China 3D Digital Entertainment Ltd reports 376% CAPEX growth in 2016 and 105% Revenue growth
30/09/2016 • About China 3D Digital Entertainment Ltd (
$8078) • By InTwits
China 3D Digital Entertainment Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China 3D Digital Entertainment Ltd doesn't have a profitable business model yet: FY2016 ROIC is -22.2%
- The company operates at negative EBITDA Margin: -23.7%
- China 3D Digital Entertainment 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 -12.4%0
- China 3D Digital Entertainment Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.8%. At the same time it's a lot of higher than industry average of 22.1%.
- CAPEX is quite volatile: 42.9 in FY2016, 9.0 in FY2015, 4.0 in FY2014, 6.3 in FY2013, 3.7 in FY2012
- The company has unprofitable business model: ROIC is at -22.2%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is -2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China 3D Digital Entertainment Ltd ($8078) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17.7 | 70.0 | 199.7 | 111.2 | 228.2 | 105.3% |
| Gross Profit | 9.5 | 10.5 | 29.5 | -14.5 | -6.5 | |
| SG&A | | 25.4 | 44.1 | 81.5 | 149.8 | 83.8% |
| EBITDA | -5.2 | 10.7 | 25.4 | -54.2 | -54.1 | |
| Net Income | -9.1 | -21.2 | -15.7 | -97.1 | -182.7 | |
Balance Sheet
|
|---|
| Cash | 83.0 | 29.6 | 13.9 | 20.7 | 46.1 | 122.5% |
| Short Term Debt | 0.0 | 9.0 | 73.1 | 64.3 | 134.6 | 109.5% |
| Long Term Debt | 14.0 | 14.8 | 0.0 | 1.8 | 7.9 | 333.3% |
Cash flow
|
|---|
| Capex | 3.7 | 6.3 | 4.0 | 9.0 | 42.9 | 375.6% |
Ratios
|
|---|
| Revenue growth | -67.2% | 295.2% | 185.2% | -44.3% | 105.3% | |
| EBITDA growth | -228.9% | -303.5% | 138.1% | -313.5% | -0.1% | |
| Gross Margin | 53.9% | 14.9% | 14.8% | -13.1% | -2.9% | 10.2% |
| EBITDA Margin | -29.5% | 15.2% | 12.7% | -48.7% | -23.7% | 25.0% |
| Net Income Margin | -51.4% | -30.3% | -7.8% | -87.3% | -80.1% | 7.3% |
| SG&A, % of revenue | | 36.3% | 22.1% | 73.3% | 65.6% | -7.7% |
| CAPEX, % of revenue | 21.0% | 9.0% | 2.0% | 8.1% | 18.8% | 10.7% |
| ROIC | -4.6% | -3.8% | -1.5% | -23.9% | -22.2% | 1.7% |
| ROE | -5.9% | -10.0% | -6.2% | -35.6% | -64.5% | -28.9% |
| Net Debt/EBITDA | | -0.5x | 2.3x | | | 0.0x |
Revenue and profitability
The company's Revenue jumped on 105%. 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 jumped on 10.2 pp from -13.1% to -2.9% in FY2016. SG&A as a % of Revenue decreased on 7.7 pp from 73.3% to 65.6% in FY2016.
Net Income marign increased on 7.3 pp from -87.3% to -80.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
China 3D Digital Entertainment Ltd's CAPEX/Revenue was 18.8% in FY2016. China 3D Digital Entertainment Ltd showed CAPEX/Revenue growth of 9.8 pp from 9.0% in FY2013 to 18.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 9.6%.
Return on investment
The company operates at negative ROIC (-22.18%) and ROE (-64.46%). ROIC increased slightly on 1.7 pp from -23.9% to -22.2% in FY2016. ROE dropped on 28.9 pp from -35.6% to -64.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt jumped on 116% while cash surged on 123%.
Appendix 1: Peers in Entertainment
Below we provide China 3D Digital Entertainment 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 (27 companies) | 4.5% | 10.4% | 1.1% | -4.3% | 3.3% |
|---|
| China 3D Digital Entertainment Ltd ($8078) | | 295.2% | 185.2% | -44.3% | 105.3% |
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% | 91.0% |
| 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 (23 companies) | 40.9% | 52.7% | 44.3% | 44.3% | 49.9% |
|---|
| China 3D Digital Entertainment Ltd ($8078) | 53.9% | 14.9% | 14.8% | -13.1% | -2.9% |
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% | 19.5% | 2.2% | -10.2% |
|---|
| China 3D Digital Entertainment Ltd ($8078) | -29.5% | 15.2% | 12.7% | -48.7% | -23.7% |
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) | 8.5% | 6.6% | 4.8% | 8.4% | 2.5% |
|---|
| China 3D Digital Entertainment Ltd ($8078) | 21.0% | 9.0% | 2.0% | 8.1% | 18.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | |
| 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% | 0.7% | -1.7% | -5.5% |
|---|
| China 3D Digital Entertainment Ltd ($8078) | -4.6% | -3.8% | -1.5% | -23.9% | -22.2% |
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 (14 companies) | -0.1x | -0.4x | -0.4x | -0.5x | -0.2x |
|---|
