China Digital Culture Group Ltd revenue started to decline in 2015: dropped 22.0% vs. 169% growth a year earliner
31/03/2016 • About China Digital Culture Group Ltd (
$8175) • By InTwits
China Digital Culture Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 46.6% in 2015 vs. 40.8% in 2014 vs. -12.1% in 2011
- EBITDA Margin is quite volatile: 46.6% in 2015, 40.8% in 2014, 22.5% in 2013, -66.7% in 2012, -12.1% in 2011
- China Digital Culture Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.3%. At the same time it's a lot of higher than industry average of 4.2%.
- CAPEX is quite volatile: 0.0030 in 2015, 0.022 in 2014, 0.075 in 2013, 0.52 in 2012, 6.7 in 2011
- The company has business model with low profitability: ROIC is at 8.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Digital Culture Group Ltd ($8175) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 29.3 | 15.3 | 42.9 | 115.4 | 90.0 | -22.0% |
| Gross Profit | 18.2 | 9.8 | 33.7 | 75.3 | 65.4 | -13.1% |
| SG&A | | | 28.7 | 35.8 | 31.9 | -11.1% |
| EBITDA | -3.6 | -10.2 | 9.7 | 47.0 | 41.9 | -10.9% |
| Net Income | -37.9 | -68.9 | 5.3 | 24.9 | 24.0 | -3.7% |
Balance Sheet
|
|---|
| Cash | 7.3 | 17.5 | 21.5 | 21.0 | 63.8 | 204.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 24.2 | 5.4 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 6.7 | 0.5 | 0.1 | 0.0 | 0.0 | -86.4% |
Ratios
|
|---|
| Revenue growth | 320.4% | -47.9% | 180.8% | 168.8% | -22.0% | |
| EBITDA growth | -78.9% | 186.6% | -194.8% | 387.0% | -10.9% | |
| Gross Margin | 62.1% | 64.3% | 78.6% | 65.2% | 72.7% | 7.4% |
| EBITDA Margin | -12.1% | -66.7% | 22.5% | 40.8% | 46.6% | 5.8% |
| Net Income Margin | -129.1% | -451.0% | 12.3% | 21.6% | 26.6% | 5.0% |
| SG&A, % of revenue | | | 66.9% | 31.1% | 35.4% | 4.3% |
| CAPEX, % of revenue | 23.0% | 3.4% | 0.2% | 0.0% | 0.0% | -0.0% |
| ROIC | -2.3% | -11.2% | 4.0% | 11.7% | 8.2% | -3.5% |
| ROE | -28.3% | -71.5% | 3.1% | 8.2% | 6.0% | -2.2% |
| Net Debt/EBITDA | | | -2.2x | -0.4x | -1.5x | -1.1x |
Revenue and profitability
The company's Revenue dropped on 22.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.8 pp from 40.8% to 46.6% in 2015.
Gross Margin increased on 7.4 pp from 65.2% to 72.7% in 2015. SG&A as a % of Revenue increased on 4.3 pp from 31.1% to 35.4% in 2015.
Net Income marign increased on 5.0 pp from 21.6% to 26.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.0033% in 2015. CAPEX/Revenue decreased on 3.4 pp from 3.4% in 2012 to 0.0033% in 2015. It's average level of CAPEX/Revenue for the last three years was 0.066%.
Return on investment
The company operates at low ROIC (8.19%) and ROE (6.03%). ROIC decreased on 3.5 pp from 11.7% to 8.2% in 2015. ROE decreased on 2.2 pp from 8.2% to 6.0% in 2015.
Leverage (Debt)
The company has no debt. Cash jumped on 204% in 2015.
