Looking for a growth stock? Pay attention to Perfect Shape PRC Holdings Ltd
07/07/2016 • About Perfect Shape PRC Holdings Ltd (
$1830) • By InTwits
Pay attention to Perfect Shape PRC Holdings Ltd as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Perfect Shape PRC Holdings Ltd showed fast growth in the last financial year. Perfect Shape PRC Holdings Ltd's revenue surged on 20.6% in FY2016. The growth also happened in EBITDA of 11.2% for the same period.
In the longer period Perfect Shape PRC Holdings Ltd showed fast revenue growth of 25.7% from FY2013 to FY2016 annualy. EBITDA surged on 23.2% from FY2013 to FY2016 annualy.
Perfect Shape PRC Holdings Ltd ($1830) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 381 | 443 | 470 | 729 | 879 |
|---|
| Revenue growth, % | | 16.2% | 6.1% | 55.0% | 20.6% |
|---|
| SG&A, % | | | | 10.1% | 12.9% |
|---|
| EBITDA | 105 | 129 | 124 | 217 | 241 |
|---|
| EBITDA growth, % | | 23.0% | -3.5% | 74.3% | 11.2% |
|---|
| EBITDA margin, % | 27.5% | 29.1% | 26.5% | 29.8% | 27.4% |
|---|
| Net Income | 69 | 78 | 83 | 135 | 130 |
|---|
| Net Income margin, % | 18.0% | 17.6% | 17.7% | 18.5% | 14.8% |
|---|
| |
| CAPEX | 23 | 39 | 36 | 181 | 110 |
|---|
| CAPEX/Revenue, % | 6.12% | 8.89% | 7.74% | 24.8% | 12.5% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 206 | 109 | 179 | 387 | 235 |
|---|
| Net Debt/EBITDA | -2.0x | -0.8x | -1.4x | -1.8x | -1.0x |
|---|
| |
| ROIC, % | 62.8% | 44.1% | 37.7% | 44.1% | 32.0% |
|---|
| ROE, % | 50.9% | 33.7% | 34.6% | 36.9% | 27.1% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years the company's EBITDA margin decreased on 1.70 pp from 29.1% in FY2013 to 27.4% in FY2016.
We call Perfect Shape PRC Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 32.0%. During the last three years it dropped - it was 44.1% in FY2013. Average ROIC for the last three years was 37.9%.
The company's Net Income margin dropped on 3.70 pp from 18.5% to 14.8% in FY2016. If we look for the longer period Perfect Shape PRC Holdings Ltd showed big decline in Net Income margin of 2.80 pp from 17.6% in FY2013 to 14.8% in FY2016.
Perfect Shape PRC Holdings Ltd operates at ROE of 27.1%. For the last three years the average ROE was 32.9%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.Perfect Shape PRC Holdings Ltd's CAPEX/Revenue was 12.5% in FY2016. The company showed fast CAPEX/Revenue growth of 3.58 pp from 8.89% in FY2013 to 12.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 15.0%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -1.0x Net Debt/EBITDA. If we look for the longer period Perfect Shape PRC Holdings Ltd showed fast leverage growth of 0.12x from -0.85x in FY2013 to -0.97x in FY2016.
Valuation vs. comparable companies
The market closed today at 2.6x EV/EBITDA for Perfect Shape PRC Holdings Ltd which is 92% lower than 32.8x Leisure Time peer group avearge calculated on the basis of 12 companies. At the end of trading day today Perfect Shape PRC Holdings Ltd traded at 6.6x P/E which is 38.9% lower than 10.9x Leisure Time peer group avearge calculated on the basis of 3 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 4.8x EV/(EBITDA-CAPEX) for Perfect Shape PRC Holdings Ltd which is higher vs. -2.6x Leisure Time peer group avearge calculated on the basis of 3 companies.
