China Vanguard Group Ltd Net Income dropped on 1,182% and Revenue dropped on 72.0%
27/09/2016 • About China Vanguard Group Ltd (
$8156) • By InTwits
China Vanguard Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Vanguard Group Ltd is a company in decline: FY2016 revenue growth was -72.0%, 5 years revenue CAGR was -21.0%
- The company operates at negative EBITDA Margin: -72.8%
- China Vanguard Group Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -1.0%0
- China Vanguard Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.6%. At the same time it's a lot of higher than industry average of 9.3%.
- CAPEX is quite volatile: 9.2 in FY2016, 5.2 in FY2015, 3.9 in FY2014, 22.8 in FY2013, 5.3 in FY2012
- The company has unprofitable business model: ROIC is at -10.2%
- 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.
China Vanguard Group Ltd ($8156) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 104.8 | 39.1 | 95.8 | 123.7 | 34.7 | -72.0% |
| Gross Profit | 66.9 | 34.5 | 89.8 | 117.8 | 31.5 | -73.2% |
| SG&A | | 70.5 | 68.4 | 94.5 | 113.2 | 19.8% |
| EBITDA | -15.8 | -20.2 | 28.7 | 28.4 | -25.2 | -188.9% |
| Net Income | -1,107.5 | -41.6 | 14.9 | 19.1 | -206.8 | -1,182.2% |
Balance Sheet
|
|---|
| Cash | 81.2 | 3.6 | 151.9 | 92.9 | 33.0 | -64.5% |
| Short Term Debt | 32.4 | 54.2 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 74.3 | 76.4 | 64.3 | 73.2 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 5.3 | 22.8 | 3.9 | 5.2 | 9.2 | 75.8% |
Ratios
|
|---|
| Revenue growth | -7.0% | -62.7% | 145.0% | 29.2% | -72.0% | |
| EBITDA growth | -591.3% | 28.3% | -242.0% | -1.3% | -188.9% | |
| Gross Margin | 63.8% | 88.2% | 93.8% | 95.2% | 91.0% | -4.2% |
| EBITDA Margin | -15.0% | -51.8% | 30.0% | 22.9% | -72.8% | -95.7% |
| Net Income Margin | -1,056.4% | -106.5% | 15.5% | 15.4% | -596.6% | -612.1% |
| SG&A, % of revenue | | 180.4% | 71.4% | 76.4% | 326.8% | 250.4% |
| CAPEX, % of revenue | 5.0% | 58.3% | 4.0% | 4.2% | 26.5% | 22.3% |
| ROIC | -4.3% | -14.3% | 7.6% | 5.7% | -10.2% | -15.9% |
| ROE | -186.6% | -91.7% | 8.1% | 5.7% | -85.8% | -91.5% |
| Net Debt/EBITDA | | | -3.0x | -0.7x | | 0.7x |
Revenue and profitability
China Vanguard Group Ltd's Revenue dropped on 72.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -22.6% to -15.2% in FY2016.
Gross Margin decreased on 4.2 pp from 95.2% to 91.0% in FY2016. SG&A as a % of Revenue surged on 250 pp from 76.4% to 327% in FY2016.
Net Income marign dropped on 612 pp from 15.4% to -597% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 26.5% in FY2016. CAPEX/Revenue dropped on 31.8 pp from 58.3% in FY2013 to 26.5% in FY2016. For the last three years the average CAPEX/Revenue was 11.6%.
Return on investment
The company operates at negative ROIC (-10.19%) and ROE (-85.83%). ROIC dropped on 15.9 pp from 5.7% to -10.2% in FY2016. ROE dropped on 91.5 pp from 5.7% to -85.8% in FY2016.
Leverage (Debt)
The company paid down all the debt in FY2016. Cash dropped on 64.5%.
Appendix 1: Peers in Entertainment
Below you can find China Vanguard Group Ltd benchmarking vs. other companies in Entertainment 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, %
| 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 (27 companies) | 4.5% | 11.6% | 1.1% | -4.8% | 3.3% |
|---|
| China Vanguard Group Ltd ($8156) | | -62.7% | 145.0% | 29.2% | -72.0% |
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% |
| 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% | |
| Nan Hai Corp Ltd ($680) | 62.2% | 65.3% | 65.8% | 62.1% | |
| |
|---|
| Median (23 companies) | 40.9% | 48.4% | 44.0% | 41.2% | 44.4% |
|---|
| China Vanguard Group Ltd ($8156) | 63.8% | 88.2% | 93.8% | 95.2% | 91.0% |
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 (27 companies) | 24.0% | 20.3% | 17.0% | -1.7% | -10.2% |
|---|
| China Vanguard Group Ltd ($8156) | -15.0% | -51.8% | 30.0% | 22.9% | -72.8% |
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 (27 companies) | 8.9% | 6.6% | 4.8% | 8.4% | 2.5% |
|---|
| China Vanguard Group Ltd ($8156) | 5.0% | 58.3% | 4.0% | 4.2% | 26.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | |
| China Animation Characters Co Ltd ($1566) | | 119.2% | 117.8% | 24.1% | 14.0% |
| 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% |
| |
|---|
| Median (28 companies) | -1.1% | 5.1% | -0.3% | -2.6% | -5.5% |
|---|
| China Vanguard Group Ltd ($8156) | -4.3% | -14.3% | 7.6% | 5.7% | -10.2% |
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 | -0.2x | -0.4x | -0.1x |
|---|
| China Vanguard Group Ltd ($8156) | | | -3.0x | -0.7x | |
