Livzon Pharmaceutical Group Inc demonstrated fast growth in recent years. Will the growth continue?
31/03/2016 • About Livzon Pharmaceutical Group Inc (
$1513) • By InTwits
Livzon Pharmaceutical Group Inc is a fast-growing stock in Pharmaceuticals industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Livzon Pharmaceutical Group Inc showed fast growth in the last financial year. Livzon Pharmaceutical Group Inc's revenue surged on 19.4% in FY2015. Together with revenue growth Livzon Pharmaceutical Group Inc also managed to keep EBITDA growth. EBITDA grew 21.3% for the same period.
In the longer period Livzon Pharmaceutical Group Inc showed fast revenue growth of 18.9% from 2012 to 2015 annualy. EBITDA surged on 16.4% from 2012 to 2015 annualy.
Livzon Pharmaceutical Group Inc ($1513) financials for the last 5 years
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 3,122 | 3,889 | 4,560 | 5,475 | 6,540 |
|---|
| Revenue growth, % | | 24.6% | 17.3% | 20.1% | 19.4% |
|---|
| Gross margin, % | 55.2% | 59.6% | 62.8% | 60.9% | 60.6% |
|---|
| SG&A, % | 40.6% | 46.1% | 45.3% | 44.6% | 44.1% |
|---|
| EBITDA | 551 | 649 | 740 | 844 | 1,024 |
|---|
| EBITDA growth, % | | 17.8% | 13.9% | 14.1% | 21.3% |
|---|
| EBITDA margin, % | 17.7% | 16.7% | 16.2% | 15.4% | 15.7% |
|---|
| Net Income | 359 | 442 | 488 | 516 | 623 |
|---|
| Net Income margin, % | 11.5% | 11.4% | 10.7% | 9.42% | 9.52% |
|---|
| |
| CAPEX | 349 | 762 | 920 | 666 | 477 |
|---|
| CAPEX/Revenue, % | 11.2% | 19.6% | 20.2% | 12.2% | 7.30% |
|---|
| Debt | 653 | 1,221 | 1,417 | 1,495 | 950 |
|---|
| Cash | 1,432 | 1,179 | 751 | 709 | 767 |
|---|
| Net Debt/EBITDA | -1.4x | 0.1x | 0.9x | 0.9x | 0.2x |
|---|
| |
| ROIC, % | 12.0% | 12.0% | 11.9% | 11.1% | 12.4% |
|---|
| ROE, % | 13.4% | 15.1% | 15.3% | 14.7% | 15.5% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin increased slightly on 0.300 pp from 15.4% to 15.7% in 2015. In the longer period Livzon Pharmaceutical Group Inc showed decline of 1 pp from 16.7% in 2012 to 15.7% in 2015.
Livzon Pharmaceutical Group Inc shows attractive ROIC at 12.4% for the last 12 months which assumes stable development model. Three years ago it was about the same at 12.0%. It's average level of ROIC for the last three years was 11.8%.
The company's Net Income margin increased slightly on 0.100 pp from 9.40% to 9.50% in 2015. In the last 3 years Net Income margin dropped on 1.90 pp from 11.4% in 2012 to 9.50% in 2015.
Livzon Pharmaceutical Group Inc operates at ROE of 15.5%. It's average level of ROE for the last three years was 15.2%.
Capital expenditures (CAPEX)
To fuel this fast growth Livzon Pharmaceutical Group Inc had to invest in CAPEX.In FY2015 Livzon Pharmaceutical Group Inc had CAPEX/Revenue of 7.30%. The company showed big decline in CAPEX/Revenue of 12.3 pp from 19.6% in 2012 to 7.30% in 2015. It's average CAPEX/Revenue for the last three years was 13.2%.
Leverage (Debt)
The company has low debt level at 0.2x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period leverage surged on 0.11x from 0.06x in 2012 to 0.18x in 2015.