Peers in Leisure Time
Below we provide Perfect Shape PRC Holdings Ltd benchmarking against other companies in Leisure Time 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Genting Hong Kong Ltd ($678) | 5.3% | 6.6% | 2.9% | 20.9% | |
| Travel Expert Asia Enterprises Ltd ($1235) | | 15.3% | 19.5% | 18.9% | 3.2% |
| China Jiuhao Health Industry Corp Ltd ($419) | 61.8% | -23.6% | -12.7% | 11.5% | |
| EGL Holdings Co Ltd ($6882) | 9.5% | 20.7% | 2.3% | 10.3% | |
| Water Oasis Group Ltd ($1161) | -16.3% | -23.7% | 8.0% | 1.9% | |
| |
|---|
| Median (11 companies) | 6.3% | -6.6% | 2.6% | -1.8% | 3.2% |
|---|
| Perfect Shape PRC Holdings Ltd ($1830) | | 16.2% | 6.1% | 55.0% | 20.6% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Travel Expert Asia Enterprises Ltd ($1235) | | | | 90.7% | 85.1% |
| Feiyu Technology International Co Ltd ($1022) | 96.9% | 95.4% | 87.5% | 83.1% | |
| Sino Splendid Holdings Ltd ($8006) | 51.7% | 51.4% | 51.9% | 53.9% | |
| China Travel International Investment Hong Kong Ltd ($308) | 46.1% | 47.8% | 46.0% | 45.6% | |
| China Jiuhao Health Industry Corp Ltd ($419) | 57.0% | 13.5% | 23.4% | 44.9% | |
| |
|---|
| Median (9 companies) | 46.1% | 21.4% | 21.8% | 44.9% | 85.1% |
|---|
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Travel International Investment Hong Kong Ltd ($308) | 28.2% | 29.1% | 48.5% | 31.7% | |
| Feiyu Technology International Co Ltd ($1022) | 77.0% | 44.0% | 51.0% | 30.0% | |
| Travel Expert Asia Enterprises Ltd ($1235) | 17.4% | 16.2% | 18.3% | 15.0% | 11.8% |
| Water Oasis Group Ltd ($1161) | 6.5% | 4.7% | 11.4% | 13.1% | |
| EGL Holdings Co Ltd ($6882) | 3.7% | 8.1% | 5.8% | 9.8% | |
| |
|---|
| Median (11 companies) | 6.5% | 8.1% | 7.8% | 0.9% | 11.8% |
|---|
| Perfect Shape PRC Holdings Ltd ($1830) | 27.5% | 29.1% | 26.5% | 29.8% | 27.4% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Genting Hong Kong Ltd ($678) | 16.6% | 25.4% | 33.0% | 58.1% | |
| China Jiuhao Health Industry Corp Ltd ($419) | 2.1% | 31.8% | 67.3% | 43.3% | |
| China Travel International Investment Hong Kong Ltd ($308) | 13.4% | 28.3% | 29.9% | 10.9% | |
| Water Oasis Group Ltd ($1161) | 3.7% | 4.0% | 2.8% | 3.5% | |
| Feiyu Technology International Co Ltd ($1022) | 6.3% | 1.6% | 3.2% | 3.1% | |
| |
|---|
| Median (11 companies) | 3.0% | 2.8% | 2.8% | 2.8% | 9.9% |
|---|
| Perfect Shape PRC Holdings Ltd ($1830) | 6.1% | 8.9% | 7.7% | 24.8% | 12.5% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| EGL Holdings Co Ltd ($6882) | 30.4% | 63.2% | 39.4% | 58.3% | |
| Travel Expert Asia Enterprises Ltd ($1235) | 50.9% | 26.7% | 29.8% | 23.0% | 15.9% |
| Water Oasis Group Ltd ($1161) | 5.3% | 1.7% | 15.7% | 19.2% | |
| Feiyu Technology International Co Ltd ($1022) | 329.5% | 19.2% | 17.1% | 6.1% | |
| China Travel International Investment Hong Kong Ltd ($308) | 5.6% | 5.0% | 9.6% | 5.0% | |
| |
|---|
| Median (11 companies) | 2.0% | 1.7% | 3.8% | -1.7% | 15.9% |
|---|
| Perfect Shape PRC Holdings Ltd ($1830) | 62.8% | 44.1% | 37.7% | 44.1% | 32.0% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Travel Expert Asia Enterprises Ltd ($1235) | -1.3x | -1.2x | -1.7x | -0.3x | -0.0x |
| China Travel International Investment Hong Kong Ltd ($308) | -1.7x | -1.1x | -1.1x | -2.0x | |
| EGL Holdings Co Ltd ($6882) | -4.5x | -2.5x | -3.3x | -2.4x | |
| Water Oasis Group Ltd ($1161) | -3.2x | -5.1x | -2.8x | -2.6x | |
| Feiyu Technology International Co Ltd ($1022) | -0.3x | -1.9x | -3.2x | -4.3x | |
| |
|---|
| Median (6 companies) | -0.8x | -1.9x | -2.8x | -2.5x | -0.0x |
|---|
| Perfect Shape PRC Holdings Ltd ($1830) | -2.0x | -0.8x | -1.4x | -1.8x | -1.0x |
