Mei Ah Entertainment Group Ltd reports 5.7% revenue growth in FY2016 and 0.79 pp EBITDA Margin decline from -17.0% to -17.8%
29/06/2016 • About Mei Ah Entertainment Group Ltd (
$391) • By InTwits
Mei Ah Entertainment Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mei Ah Entertainment Group Ltd doesn't have a profitable business model yet: FY2016 ROIC is -8.4%
- The company operates at negative EBITDA Margin: -17.8%
- EBITDA Margin is quite volatile: -17.8% in FY2016, -17.0% in FY2015, 22.1% in FY2014, 24.5% in FY2013, 28.5% in FY2012
- Mei Ah Entertainment Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's a lot of higher than industry average of 22.1%.
- CAPEX is quite volatile: 0.99 in FY2016, 2.2 in FY2015, 36.7 in FY2014, 19.9 in FY2013, 24.3 in FY2012
- The company has unprofitable business model: ROIC is at -8.4%
- It operates with high leverage: Net Debt/EBITDA is -1.8x while industry average is -2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mei Ah Entertainment Group Ltd ($391) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 358.8 | 555.8 | 144.8 | 119.9 | 126.8 | 5.7% |
| Gross Profit | 110.6 | 69.3 | 62.2 | 57.5 | 31.8 | -44.6% |
| SG&A | 118.1 | 169.1 | 97.2 | 126.7 | 103.6 | -18.2% |
| EBITDA | 102.3 | 136.0 | 32.0 | -20.4 | -22.6 | |
| Net Income | -11.4 | -48.7 | -23.9 | -39.3 | -66.2 | |
Balance Sheet
|
|---|
| Cash | 53.5 | 100.4 | 74.3 | 32.1 | 228.6 | 612.7% |
| Short Term Debt | 32.7 | 9.0 | 20.2 | 42.6 | 1.5 | -96.5% |
| Long Term Debt | 5.5 | 0.0 | 11.9 | 10.6 | 8.8 | -17.2% |
Cash flow
|
|---|
| Capex | 24.3 | 19.9 | 36.7 | 2.2 | 1.0 | -54.6% |
Ratios
|
|---|
| Revenue growth | 79.2% | 54.9% | -73.9% | -17.2% | 5.7% | |
| EBITDA growth | 18.9% | 33.0% | -76.4% | -163.7% | 10.7% | |
| Gross Margin | 30.8% | 12.5% | 42.9% | 47.9% | 25.1% | -22.8% |
| EBITDA Margin | 28.5% | 24.5% | 22.1% | -17.0% | -17.8% | -0.8% |
| Net Income Margin | -3.2% | -8.8% | -16.5% | -32.8% | -52.2% | -19.4% |
| SG&A, % of revenue | 32.9% | 30.4% | 67.2% | 105.7% | 81.7% | -24.0% |
| CAPEX, % of revenue | 6.8% | 3.6% | 25.4% | 1.8% | 0.8% | -1.0% |
| ROIC | 2.5% | -4.8% | -3.6% | -8.3% | -8.4% | -0.1% |
| ROE | -1.9% | -8.3% | -4.3% | -7.3% | -10.3% | -3.0% |
| Net Debt/EBITDA | -0.1x | -0.7x | -1.3x | | | 0.0x |
Revenue and profitability
The company's Revenue increased on 5.7%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 232 pp from -78.0% to -310% in FY2016.
Gross Margin dropped on 22.8 pp from 47.9% to 25.1% in FY2016. SG&A as a % of Revenue dropped on 24.0 pp from 106% to 81.7% in FY2016.
Net Income marign dropped on 19.4 pp from -32.8% to -52.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.78% in FY2016. The company showed decline in CAPEX/Revenue of 2.8 pp from 3.6% in FY2013 to 0.78% in FY2016. For the last three years the average CAPEX/Revenue was 9.3%.
Return on investment
The company operates at negative ROIC (-8.35%) and ROE (-10.28%). ROIC showed almost no change in FY2016. ROE decreased on 3.0 pp from -7.3% to -10.3% in FY2016.
Leverage (Debt)
Debt level is -1.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 80.7% while cash jumped on 613%.
