CSPC Pharmaceutical Group Ltd reports 26.2% Net Income growth and 1.9 pp EBITDA Margin growth from 24.3% to 26.1%
20/03/2017 • About CSPC Pharmaceutical Group Ltd (
$1093) • By InTwits
CSPC Pharmaceutical Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CSPC Pharmaceutical Group Ltd is a fast growth stock: FY2016 revenue growth was 8.6%, 5 year revenue CAGR was 38.7% at FY2016 ROIC 24.1%
- EBITDA Margin is expanding: 26.1% in FY2016 vs. 24.3% in FY2015 vs. 22.8% in FY2012
- The company has highly profitable business model: ROIC is at 24.1%
- It operates with high leverage: Net Debt/EBITDA is -0.6x while industry average is -1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CSPC Pharmaceutical Group Ltd ($1093) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,146 | 9,949 | 10,955 | 11,394 | 12,369 | 8.6% |
| Gross Profit | 1,805 | 3,133 | 4,187 | 5,221 | 6,309 | 20.8% |
| SG&A | 993 | 1,921 | 2,340 | 2,802 | 3,342 | 19.3% |
| EBITDA | 946 | 1,813 | 2,281 | 2,765 | 3,234 | 17.0% |
| Net Income | 2,162 | 973 | 1,268 | 1,665 | 2,101 | 26.2% |
Balance Sheet
|
|---|
| Cash | 1,450 | 1,188 | 1,468 | 2,299 | 3,235 | 40.7% |
| Short Term Debt | 1,817 | 660 | 624 | 452 | 898 | 98.6% |
| Long Term Debt | 499 | 680 | 602 | 1,011 | 240 | -76.2% |
Cash flow
|
|---|
| Capex | 204 | 630 | 807 | 823 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 72.2% | 139.9% | 10.1% | 4.0% | 8.6% | |
| EBITDA growth | 87.2% | 91.7% | 25.8% | 21.2% | 17.0% | |
| Gross Margin | 43.5% | 31.5% | 38.2% | 45.8% | 51.0% | 5.2% |
| EBITDA Margin | 22.8% | 18.2% | 20.8% | 24.3% | 26.1% | 1.9% |
| Net Income Margin | 52.1% | 9.8% | 11.6% | 14.6% | 17.0% | 2.4% |
| SG&A, % of revenue | 23.9% | 19.3% | 21.4% | 24.6% | 27.0% | 2.4% |
| CAPEX, % of revenue | 4.9% | 6.3% | 7.4% | 7.2% | | -7.2% |
| ROIC | 14.5% | 12.8% | 18.1% | 21.7% | 24.1% | 2.4% |
| ROE | 57.4% | 13.9% | 16.3% | 19.8% | 22.3% | 2.5% |
| Net Debt/EBITDA | 0.9x | 0.1x | -0.1x | -0.3x | -0.6x | -0.3x |
Revenue and profitability
CSPC Pharmaceutical Group Ltd's Revenue increased on 8.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 23.8% to 26.0% in FY2016.
Gross Margin increased on 5.2 pp from 45.8% to 51.0% in FY2016. SG&A as a % of Revenue increased on 2.4 pp from 24.6% to 27.0% in FY2016.
Net Income marign increased on 2.4 pp from 14.6% to 17.0% in FY2016.
Return on investment
The company operates at high and attractive ROIC (24.09%) and ROE (22.30%). ROIC increased on 2.4 pp from 21.7% to 24.1% in FY2016. ROE increased on 2.5 pp from 19.8% to 22.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.4x. Net Debt / EBITDA dropped on 0.3x from -0.3x to -0.6x in FY2016. Debt dropped on 22.2% while cash surged on 40.7%.
