Orange Sky Golden Harvest Entertainment Holdings Ltd Net Debt / EBITDA surged on 23.0x from 2.7x to 25.8x in 2015 and Revenue surged on 17.9%
30/03/2016 • About Orange Sky Golden Harvest Entertainment Holdings Ltd (
$1132) • By InTwits
Orange Sky Golden Harvest Entertainment Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Orange Sky Golden Harvest Entertainment Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -7.0%
- EBITDA Margin is quite volatile: 2.2% in 2015, 11.8% in 2014, 12.2% in 2013, 10.9% in 2012, 14.2% in 2011
- Orange Sky Golden Harvest Entertainment Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.9%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: 129 in 2015, 162 in 2014, 457 in 2013, 242 in 2012, 613 in 2011
- The company has unprofitable business model: ROIC is at -7.0%
- It operates with high leverage: Net Debt/EBITDA is 25.8x while industry average is -1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,370 | 798 | 929 | 1,083 | 1,277 | 17.9% |
| Gross Profit | 793 | 477 | 565 | 641 | 729 | 13.7% |
| SG&A | | 95 | 101 | 723 | 935 | 29.3% |
| EBITDA | 194 | 87 | 113 | 127 | 29 | -77.6% |
| Net Income | 96 | 96 | 115 | 13 | -180 | -1,517.6% |
Balance Sheet
|
|---|
| Cash | 658 | 528 | 488 | 406 | 85 | -79.0% |
| Short Term Debt | 127 | 290 | 333 | 265 | 449 | 69.4% |
| Long Term Debt | 376 | 338 | 630 | 490 | 374 | -23.6% |
Cash flow
|
|---|
| Capex | 613 | 242 | 457 | 162 | 129 | -20.5% |
Ratios
|
|---|
| Revenue growth | 27.1% | -41.7% | 16.5% | 16.5% | 17.9% | |
| EBITDA growth | 50.7% | -55.3% | 30.8% | 12.4% | -77.6% | |
| Gross Margin | 57.9% | 59.8% | 60.8% | 59.2% | 57.1% | -2.1% |
| EBITDA Margin | 14.2% | 10.9% | 12.2% | 11.8% | 2.2% | -9.5% |
| Net Income Margin | 7.0% | 12.0% | 12.4% | 1.2% | -14.1% | -15.3% |
| SG&A, % of revenue | | 11.9% | 10.8% | 66.8% | 73.2% | 6.4% |
| CAPEX, % of revenue | 44.8% | 30.3% | 49.2% | 15.0% | 10.1% | -4.9% |
| ROIC | 5.4% | -1.1% | -0.8% | -1.0% | -7.0% | -6.0% |
| ROE | 6.7% | 6.1% | 6.8% | 0.7% | -10.8% | -11.5% |
| Net Debt/EBITDA | -0.8x | 1.1x | 4.2x | 2.7x | 25.8x | 23.0x |
Revenue and profitability
The company's Revenue jumped on 17.9% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.5 pp from 11.8% to 2.2% in 2015.
Gross Margin decreased on 2.1 pp from 59.2% to 57.1% in 2015. SG&A as a % of Revenue increased on 6.4 pp from 66.8% to 73.2% in 2015.
Net Income marign dropped on 15.3 pp from 1.2% to -14.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 10.1%. CAPEX/Revenue dropped on 20.2 pp from 30.3% in 2012 to 10.1% in 2015. Average CAPEX/Revenue for the last three years was 24.7%.To secure this fast growth the company made large investments to CAPEX (450% of EBITDA).
Return on investment
The company operates at negative ROIC (-7.03%) and ROE (-10.78%). ROIC decreased on 6.0 pp from -1.0% to -7.0% in 2015. ROE dropped on 11.5 pp from 0.72% to -10.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 25.8x and Debt / EBITDA is 28.8x. Net Debt / EBITDA surged on 23.0x from 2.7x to 25.8x in 2015. Debt increased on 9.0% in 2015 while cash dropped on 79.0% in 2015.
