Nan Hai Corp Ltd Net Income surged on 469% in 2016 and Revenue jumped on 112%
15/03/2017 • About Nan Hai Corp Ltd (
$680) • By InTwits
Nan Hai Corp Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Nan Hai Corp Ltd is a fast growth stock: FY2016 revenue growth was 112%, 5 year revenue CAGR was 30.7% at FY2016 ROIC 14.0%
- EBITDA Margin is quite volatile: 35.4% in FY2016, 17.5% in FY2015, 8.3% in FY2014, 62.0% in FY2013, 4.2% in FY2012
- The company has highly profitable business model: ROIC is at 14.0%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is -3.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Nan Hai Corp Ltd ($680) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,954 | 2,319 | 3,153 | 4,200 | 8,916 | 112.3% |
| Gross Profit | 1,215 | 1,514 | 2,075 | 2,607 | 5,364 | 105.8% |
| SG&A | 1,126 | 1,420 | 1,715 | 2,111 | 2,825 | 33.8% |
| EBITDA | 81 | 1,438 | 263 | 737 | 3,152 | 327.8% |
| Net Income | -346 | 865 | -702 | 239 | 1,360 | 469.1% |
Balance Sheet
|
|---|
| Cash | 187 | 513 | 280 | 804 | 1,173 | 45.9% |
| Short Term Debt | 4,364 | 4,456 | 3,342 | 5,073 | 5,828 | 14.9% |
| Long Term Debt | 2,384 | 1,102 | 2,410 | 4,998 | 9,639 | 92.9% |
Cash flow
|
|---|
| Capex | 375 | 816 | 573 | 847 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -16.3% | 18.7% | 36.0% | 33.2% | 112.3% | |
| EBITDA growth | -57.1% | 1,671.7% | -81.7% | 180.6% | 327.8% | |
| Gross Margin | 62.2% | 65.3% | 65.8% | 62.1% | 60.2% | -1.9% |
| EBITDA Margin | 4.2% | 62.0% | 8.3% | 17.5% | 35.4% | 17.8% |
| Net Income Margin | -17.7% | 37.3% | -22.3% | 5.7% | 15.2% | 9.6% |
| SG&A, % of revenue | 57.6% | 61.2% | 54.4% | 50.3% | 31.7% | -18.6% |
| CAPEX, % of revenue | 19.2% | 35.2% | 18.2% | 20.2% | | -20.2% |
| ROIC | -1.1% | 10.2% | -2.8% | 3.7% | 14.0% | 10.3% |
| ROE | -10.5% | 24.3% | -19.7% | 7.5% | 37.3% | 29.8% |
| Net Debt/EBITDA | 80.8x | 3.5x | 20.8x | 12.6x | 4.5x | -8.0x |
Revenue and profitability
Nan Hai Corp Ltd's Revenue jumped on 112%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 17.8 pp from 17.5% to 35.4% in FY2016.
Gross Margin decreased slightly on 1.9 pp from 62.1% to 60.2% in FY2016. SG&A as a % of Revenue dropped on 18.6 pp from 50.3% to 31.7% in FY2016.
Net Income marign increased on 9.6 pp from 5.7% to 15.2% in FY2016.
Return on investment
The company operates at high and attractive ROE (37.28%) while ROIC is a bit lower (14.00%). ROIC surged on 10.3 pp from 3.7% to 14.0% in FY2016. ROE jumped on 29.8 pp from 7.5% to 37.3% in FY2016.
Leverage (Debt)
Debt level is 4.5x Net Debt / EBITDA and 4.9x Debt / EBITDA. Net Debt / EBITDA dropped on 8.0x from 12.6x to 4.5x in FY2016. Debt surged on 53.6% while cash surged on 45.9%.
Appendix 1: Peers in Entertainment
Below we provide Nan Hai Corp 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) | | 4.3% | 159.4% | 46.3% | -97.5% |
| |
|---|
| Median (27 companies) | 12.5% | 10.4% | 1.1% | -4.8% | 0.9% |
|---|
| Nan Hai Corp Ltd ($680) | | 18.7% | 36.0% | 33.2% | 112.3% |
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% | -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 (23 companies) | 40.9% | 48.4% | 44.0% | 41.2% | 28.0% |
|---|
| Nan Hai Corp Ltd ($680) | 62.2% | 65.3% | 65.8% | 62.1% | 60.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Neptune Group Ltd ($70) | 98.6% | 98.6% | 86.6% | 99.0% | 76.3% |
| 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% | |
| |
|---|
| Median (27 companies) | 24.0% | 19.2% | 19.5% | -1.7% | -17.8% |
|---|
| Nan Hai Corp Ltd ($680) | 4.2% | 62.0% | 8.3% | 17.5% | 35.4% |
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% | 4.6% | 8.1% | 4.3% |
|---|
| Nan Hai Corp Ltd ($680) | 19.2% | 35.2% | 18.2% | 20.2% | |
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% |
| Neptune Group Ltd ($70) | 22.8% | 23.8% | 21.1% | 18.1% | 0.3% |
| 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% | 2.3% | 0.7% | -2.6% | -8.4% |
|---|
| Nan Hai Corp Ltd ($680) | -1.1% | 10.2% | -2.8% | 3.7% | 14.0% |
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 | |
| 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 | |
| Neptune Group Ltd ($70) | -0.3x | -0.1x | -0.0x | -0.1x | -0.6x |
| |
|---|
| Median (13 companies) | -0.1x | -0.6x | -0.4x | -0.6x | -0.4x |
|---|
| Nan Hai Corp Ltd ($680) | 80.8x | 3.5x | 20.8x | 12.6x | 4.5x |
