CP Lotus Corp Net Debt / EBITDA jumped on 6.9x from 3.0x to 9.8x in 2016 while Revenue decreased on 5.4%
23/02/2017 • About CP Lotus Corp (
$121) • By InTwits
CP Lotus Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CP Lotus Corp doesn't have a profitable business model yet: FY2016 ROIC is -2.6%
- EBITDA Margin is quite volatile: 1.2% in FY2016, 3.4% in FY2015, 2.4% in FY2014, 1.9% in FY2013, -0.2% in FY2012
- The company has unprofitable business model: ROIC is at -2.6%
- It operates with high leverage: Net Debt/EBITDA is 9.8x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CP Lotus Corp ($121) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10,677 | 10,882 | 10,912 | 10,660 | 10,086 | -5.4% |
| Gross Profit | 1,763 | 1,793 | 1,838 | 1,831 | 1,739 | -5.1% |
| SG&A | 2,427 | 2,269 | 2,264 | 2,249 | 2,295 | 2.0% |
| EBITDA | -19 | 205 | 259 | 362 | 121 | -66.6% |
| Net Income | -392 | -97 | -58 | -18 | -538 | |
Balance Sheet
|
|---|
| Cash | 416 | 266 | 140 | 166 | 205 | 23.6% |
| Short Term Debt | 1,777 | 330 | 269 | 321 | 234 | -26.9% |
| Long Term Debt | 180 | 1,272 | 1,186 | 929 | 1,161 | 25.0% |
Cash flow
|
|---|
| Capex | 281 | 214 | 249 | 325 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 6.6% | 1.9% | 0.3% | -2.3% | -5.4% | |
| EBITDA growth | -105.2% | -1,199.6% | 26.2% | 39.9% | -66.6% | |
| Gross Margin | 16.5% | 16.5% | 16.8% | 17.2% | 17.2% | 0.1% |
| EBITDA Margin | -0.2% | 1.9% | 2.4% | 3.4% | 1.2% | -2.2% |
| Net Income Margin | -3.7% | -0.9% | -0.5% | -0.2% | -5.3% | -5.2% |
| SG&A, % of revenue | 22.7% | 20.9% | 20.7% | 21.1% | 22.8% | 1.7% |
| CAPEX, % of revenue | 2.6% | 2.0% | 2.3% | 3.0% | | -3.0% |
| ROIC | -6.5% | 0.5% | 2.0% | 4.8% | -2.6% | -7.4% |
| ROE | -21.0% | -5.2% | -3.2% | -1.0% | -31.8% | -30.8% |
| Net Debt/EBITDA | | 6.5x | 5.1x | 3.0x | 9.8x | 6.9x |
Revenue and profitability
The company's Revenue decreased on 5.4%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 3.4% to 1.2% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 1.7 pp from 21.1% to 22.8% in FY2016.
Net Income marign decreased on 5.2 pp from -0.17% to -5.3% in FY2016.
Return on investment
The company operates at negative ROIC (-2.60%) and ROE (-31.80%). ROIC decreased on 7.4 pp from 4.8% to -2.6% in FY2016. ROE dropped on 30.8 pp from -0.98% to -31.8% in FY2016.
Leverage (Debt)
Debt level is 9.8x Net Debt / EBITDA and 11.5x Debt / EBITDA. Net Debt / EBITDA surged on 6.9x from 3.0x to 9.8x in FY2016. Debt jumped on 11.7% while cash surged on 23.6%.
Management team
Weng Hai Xin is a the company's CEO. Weng Hai Xin has spent 3 years at the company.
