Hong Kong Life Sciences and Technology Group Ltd revenue decline accelerated to 61.5% in FY2016 vs. 52.9% a year earliner
24/06/2016 • About Hong Kong Life Sciences and Technology Group Ltd (
$8085) • By InTwits
Hong Kong Life Sciences and Technology Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hong Kong Life Sciences and Technology Group Ltd doesn't have a profitable business model yet: FY2016 ROIC is -5.1%
- The company operates at negative EBITDA Margin: -5.0%
- Hong Kong Life Sciences and Technology Group Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -9.5% for the sames years0
- Hong Kong Life Sciences and Technology Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.5%. At the same time it's in pair with industry average of 8.1%.
- CAPEX is quite volatile: 0.077 in FY2016, 17.9 in FY2015, 8.5 in FY2014, 13.2 in FY2013, 5.0 in FY2012
- The company has unprofitable business model: ROIC is at -5.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hong Kong Life Sciences and Technology Group Ltd ($8085) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 71.7 | 39.2 | 679.9 | 320.1 | 123.4 | -61.5% |
| Gross Profit | 28.2 | 2.7 | 14.6 | 26.9 | 29.8 | 10.8% |
| SG&A | | | | 65.4 | 44.9 | -31.4% |
| EBITDA | -0.5 | -34.5 | -48.2 | -28.5 | -6.2 | |
| Net Income | -28.4 | -35.6 | -152.2 | -81.1 | -42.2 | |
Balance Sheet
|
|---|
| Cash | 108.9 | 29.2 | 47.7 | 12.1 | 40.3 | 233.1% |
| Short Term Debt | 18.5 | 35.9 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 5.0 | 13.2 | 8.5 | 17.9 | 0.1 | -99.6% |
Ratios
|
|---|
| Revenue growth | -10.0% | -45.4% | 1,636.5% | -52.9% | -61.5% | |
| EBITDA growth | -111.9% | 7,084.6% | 39.8% | -40.9% | -78.4% | |
| Gross Margin | 39.4% | 6.8% | 2.2% | 8.4% | 24.2% | 15.8% |
| EBITDA Margin | -0.7% | -88.1% | -7.1% | -8.9% | -5.0% | 3.9% |
| Net Income Margin | -39.7% | -91.0% | -22.4% | -25.3% | -34.2% | -8.8% |
| SG&A, % of revenue | | | | 20.4% | 36.4% | 15.9% |
| CAPEX, % of revenue | 7.0% | 33.6% | 1.2% | 5.6% | 0.1% | -5.5% |
| ROIC | -2.5% | -10.6% | -14.1% | -12.3% | -5.1% | 7.2% |
| ROE | -10.4% | -10.1% | -37.8% | -23.9% | -12.7% | 11.2% |
Revenue and profitability
The company's Revenue dropped on 61.5%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.9 pp from -8.9% to -5.0% in FY2016.
Gross Margin surged on 15.8 pp from 8.4% to 24.2% in FY2016. SG&A as a % of Revenue jumped on 15.9 pp from 20.4% to 36.4% in FY2016.
Net Income marign decreased on 8.8 pp from -25.3% to -34.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Hong Kong Life Sciences and Technology Group Ltd had CAPEX/Revenue of 0.062%. CAPEX/Revenue dropped on 33.6 pp from 33.6% in FY2013 to 0.062% in FY2016. Average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at negative ROIC (-5.14%) and ROE (-12.74%). ROIC increased on 7.2 pp from -12.3% to -5.1% in FY2016. ROE jumped on 11.2 pp from -23.9% to -12.7% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 233%.
Appendix 1: Peers in Pharmaceuticals
Below we provide Hong Kong Life Sciences and Technology Group 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 (40 companies) | 15.7% | 13.5% | 14.8% | 3.3% | 38.3% |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | | -45.4% | 1,636.5% | -52.9% | -61.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Luye Pharma Group Ltd ($2186) | 83.5% | 83.6% | 81.0% | 81.4% | |
| Consun Pharmaceutical Group Ltd ($1681) | 75.7% | 79.1% | 78.3% | 80.7% | |
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 82.0% | 81.5% | 80.9% | 79.9% | |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 77.5% | 76.4% | 77.7% | |
| China Health Group Inc ($8225) | 43.4% | 33.6% | 76.2% | 75.7% | |
| |
|---|
| Median (39 companies) | 40.8% | 39.7% | 50.9% | 50.0% | 57.4% |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | 39.4% | 6.8% | 2.2% | 8.4% | 24.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 193.8% | 205,840.0% | -15,344.8% | 49,650.0% | |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 38.8% | 65.4% | 70.9% | 93.3% | |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 60.6% | 21.0% | 28.8% | 61.1% | |
| U-Home Group Holdings Ltd ($2327) | 9.8% | -16.6% | -46.7% | 51.7% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 41.3% | 45.4% | 47.5% | 49.1% | |
| |
|---|
| Median (40 companies) | 20.3% | 20.2% | 21.4% | 21.6% | 17.5% |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | -0.7% | -88.1% | -7.1% | -8.9% | -5.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hao Wen Holdings Ltd ($8019) | 30.0% | 2.3% | 38.2% | 44.8% | |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 0.9% | 1.4% | 7.6% | 40.5% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 18.6% | 20.9% | 7.1% | 26.1% | |
| Tianda Pharmaceuticals Ltd ($455) | 6.0% | 3.9% | 10.5% | 24.4% | 22.9% |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 16.8% | 52.4% | 39.6% | 18.7% | |
| |
|---|
| Median (39 companies) | 8.5% | 8.9% | 7.6% | 4.5% | 22.9% |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | 7.0% | 33.6% | 1.2% | 5.6% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 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) | 13.7% | 18.3% | 22.0% | 25.4% | |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 12.6% | 14.0% | 17.8% | 23.5% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 26.1% | 22.0% | 22.4% | 22.7% | |
| |
|---|
| Median (41 companies) | 12.3% | 9.3% | 11.6% | 10.0% | 1.1% |
|---|
| Hong Kong Life Sciences and Technology Group Ltd ($8085) | -2.5% | -10.6% | -14.1% | -12.3% | -5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 2.3x | 3.7x | | 22.2x | |
| U-Home Group Holdings Ltd ($2327) | 10.1x | | | 9.9x | |
| Lansen Pharmaceutical Holdings Ltd ($503) | 1.7x | 2.8x | 3.4x | 4.7x | |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 5.4x | 4.0x | 3.4x | 4.3x | |
| United Laboratories International Holdings Ltd/The ($3933) | 6.5x | 4.6x | 4.2x | 4.0x | |
| |
|---|
| Median (34 companies) | -0.4x | -0.5x | -0.6x | -0.4x | -11.7x |
|---|