Appendix 1: Peers in Internet
Below we provide China Digital Culture Group Ltd benchmarking against other companies in Internet 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 |
|---|
| Asian Capital Resources Holdings Ltd ($8025) | | -5.6% | | | 1,114.6% |
| China Public Procurement Ltd ($1094) | | 5,077.0% | -67.5% | 1,258.9% | 105.7% |
| Ourgame International Holdings Ltd ($6899) | | 33.7% | 14.8% | 101.3% | 61.8% |
| Media Asia Group Holdings Ltd ($8075) | | 1,124.6% | 275.6% | 3.6% | 55.9% |
| Tai Shing International Holdings Ltd ($8103) | | 61.3% | -35.9% | -4.9% | 48.5% |
| |
|---|
| Median (20 companies) | 29.9% | 13.2% | 8.3% | 11.3% | 9.8% |
|---|
| China Digital Culture Group Ltd ($8175) | | -47.9% | 180.8% | 168.8% | -22.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino-I Technology Ltd ($250) | 74.2% | 75.3% | 82.7% | 78.8% | 82.8% |
| ABC Multiactive Ltd ($8131) | 73.0% | 86.7% | 83.5% | 86.2% | 82.1% |
| Prosten Technology Holdings Ltd ($8026) | 76.3% | 52.4% | 47.8% | 50.8% | 67.1% |
| SUNeVision Holdings Ltd ($8008) | 51.4% | 53.5% | 60.5% | 64.7% | 65.6% |
| Pacific Online Ltd ($543) | 69.1% | 71.0% | 70.5% | 67.3% | 64.8% |
| |
|---|
| Median (17 companies) | 65.2% | 66.9% | 63.4% | 61.3% | 50.9% |
|---|
| China Digital Culture Group Ltd ($8175) | 62.1% | 64.3% | 78.6% | 65.2% | 72.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SUNeVision Holdings Ltd ($8008) | 61.1% | 64.2% | 71.6% | 71.6% | 72.4% |
| Tencent Holdings Ltd ($700) | 48.2% | 38.4% | 34.7% | 42.5% | 43.5% |
| Tradelink Electronic Commerce Ltd ($536) | 42.1% | 38.6% | 33.8% | 33.1% | 31.1% |
| GET Holdings Ltd ($8380) | -182.0% | -237.7% | 56.8% | 66.4% | 28.5% |
| Media Asia Group Holdings Ltd ($8075) | -416.5% | -30.8% | 18.6% | 13.4% | 25.1% |
| |
|---|
| Median (20 companies) | 13.8% | 7.1% | 18.6% | 13.8% | 7.1% |
|---|
| China Digital Culture Group Ltd ($8175) | -12.1% | -66.7% | 22.5% | 40.8% | 46.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asian Capital Resources Holdings Ltd ($8025) | 0.0% | 0.0% | | 12.2% | 14.0% |
| SUNeVision Holdings Ltd ($8008) | 14.2% | 7.6% | 10.2% | 62.8% | 12.4% |
| Tencent Holdings Ltd ($700) | 14.2% | 9.0% | 8.1% | 5.5% | 8.2% |
| Ourgame International Holdings Ltd ($6899) | 4.5% | 1.8% | 3.1% | 1.7% | 6.4% |
| Sino-I Technology Ltd ($250) | 20.6% | 9.3% | 12.7% | 4.0% | 6.0% |
| |
|---|
| Median (20 companies) | 8.0% | 3.3% | 2.9% | 2.7% | 1.3% |
|---|
| China Digital Culture Group Ltd ($8175) | 23.0% | 3.4% | 0.2% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tencent Holdings Ltd ($700) | 33.4% | 29.5% | 26.7% | 29.1% | 24.3% |
| Pacific Online Ltd ($543) | 41.7% | 37.9% | 36.4% | 28.6% | 21.6% |
| Tradelink Electronic Commerce Ltd ($536) | 19.5% | 22.4% | 18.2% | 17.4% | 16.7% |
| SUNeVision Holdings Ltd ($8008) | 9.9% | 10.8% | 13.3% | 14.4% | 15.3% |
| Ourgame International Holdings Ltd ($6899) | | 42.8% | 33.3% | 17.5% | 12.7% |
| |
|---|
| Median (21 companies) | -0.9% | -1.4% | 4.0% | -2.6% | 1.0% |
|---|
| China Digital Culture Group Ltd ($8175) | -2.3% | -11.2% | 4.0% | 11.7% | 8.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tai Shing International Holdings Ltd ($8103) | | | | | 82.7x |
| Sino-I Technology Ltd ($250) | | | 9.4x | | 4.1x |
| GET Holdings Ltd ($8380) | | | -1.1x | -1.0x | 0.7x |
| Tencent Holdings Ltd ($700) | -0.1x | -0.2x | -0.2x | -0.2x | 0.5x |
| SUNeVision Holdings Ltd ($8008) | -2.7x | -2.2x | -2.0x | -1.5x | -1.2x |
| |
|---|
| Median (13 companies) | -1.7x | -1.4x | -1.0x | -1.5x | -2.0x |
|---|
| China Digital Culture Group Ltd ($8175) | | | -2.2x | -0.4x | -1.5x |
