Shandong Xinhua Pharmaceutical Co Ltd Debt surged on 19.4% in 2015 and Revenue increased slightly on 0.96%
30/03/2016 • About Shandong Xinhua Pharmaceutical Co Ltd (
$719) • By InTwits
Shandong Xinhua Pharmaceutical Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shandong Xinhua Pharmaceutical Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's in pair with industry average of 8.2%.
- CAPEX is quite volatile: 169 in 2015, 135 in 2014, 91.1 in 2013, 574 in 2012, 467 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.3%
- It operates with high leverage: Net Debt/EBITDA is 3.4x 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.
Shandong Xinhua Pharmaceutical Co Ltd ($719) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,918 | 2,932 | 3,339 | 3,533 | 3,567 | 1.0% |
| Gross Profit | 548 | 504 | 578 | 721 | 807 | 12.0% |
| SG&A | 450 | 472 | 530 | 599 | 657 | 9.6% |
| EBITDA | 306 | 236 | 318 | 420 | 383 | -9.0% |
| Net Income | 74 | 22 | 38 | 50 | 83 | 66.2% |
Balance Sheet
|
|---|
| Cash | 268 | 376 | 311 | 281 | 476 | 69.3% |
| Short Term Debt | 475 | 493 | 501 | 839 | 1,331 | 58.7% |
| Long Term Debt | 213 | 718 | 889 | 636 | 430 | -32.4% |
Cash flow
|
|---|
| Capex | 467 | 574 | 91 | 135 | 169 | 25.6% |
Ratios
|
|---|
| Revenue growth | 12.7% | 0.5% | 13.9% | 5.8% | 1.0% | |
| EBITDA growth | 1.8% | -22.8% | 34.7% | 32.0% | -9.0% | |
| Gross Margin | 18.8% | 17.2% | 17.3% | 20.4% | 22.6% | 2.2% |
| EBITDA Margin | 10.5% | 8.1% | 9.5% | 11.9% | 10.7% | -1.2% |
| Net Income Margin | 2.5% | 0.8% | 1.1% | 1.4% | 2.3% | 0.9% |
| SG&A, % of revenue | 15.4% | 16.1% | 15.9% | 17.0% | 18.4% | 1.5% |
| CAPEX, % of revenue | 16.0% | 19.6% | 2.7% | 3.8% | 4.7% | 0.9% |
| ROIC | 7.3% | 2.5% | 4.0% | 6.5% | 4.3% | -2.2% |
| ROE | 4.4% | 1.3% | 2.1% | 2.7% | 4.5% | 1.7% |
| Net Debt/EBITDA | 1.4x | 3.5x | 3.4x | 2.8x | 3.4x | 0.5x |
Revenue and profitability
Shandong Xinhua Pharmaceutical Co Ltd's Revenue increased slightly on 0.96% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.2 pp from 6.7% to -4.6% in FY2015.
Gross Margin increased on 2.2 pp from 20.4% to 22.6% in 2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 17.0% to 18.4% in 2015.
Net Income marign increased slightly on 0.91 pp from 1.4% to 2.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Shandong Xinhua Pharmaceutical Co Ltd had CAPEX/Revenue of 4.7%. CAPEX/Revenue dropped on 14.8 pp from 19.6% in 2012 to 4.7% in 2015. Average CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at low ROIC (4.26%) and ROE (4.48%). ROIC decreased on 2.2 pp from 6.5% to 4.3% in 2015. ROE increased slightly on 1.7 pp from 2.7% to 4.5% in 2015.
Leverage (Debt)
Debt level is 3.4x Net Debt / EBITDA and 4.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.5x from 2.8x to 3.4x in 2015. Debt surged on 19.4% in 2015 while cash surged on 69.3% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide Shandong Xinhua Pharmaceutical Co 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% | 15.7% | 13.5% | 16.3% | 4.0% |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | | 0.5% | 13.9% | 5.8% | 1.0% |
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% |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 18.8% | 17.2% | 17.3% | 20.4% | 22.6% |
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% |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 10.5% | 8.1% | 9.5% | 11.9% | 10.7% |
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% | 9.7% | 7.6% | 4.4% |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 16.0% | 19.6% | 2.7% | 3.8% | 4.7% |
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% |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 7.3% | 2.5% | 4.0% | 6.5% | 4.3% |
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 (31 companies) | -0.8x | -0.4x | -0.5x | -0.6x | -0.4x |
|---|
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 1.4x | 3.5x | 3.4x | 2.8x | 3.4x |
