIC, % | 3.5% | 11.3% | 15.9% | 16.4% | 13.3% |
|---|
| ROE, % | 7.3% | 8.6% | 12.7% | 13.7% | 11.8% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 27.6% in FY2014 to 26.1% in FY2015. In the last 3 years Century Sunshine Group Holdings Ltd's EBITDA margin increased on 1.90 pp from 24.2% in 2012 to 26.1% in 2015.
We call Century Sunshine Group Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 13.3%. During the last three years it surged - it was 11.3% in FY2012. It's average ROIC for the last three years was 15.2%.
Century Sunshine Group Holdings Ltd showed big decline in Net Income margin of 1.80 pp from 13.9% to 12.1% in 2015. In the longer period Century Sunshine Group Holdings Ltd showed fast Net Income margin growth of 1.60 pp from 10.5% in 2012 to 12.1% in 2015.
Century Sunshine Group Holdings Ltd operates at ROE of 11.8%. It's average level of ROE for the last three years was 12.7%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 8.64%. Century Sunshine Group Holdings Ltd's CAPEX/Revenue dropped on 21.6 pp from 30.2% in 2012 to 8.64% in 2015. It's average CAPEX/Revenue for the last three years was 19.5%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.1x Net Debt/EBITDA. In the last 3 years leverage surged on 0.33x from -0.25x in 2012 to 0.08x in 2015.
Valuation vs. comparable companies
At the end of trading day today Century Sunshine Group Holdings Ltd traded at 3.0x EV/EBITDA which is 86.1% lower than 21.6x Chemicals peer group avearge calculated on the basis of 70 companies. At the end of trading day today Century Sunshine Group Holdings Ltd traded at 6.4x P/E which is 24.3% lower than 8.4x Chemicals peer group avearge calculated on the basis of 9 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 4.5x EV/(EBITDA-CAPEX) which is not surprisingly 185% higher than 1.6x Chemicals industry avearge calculated based on 8 companies.
Peers in Chemicals
Below we provide Century Sunshine Group Holdings Ltd benchmarking against other companies in Chemicals 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Bestway International Holdings Ltd ($718) | | -25.4% | -62.1% | 330.3% | 238.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 39.7% | -33.6% | 5.5% | 29.1% | |
| China XLX Fertiliser Ltd ($1866) | | 7.0% | 0.6% | 28.0% | 13.9% |
| Landing International Development Ltd ($582) | | 2.1% | 15.9% | 23.3% | 10.4% |
| Huabao International Holdings Ltd ($336) | | 16.1% | 10.1% | 16.2% | 2.1% |
| |
|---|
| Median (32 companies) | 28.6% | 2.0% | 8.5% | 1.8% | -2.2% |
|---|
| Century Sunshine Group Holdings Ltd ($509) | | 68.7% | 32.0% | 26.4% | 21.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Huabao International Holdings Ltd ($336) | 74.3% | 70.5% | 69.1% | 70.8% | 69.9% |
| China Flavors & Fragrances Co Ltd ($3318) | 41.3% | 46.8% | 48.6% | 47.8% | 48.9% |
| Smartac Group China Holdings Ltd ($395) | 17.3% | -1.8% | 11.2% | 40.4% | |
| Bracell Ltd ($1768) | 40.1% | 30.5% | 37.3% | 37.3% | 38.4% |
| Yingde Gases Group Co Ltd ($2168) | 34.2% | 31.7% | 31.0% | 32.1% | 32.2% |
| |
|---|
| Median (32 companies) | 20.3% | 18.9% | 17.3% | 16.8% | 22.4% |
|---|
| Century Sunshine Group Holdings Ltd ($509) | 17.9% | 26.7% | 31.0% | 31.8% | 31.2% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Huabao International Holdings Ltd ($336) | 66.4% | 63.8% | 59.1% | 60.0% | 58.3% |
| Bracell Ltd ($1768) | 30.1% | 22.3% | 30.8% | 38.2% | 35.9% |
| Yingde Gases Group Co Ltd ($2168) | 32.3% | 29.4% | 29.8% | 32.3% | 33.4% |
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | |
| Tiande Chemical Holdings Ltd ($609) | 21.7% | 25.5% | 27.3% | 25.1% | 27.8% |
| |
|---|
| Median (32 companies) | 15.2% | 12.3% | 11.8% | 10.7% | 11.8% |
|---|
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | 26.1% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Landing International Development Ltd ($582) | 27.9% | 7.2% | 29.6% | 419.5% | 247.4% |
| China Zenith Chemical Group Ltd ($362) | 36.8% | 147.3% | 55.7% | 67.4% | 152.2% |
| Smartac Group China Holdings Ltd ($395) | 22.5% | 14.0% | 4.7% | 49.3% | |
| China Flavors & Fragrances Co Ltd ($3318) | 16.4% | 15.8% | 20.1% | 42.4% | 35.8% |
| Bracell Ltd ($1768) | 24.4% | 22.3% | 64.3% | 35.4% | 11.7% |
| |
|---|
| Median (32 companies) | 8.3% | 6.8% | 8.5% | 5.4% | 7.0% |
|---|
| Century Sunshine Group Holdings Ltd ($509) | 11.3% | 30.2% | 21.8% | 28.2% | 8.6% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Huabao International Holdings Ltd ($336) | 34.6% | 28.7% | 25.2% | 26.2% | 23.3% |
| Tiande Chemical Holdings Ltd ($609) | 24.4% | 26.2% | 29.4% | 20.7% | 20.6% |
| Fufeng Group Ltd ($546) | 13.9% | 9.6% | 10.8% | 11.6% | 10.3% |
| Yingde Gases Group Co Ltd ($2168) | 14.7% | 10.6% | 11.5% | 11.5% | 10.9% |
| China BlueChemical Ltd ($3983) | 21.0% | 19.1% | 16.4% | 11.4% | |
| |
|---|
| Median (32 companies) | 8.2% | 6.9% | 7.7% | 5.6% | 5.9% |
|---|
| Century Sunshine Group Holdings Ltd ($509) | 3.5% | 11.3% | 15.9% | 16.4% | 13.3% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.4x | 2.2x | 4.6x | 18.1x | |
| China XLX Fertiliser Ltd ($1866) | 2.4x | 2.6x | 5.1x | 5.8x | 5.1x |
| Ngai Hing Hong Co Ltd ($1047) | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 4.3x | 14.1x | 6.5x | 5.3x | |
| Sinofert Holdings Ltd ($297) | 4.3x | 2.9x | 32.4x | 5.0x | |
| |
|---|
| Median (25 companies) | 1.3x | 1.6x | 2.2x | 1.4x | 1.7x |
|---|
| Century Sunshine Group Holdings Ltd ($509) | 0.4x | -0.2x | -0.1x | 0.1x | 0.1x |
