Neptune Group Ltd EBITDA dropped on 54.6% and EBITDA Margin dropped on 22.7 pp from 99.0% to 76.3%
19/12/2016 • About Neptune Group Ltd (
$70) • By InTwits
Neptune Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Neptune Group Ltd is a company in decline: FY2016 revenue growth was -41.2%, 5 years revenue CAGR was -7.6%
- Neptune Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 21.2%.
- CAPEX is quite volatile: 0.66 in FY2016, 0 in FY2015, 0.17 in FY2014, 56.7 in FY2013, 0 in FY2012
- The company has potentially unprofitable business model: ROIC is at 0.3%
- It operates with high leverage: Net Debt/EBITDA is -0.6x while industry average is -2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Neptune Group Ltd ($70) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 433.4 | 577.5 | 710.4 | 473.6 | 278.7 | -41.2% |
| SG&A | 6.3 | 10.6 | 8.0 | 6.2 | 11.3 | 82.7% |
| EBITDA | 427.1 | 569.2 | 615.2 | 468.9 | 212.7 | -54.6% |
| Net Income | 282.9 | 288.3 | 148.8 | -828.0 | -202.1 | |
Balance Sheet
|
|---|
| Cash | 119.5 | 95.6 | 45.2 | 58.2 | 148.6 | 155.2% |
| Short Term Debt | 0.0 | 23.2 | 20.9 | 18.8 | 16.4 | -12.6% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.0 | 56.7 | 0.2 | 0.0 | 0.7 | |
Ratios
|
|---|
| Revenue growth | 4.5% | 33.3% | 23.0% | -33.3% | -41.2% | |
| EBITDA growth | 1.9% | 33.3% | 8.1% | -23.8% | -54.6% | |
| EBITDA Margin | 98.6% | 98.6% | 86.6% | 99.0% | 76.3% | -22.7% |
| Net Income Margin | 65.3% | 49.9% | 20.9% | -174.8% | -72.5% | 102.3% |
| SG&A, % of revenue | 1.5% | 1.8% | 1.1% | 1.3% | 4.1% | 2.8% |
| CAPEX, % of revenue | 0.0% | 9.8% | 0.0% | 0.0% | 0.2% | 0.2% |
| ROIC | 22.8% | 23.8% | 21.1% | 18.1% | 0.3% | -17.8% |
| ROE | 21.7% | 17.7% | 7.8% | -52.4% | -18.2% | 34.3% |
| Net Debt/EBITDA | -0.3x | -0.1x | -0.0x | -0.1x | -0.6x | -0.5x |
Revenue and profitability
Neptune Group Ltd's Revenue dropped on 41.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 8.3% to 12.3% in FY2016.
SG&A as a % of Revenue increased on 2.8 pp from 1.3% to 4.1% in FY2016.
Net Income marign surged on 102 pp from -175% to -72.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.24%. CAPEX/Revenue decreased on 9.6 pp from 9.8% in FY2013 to 0.24% in FY2016.
Return on investment
The company operates at low but positive ROIC (0.35%) and negative ROE (-18.15%). ROIC dropped on 17.8 pp from 18.1% to 0.35% in FY2016. ROE jumped on 34.3 pp from -52.4% to -18.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 0.5x from -0.1x to -0.6x in FY2016. Debt dropped on 12.6% while cash jumped on 155%.
Appendix 1: Peers in Entertainment
Below you can find Neptune 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) | | 4.3% | 159.4% | 46.3% | -97.5% |
| |
|---|
| Median (27 companies) | 8.7% | 10.4% | 1.1% | -4.3% | 3.3% |
|---|
| Neptune Group Ltd ($70) | | 33.3% | 23.0% | -33.3% | -41.2% |
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% | -635.1% |
| 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 (24 companies) | 42.8% | 48.7% | 44.1% | 42.7% | 36.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | 36.6% | 44.6% | 74.6% | 73.6% | -1,418.4% |
| 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% | |
| China Vanguard Group Ltd ($8156) | -15.0% | -51.8% | 30.0% | 22.9% | -72.8% |
| |
|---|
| Median (27 companies) | 20.2% | 19.2% | 17.0% | -1.7% | -14.4% |
|---|
| Neptune Group Ltd ($70) | 98.6% | 98.6% | 86.6% | 99.0% | 76.3% |
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% | 6.2% |
|---|
| Neptune Group Ltd ($70) | 0.0% | 9.8% | 0.0% | 0.0% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | -17.0% |
| China Animation Characters Co Ltd ($1566) | | 119.2% | 117.8% | 24.1% | 14.0% |
| 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 (28 companies) | -1.1% | 2.3% | -0.3% | -2.6% | -9.3% |
|---|
| Neptune Group Ltd ($70) | 22.8% | 23.8% | 21.1% | 18.1% | 0.3% |
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 | -0.6x | -0.4x | -0.6x | -0.2x |
|---|
| Neptune Group Ltd ($70) | -0.3x | -0.1x | -0.0x | -0.1x | -0.6x |