Appendix 1: Peers in Entertainment
Below we provide Mei Ah Entertainment Group Ltd benchmarking against other companies in Entertainment 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 |
|---|
| Neo Telemedia Ltd ($8167) | 268.8% | -60.2% | -13.4% | 5,442.4% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | -57.9% | 181.2% | -20.1% | 162.4% | |
| Alibaba Pictures Group Ltd ($1060) | 169.4% | -45.8% | -63.8% | 108.3% | |
| SMI Holdings Group Ltd ($198) | 16.4% | 65.4% | 16.4% | 77.2% | |
| Universe International Holdings Ltd ($1046) | -42.2% | 4.3% | 159.4% | 46.3% | |
| |
|---|
| Median (26 companies) | 0.9% | 11.0% | 1.2% | -4.6% | -1.0% |
|---|
| Mei Ah Entertainment Group Ltd ($391) | | 54.9% | -73.9% | -17.2% | 5.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amax International Holdings Ltd ($959) | | 92.1% | 98.6% | 96.6% | 70.6% |
| China Vanguard Group Ltd ($8156) | 63.8% | 88.2% | 93.8% | 95.2% | |
| Universe International Holdings Ltd ($1046) | 22.1% | 36.7% | 11.4% | 84.8% | |
| Cheung Wo International Holdings Ltd ($9) | -17.5% | 71.4% | 77.7% | 77.8% | |
| REXLot Holdings Ltd ($555) | 70.2% | 73.1% | 73.4% | 67.4% | |
| |
|---|
| Median (22 companies) | 44.9% | 56.8% | 44.1% | 42.7% | 64.3% |
|---|
| Mei Ah Entertainment Group Ltd ($391) | 30.8% | 12.5% | 42.9% | 47.9% | 25.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Neptune Group Ltd ($70) | 98.6% | 98.6% | 86.6% | 99.0% | |
| Universe International Holdings Ltd ($1046) | 36.6% | 44.6% | 74.6% | 73.6% | |
| Haichang Holdings Ltd ($2255) | 55.0% | 44.5% | 46.3% | 56.6% | |
| REXLot Holdings Ltd ($555) | 53.7% | 55.1% | 6.1% | 40.5% | |
| SMI Holdings Group Ltd ($198) | 19.2% | 35.4% | 34.5% | 31.2% | |
| |
|---|
| Median (26 companies) | 19.7% | 17.2% | 14.9% | 0.2% | -10.2% |
|---|
| Mei Ah Entertainment Group Ltd ($391) | 28.5% | 24.5% | 22.1% | -17.0% | -17.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Star Cultural Media Group Ltd ($8172) | 8.9% | 0.0% | 0.0% | 848.3% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | 1,237.1% | 771.1% | 799.0% | 508.9% | |
| Cheung Wo International Holdings Ltd ($9) | 90.3% | 465.2% | 383.2% | 202.4% | |
| Haichang Holdings Ltd ($2255) | 21.4% | 18.5% | 10.3% | 64.2% | |
| Amax International Holdings Ltd ($959) | 10.4% | 2.7% | 17.2% | 59.8% | 42.5% |
| |
|---|
| Median (26 companies) | 9.7% | 9.0% | 4.7% | 8.5% | 6.2% |
|---|
| Mei Ah Entertainment Group Ltd ($391) | 6.8% | 3.6% | 25.4% | 1.8% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | |
| Neptune Group Ltd ($70) | 22.8% | 23.8% | 21.1% | 18.1% | |
| SMI Holdings Group Ltd ($198) | 1.3% | 8.4% | 9.9% | 10.5% | |
| Dynam Japan Holdings Co Ltd ($6889) | 23.8% | 25.4% | 21.8% | 10.5% | 12.6% |
| Haichang Holdings Ltd ($2255) | 7.1% | 8.1% | 8.6% | 8.9% | |
| |
|---|
| Median (27 companies) | -1.1% | 3.7% | 0.3% | -1.8% | -8.2% |
|---|
| Mei Ah Entertainment Group Ltd ($391) | 2.5% | -4.8% | -3.6% | -8.3% | -8.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 1.1x | 4.2x | 2.7x | 25.8x | |
| Nan Hai Corp Ltd ($680) | 80.8x | 3.5x | 20.8x | 12.6x | |
| Haichang Holdings Ltd ($2255) | 7.0x | 4.7x | 1.7x | 1.7x | |
| SMI Holdings Group Ltd ($198) | 2.0x | 1.6x | 2.1x | 1.6x | |
| REXLot Holdings Ltd ($555) | -0.0x | -0.2x | 7.2x | 1.6x | |
| |
|---|
| Median (13 companies) | -0.1x | -0.5x | -0.0x | -0.4x | -0.2x |
|---|
