Extrawell Pharmaceutical Holdings Ltd reports 94.2% Net Income decline in 2016 while 10.4% Revenue growth
29/06/2016 • About Extrawell Pharmaceutical Holdings Ltd (
$858) • By InTwits
Extrawell Pharmaceutical Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Extrawell Pharmaceutical Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -3.0%
- The company operates at negative EBITDA Margin: -18.6%
- Extrawell Pharmaceutical Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -4.6% for the sames years0
- Extrawell Pharmaceutical Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.7%. At the same time it's a lot of higher than industry average of 9.3%.
- CAPEX is quite volatile: 0.48 in FY2016, 4.6 in FY2015, 139 in FY2014, 31.2 in FY2013, 2.7 in FY2012
- The company has unprofitable business model: ROIC is at -3.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Extrawell Pharmaceutical Holdings Ltd ($858) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 157.4 | 151.1 | 150.7 | 128.8 | 142.2 | 10.4% |
| Gross Profit | 47.5 | 46.7 | 74.0 | 51.1 | 69.3 | 35.8% |
| SG&A | 36.7 | 36.5 | 74.2 | 65.5 | 69.7 | 6.4% |
| EBITDA | 17.6 | 14.3 | 41.2 | -80.4 | -26.4 | |
| Net Income | 20.4 | 10.9 | 13.8 | 565.5 | 32.8 | -94.2% |
Balance Sheet
|
|---|
| Cash | 140.1 | 136.5 | 103.7 | 152.2 | 181.0 | 18.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 21.0 | 25.0 | 29.7 | 18.8% |
Cash flow
|
|---|
| Capex | 2.7 | 31.2 | 139.3 | 4.6 | 0.5 | -89.5% |
Ratios
|
|---|
| Revenue growth | -20.8% | -4.0% | -0.3% | -14.5% | 10.4% | |
| EBITDA growth | 122.4% | -18.6% | 188.0% | -295.2% | -67.2% | |
| Gross Margin | 30.2% | 30.9% | 49.1% | 39.6% | 48.7% | 9.1% |
| EBITDA Margin | 11.2% | 9.5% | 27.3% | -62.4% | -18.6% | 43.8% |
| Net Income Margin | 13.0% | 7.2% | 9.2% | 438.9% | 23.1% | -415.9% |
| SG&A, % of revenue | 23.3% | 24.2% | 49.3% | 50.9% | 49.0% | -1.8% |
| CAPEX, % of revenue | 1.7% | 20.6% | 92.4% | 3.6% | 0.3% | -3.2% |
| ROIC | 2.3% | 1.7% | 6.1% | -10.2% | -3.0% | 7.2% |
| ROE | 5.6% | 2.9% | 3.4% | 79.9% | 3.3% | -76.6% |
| Net Debt/EBITDA | -8.0x | -9.5x | -2.0x | | | 0.0x |
Revenue and profitability
Extrawell Pharmaceutical Holdings Ltd's Revenue jumped on 10.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 48.1% to 49.0% in FY2016.
Gross Margin increased on 9.1 pp from 39.6% to 48.7% in FY2016. SG&A as a % of Revenue decreased slightly on 1.8 pp from 50.9% to 49.0% in FY2016.
Net Income marign dropped on 416 pp from 439% to 23.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.34%. The company's CAPEX/Revenue dropped on 20.3 pp from 20.6% in FY2013 to 0.34% in FY2016. It's average level of CAPEX/Revenue for the last three years was 32.1%.
Return on investment
The company operates at negative ROIC (-3.04%) and low but positive ROE (3.26%). ROIC increased on 7.2 pp from -10.2% to -3.0% in FY2016. ROE dropped on 76.6 pp from 79.9% to 3.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt surged on 18.8% while cash jumped on 18.9%.
Appendix 1: Peers in Pharmaceuticals
Below we provide Extrawell Pharmaceutical Holdings 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) | | 45.9% | -10.5% | 105.6% | 40.9% |
| 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) | 17.6% | 13.5% | 15.7% | 3.3% | 38.3% |
|---|
| Extrawell Pharmaceutical Holdings Ltd ($858) | | -4.0% | -0.3% | -14.5% | 10.4% |
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) | 40.9% | 39.7% | 50.9% | 50.0% | 40.8% |
|---|
| Extrawell Pharmaceutical Holdings Ltd ($858) | 30.2% | 30.9% | 49.1% | 39.6% | 48.7% |
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% | -2.1% |
|---|
| Extrawell Pharmaceutical Holdings Ltd ($858) | 11.2% | 9.5% | 27.3% | -62.4% | -18.6% |
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% | 7.5% | 4.7% | 11.5% |
|---|
| Extrawell Pharmaceutical Holdings Ltd ($858) | 1.7% | 20.6% | 92.4% | 3.6% | 0.3% |
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% | -1.7% |
|---|
| Extrawell Pharmaceutical Holdings Ltd ($858) | 2.3% | 1.7% | 6.1% | -10.2% | -3.0% |
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) | -0.2x | -0.4x | -0.6x | -0.4x | -11.8x |
|---|