Appendix 1: Peers in Pharmaceuticals
Below you can find CSPC Pharmaceutical Group Ltd benchmarking vs. other companies in Pharmaceuticals 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 |
|---|
| China Health Group Inc ($8225) | 58.5% | -48.0% | -60.1% | 244.1% | |
| Wai Yuen Tong Medicine Holdings Ltd ($897) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Oriental Unicorn Agricultural Group Ltd ($8120) | 30.2% | -78.1% | 16.8% | 100.8% | |
| China Traditional Chinese Medicine Co Ltd ($570) | 22.3% | 35.2% | 90.0% | 40.0% | |
| RM Group Holdings Ltd ($8185) | | 4.6% | -16.0% | 34.2% | -16.6% |
| |
|---|
| Median (41 companies) | 16.2% | 11.8% | 15.3% | 2.7% | 10.8% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | | 139.9% | 10.1% | 4.0% | 8.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Luye Pharma Group Ltd ($2186) | 83.5% | 83.6% | 81.0% | 81.4% | |
| Consun Pharmaceutical Group Ltd ($1681) | 75.7% | 79.1% | 78.3% | 80.7% | |
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 82.0% | 81.5% | 80.9% | 79.9% | |
| RM Group Holdings Ltd ($8185) | 79.6% | 78.8% | 76.6% | 77.7% | 77.4% |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 77.5% | 76.4% | 77.7% | 79.2% |
| |
|---|
| Median (40 companies) | 39.4% | 41.1% | 52.2% | 50.0% | 48.7% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 43.5% | 31.5% | 38.2% | 45.8% | 51.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 193.8% | 205,840.0% | -15,344.8% | 49,650.0% | 26.0% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 38.8% | 65.4% | 70.9% | 93.3% | |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 60.6% | 21.0% | 28.8% | 61.1% | |
| U-Home Group Holdings Ltd ($2327) | 9.8% | -16.6% | -46.7% | 51.7% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 41.3% | 45.4% | 47.5% | 49.1% | 50.9% |
| |
|---|
| Median (41 companies) | 19.6% | 20.6% | 21.4% | 19.0% | 10.1% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 22.8% | 18.2% | 20.8% | 24.3% | 26.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hao Wen Holdings Ltd ($8019) | 30.0% | 2.3% | 38.2% | 44.8% | |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 0.9% | 1.4% | 7.6% | 40.5% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 18.6% | 20.9% | 7.1% | 26.1% | |
| Tianda Pharmaceuticals Ltd ($455) | 6.0% | 3.9% | 10.5% | 24.4% | 22.9% |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 16.8% | 52.4% | 39.6% | 18.7% | |
| |
|---|
| Median (40 companies) | 8.3% | 9.7% | 7.6% | 4.5% | 2.8% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 4.9% | 6.3% | 7.4% | 7.2% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 26.2% | 26.8% | 26.5% | 26.2% | 24.3% |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 25.3% | 27.5% | 23.8% | 25.9% | 25.1% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 13.7% | 18.3% | 22.0% | 25.4% | |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 12.6% | 14.0% | 17.8% | 23.5% | |
| Lee's Pharmaceutical Holdings Ltd ($950) | 26.1% | 22.0% | 22.4% | 22.7% | |
| |
|---|
| Median (42 companies) | 12.2% | 9.3% | 10.0% | 9.1% | 2.9% |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 14.5% | 12.8% | 18.1% | 21.7% | 24.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 2.3x | 3.7x | | 22.2x | -5.1x |
| U-Home Group Holdings Ltd ($2327) | 10.1x | | | 9.9x | |
| Lansen Pharmaceutical Holdings Ltd ($503) | 1.7x | 2.8x | 3.4x | 4.7x | |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 5.4x | 4.0x | 3.4x | 4.3x | |
| United Laboratories International Holdings Ltd/The ($3933) | 6.5x | 4.6x | 4.2x | 4.0x | |
| |
|---|
| Median (34 companies) | -0.4x | -0.5x | -0.7x | -0.6x | -2.9x |
|---|
| CSPC Pharmaceutical Group Ltd ($1093) | 0.9x | 0.1x | -0.1x | -0.3x | -0.6x |