Peers in Pharmaceuticals
Below you can find Livzon Pharmaceutical Group Inc 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | -10.0% | -45.4% | 1,636.5% | -52.9% |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | | 15.1% | -99.9% | 480.0% | -93.1% |
| United Gene High-Tech Group Ltd ($399) | | -71.8% | -60.5% | 196.0% | 14.2% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 22.3% | 35.2% | 90.0% | 40.0% |
| Dragonite International Ltd ($329) | | -10.5% | 13.5% | 64.8% | -26.7% |
| |
|---|
| Median (41 companies) | 27.1% | 13.4% | 13.5% | 15.7% | 4.0% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | | 24.6% | 17.3% | 20.1% | 19.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 83.9% | 82.0% | 81.5% | 80.9% | |
| Consun Pharmaceutical Group Ltd ($1681) | 75.5% | 75.7% | 79.1% | 78.3% | |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 78.5% | 77.5% | 76.4% | |
| China Health Group Inc ($8225) | 38.7% | 43.4% | 33.6% | 76.2% | 75.7% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 72.6% | 65.2% | 77.9% | 72.1% | 68.7% |
| |
|---|
| Median (39 companies) | 37.6% | 38.5% | 35.9% | 48.3% | 49.9% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 55.2% | 59.6% | 62.8% | 60.9% | 60.6% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Asia Resources Holdings Ltd ($899) | 3.5% | -80.8% | 25.1% | 113.7% | |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 48.4% | 38.8% | 65.4% | 70.9% | |
| Pak Fah Yeow International Ltd ($239) | 28.7% | 33.9% | 28.4% | 52.4% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 29.7% | 41.3% | 45.4% | 47.5% | 49.1% |
| Real Nutriceutical Group Ltd ($2010) | 45.6% | 42.8% | 43.4% | 46.0% | |
| |
|---|
| Median (40 companies) | 17.2% | 20.3% | 20.2% | 21.4% | 19.0% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 17.7% | 16.7% | 16.2% | 15.4% | 15.7% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 0.2% | | 11,100.0% | 103.4% | 0.0% |
| Extrawell Pharmaceutical Holdings Ltd ($858) | 5.7% | 1.7% | 20.6% | 92.4% | 3.6% |
| Asia Resources Holdings Ltd ($899) | 12.2% | 4.4% | 8.1% | 92.0% | |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 19.5% | 16.8% | 52.4% | 39.6% | |
| Hao Wen Holdings Ltd ($8019) | 6.4% | 30.0% | 2.3% | 38.2% | |
| |
|---|
| Median (40 companies) | 9.4% | 8.2% | 7.5% | 7.2% | 4.0% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 11.2% | 19.6% | 20.2% | 12.2% | 7.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 18.5% | 16.7% | 20.8% | 33.0% | |
| Sino Biopharmaceutical Ltd ($1177) | 19.9% | 26.2% | 26.8% | 26.5% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | | 25.3% | 27.5% | 23.8% | 25.9% |
| Lee's Pharmaceutical Holdings Ltd ($950) | 31.3% | 26.1% | 22.0% | 22.4% | 22.7% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 14.3% | 13.7% | 18.3% | 22.0% | |
| |
|---|
| Median (41 companies) | 8.5% | 12.3% | 9.2% | 11.1% | 6.7% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 12.0% | 12.0% | 11.9% | 11.1% | 12.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| China NT Pharma Group Co Ltd ($1011) | 0.4x | | | 7.2x | -0.4x |
| United Laboratories International Holdings Ltd/The ($3933) | 4.4x | 6.5x | 4.6x | 4.2x | 4.0x |
| Lansen Pharmaceutical Holdings Ltd ($503) | 0.9x | 1.7x | 2.8x | 3.4x | |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 2.5x | 5.4x | 4.0x | 3.4x | |
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 1.4x | 3.5x | 3.4x | 2.8x | |
| |
|---|
| Median (33 companies) | -0.6x | -0.4x | -0.6x | -0.6x | -1.0x |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | -1.4x | 0.1x | 0.9x | 0.9x | 0.2x |