Appendix 1: Peers in Food
Below you can find CP Lotus Corp benchmarking vs. other companies in Food 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 |
|---|
| Imperial Pacific International Holdings Ltd ($1076) | -27.6% | -18.5% | 2.7% | 70.3% | |
| China Shengmu Organic Milk Ltd ($1432) | 80.0% | 63.2% | 86.4% | 45.4% | |
| Chinese Food and Beverage Group ($8272) | 207.7% | 149.2% | 26.8% | 31.6% | |
| Huisheng International Holdings Ltd ($1340) | -2.4% | 5.6% | 8.7% | 25.9% | |
| Jiashili Group Ltd ($1285) | 14.9% | 15.1% | 12.3% | 19.8% | |
| |
|---|
| Median (42 companies) | 10.3% | 9.0% | 5.5% | -3.7% | -16.6% |
|---|
| CP Lotus Corp ($121) | | 1.9% | 0.3% | -2.3% | -5.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hung Fook Tong Group Holdings Ltd ($1446) | 60.7% | 60.0% | 58.7% | 60.7% | |
| Honworld Group Ltd ($2226) | 57.2% | 59.0% | 57.8% | 56.4% | |
| Yashili International Holdings Ltd ($1230) | 53.7% | 53.5% | 51.2% | 50.8% | |
| Natural Dairy NZ Holdings Ltd ($462) | -13.7% | 27.5% | 48.8% | 49.6% | |
| China Shengmu Organic Milk Ltd ($1432) | 33.4% | 42.9% | 50.2% | 47.7% | |
| |
|---|
| Median (41 companies) | 16.8% | 20.3% | 22.2% | 23.7% | 19.7% |
|---|
| CP Lotus Corp ($121) | 16.5% | 16.5% | 16.8% | 17.2% | 17.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shenguan Holdings Group Ltd ($829) | 58.7% | 59.2% | 54.5% | 43.6% | |
| Honworld Group Ltd ($2226) | 44.4% | 42.1% | 42.0% | 42.9% | |
| China Shengmu Organic Milk Ltd ($1432) | 31.5% | 38.3% | 47.1% | 41.9% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 45.1% | 47.9% | 47.1% | 37.2% | 36.0% |
| YuanShengTai Dairy Farm Ltd ($1431) | 40.3% | 48.4% | 47.1% | 35.4% | |
| |
|---|
| Median (41 companies) | 8.1% | 7.1% | 7.9% | 8.5% | 4.6% |
|---|
| CP Lotus Corp ($121) | -0.2% | 1.9% | 2.4% | 3.4% | 1.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 98.2% | 29.8% | 132.0% | 109.8% | 37.5% |
| Imperial Pacific International Holdings Ltd ($1076) | 0.0% | 0.0% | 15.6% | 88.5% | |
| China Modern Dairy Holdings Ltd ($1117) | 50.6% | | 18.7% | 42.4% | |
| Labixiaoxin Snacks Group Ltd ($1262) | 13.3% | 10.3% | 14.6% | 32.0% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 26.1% | 18.3% | 43.4% | 30.1% | |
| |
|---|
| Median (40 companies) | 5.9% | 5.6% | 5.1% | 4.9% | 0.7% |
|---|
| CP Lotus Corp ($121) | 2.6% | 2.0% | 2.3% | 3.0% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Major Holdings Ltd ($8209) | | 23.1% | 13.8% | 22.3% | 7.8% |
| Jiashili Group Ltd ($1285) | 45.6% | 51.8% | 27.8% | 22.2% | |
| Want Want China Holdings Ltd ($151) | 27.9% | 29.4% | 22.8% | 21.8% | |
| China Shengmu Organic Milk Ltd ($1432) | 16.4% | 19.6% | 22.5% | 17.3% | |
| Honworld Group Ltd ($2226) | 50.4% | 44.5% | 23.6% | 16.5% | |
| |
|---|
| Median (43 companies) | 8.4% | 7.3% | 7.4% | 5.6% | 2.2% |
|---|
| CP Lotus Corp ($121) | -6.5% | 0.5% | 2.0% | 4.8% | -2.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ausnutria Dairy Corp Ltd ($1717) | -1.4x | 0.8x | 1.7x | 27.9x | |
| Beijing Jingkelong Co Ltd ($814) | 5.0x | 4.8x | 5.3x | 9.3x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.8x | 3.8x | 4.5x | 5.6x | |
| China Kangda Food Co Ltd ($834) | 2.8x | 2.5x | 2.3x | 5.4x | |
| China Modern Dairy Holdings Ltd ($1117) | 3.7x | 5.2x | 4.1x | 5.3x | |
| |
|---|
| Median (32 companies) | -0.1x | 0.7x | 0.7x | 1.1x | 0.9x |
|---|
| CP Lotus Corp ($121) | | 6.5x | 5.1x | 3.0x | 9.8x |