Appendix 1: Peers in Entertainment
Below you can find Orange Sky Golden Harvest Entertainment Holdings Ltd benchmarking vs. other companies in Entertainment 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 |
|---|
| Neo Telemedia Ltd ($8167) | | 268.8% | -60.2% | -13.4% | 5,442.4% |
| National Arts Entertainment and Culture Group Ltd ($8228) | | -57.9% | 181.2% | -20.1% | 162.4% |
| Alibaba Pictures Group Ltd ($1060) | | 169.4% | -45.8% | -63.8% | 108.3% |
| Universe International Holdings Ltd ($1046) | | -42.2% | 4.3% | 159.4% | 46.3% |
| China Vanguard Group Ltd ($8156) | | -7.0% | -62.7% | 145.0% | 29.2% |
| |
|---|
| Median (23 companies) | 16.3% | 2.9% | 11.0% | -1.8% | -6.8% |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | | -41.7% | 16.5% | 16.5% | 17.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amax International Holdings Ltd ($959) | | | 92.1% | 98.6% | 96.6% |
| China Vanguard Group Ltd ($8156) | 65.0% | 63.8% | 88.2% | 93.8% | 95.2% |
| Universe International Holdings Ltd ($1046) | 15.3% | 22.1% | 36.7% | 11.4% | 84.8% |
| Cheung Wo International Holdings Ltd ($9) | 49.4% | -17.5% | 71.4% | 77.7% | 77.8% |
| Bingo Group Holdings Ltd ($8220) | 2.0% | 2.2% | 71.2% | 55.1% | 57.4% |
| |
|---|
| Median (19 companies) | 43.8% | 42.8% | 48.7% | 43.5% | 41.2% |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 57.9% | 59.8% | 60.8% | 59.2% | 57.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Group Ltd ($70) | 101.1% | 98.6% | 98.6% | 86.6% | 99.0% |
| Universe International Holdings Ltd ($1046) | 62.2% | 36.6% | 44.6% | 74.6% | 73.6% |
| Haichang Holdings Ltd ($2255) | 46.9% | 55.0% | 44.5% | 46.3% | 56.6% |
| China Vanguard Group Ltd ($8156) | 2.8% | -15.0% | -51.8% | 30.0% | 22.9% |
| Dynam Japan Holdings Co Ltd ($6889) | 24.0% | 24.5% | 25.7% | 24.6% | 16.7% |
| |
|---|
| Median (23 companies) | 10.3% | 22.1% | 19.7% | 18.3% | -15.4% |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 14.2% | 10.9% | 12.2% | 11.8% | 2.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Star Cultural Media Group Ltd ($8172) | 0.5% | 8.9% | 0.0% | 0.0% | 848.3% |
| National Arts Entertainment and Culture Group Ltd ($8228) | 536.1% | 1,237.1% | 771.1% | 799.0% | 508.9% |
| Cheung Wo International Holdings Ltd ($9) | 44.7% | 90.3% | 465.2% | 383.2% | 202.4% |
| Haichang Holdings Ltd ($2255) | 92.6% | 21.4% | 18.5% | 10.3% | 64.2% |
| Amax International Holdings Ltd ($959) | 18.7% | 10.4% | 2.7% | 17.2% | 59.8% |
| |
|---|
| Median (23 companies) | 7.2% | 8.7% | 6.6% | 4.7% | 8.1% |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 44.8% | 30.3% | 49.2% | 15.0% | 10.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Universe International Holdings Ltd ($1046) | -4.8% | -6.2% | -0.8% | -3.7% | 43.8% |
| Neptune Group Ltd ($70) | 22.0% | 22.8% | 23.8% | 21.1% | 18.1% |
| Dynam Japan Holdings Co Ltd ($6889) | 22.5% | 23.8% | 25.4% | 21.8% | 10.5% |
| Haichang Holdings Ltd ($2255) | 6.2% | 7.1% | 8.1% | 8.6% | 8.9% |
| China Vanguard Group Ltd ($8156) | -0.8% | -4.3% | -14.3% | 7.6% | 5.7% |
| |
|---|
| Median (23 companies) | 1.1% | -1.1% | 3.7% | 0.3% | -3.8% |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 5.4% | -1.1% | -0.8% | -1.0% | -7.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nan Hai Corp Ltd ($680) | 25.2x | 80.8x | 3.5x | 20.8x | |
| Cheung Wo International Holdings Ltd ($9) | 28.3x | | | 19.1x | |
| REXLot Holdings Ltd ($555) | 0.4x | -0.0x | -0.2x | 7.2x | |
| China 3D Digital Entertainment Ltd ($8078) | -11.9x | | -0.5x | 2.3x | |
| SMI Holdings Group Ltd ($198) | 0.3x | 2.0x | 1.6x | 2.1x | |
| |
|---|
| Median (19 companies) | 0.0x | -0.2x | -0.6x | -0.3x | -0.7x |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | -0.8x | 1.1x | 4.2x | 2.7x | 25.8x |
