China Shengmu Organic Milk Ltd Net Income dropped on 15.0% while Revenue jumped on 11.8%
21/03/2017 • About China Shengmu Organic Milk Ltd (
$1432) • By InTwits
China Shengmu Organic Milk Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Shengmu Organic Milk Ltd is a fast growth stock: FY2016 revenue growth was 11.8%, 5 year revenue CAGR was 54.8% at FY2016 ROIC 12.7%
- The company has highly profitable business model: ROIC is at 12.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x 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.
China Shengmu Organic Milk Ltd ($1432) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 701 | 1,144 | 2,132 | 3,101 | 3,467 | 11.8% |
| Gross Profit | 234 | 490 | 1,070 | 1,478 | 1,675 | 13.4% |
| SG&A | 35 | 97 | 230 | 373 | 430 | 15.2% |
| EBITDA | 221 | 438 | 1,003 | 1,299 | 1,236 | -4.9% |
| Net Income | 196 | 327 | 711 | 801 | 681 | -15.0% |
Balance Sheet
|
|---|
| Cash | 30 | 127 | 735 | 1,732 | 1,047 | -39.5% |
| Short Term Debt | 324 | 932 | 1,334 | 1,600 | 918 | -42.6% |
| Long Term Debt | 0 | 0 | 150 | 1,117 | 1,752 | 56.8% |
Cash flow
|
|---|
| Capex | 247 | 442 | 763 | 507 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 80.0% | 63.2% | 86.4% | 45.4% | 11.8% | |
| EBITDA growth | -3.5% | 98.6% | 129.1% | 29.5% | -4.9% | |
| Gross Margin | 33.4% | 42.9% | 50.2% | 47.7% | 48.3% | 0.7% |
| EBITDA Margin | 31.5% | 38.3% | 47.1% | 41.9% | 35.7% | -6.3% |
| Net Income Margin | 27.9% | 28.6% | 33.4% | 25.8% | 19.6% | -6.2% |
| SG&A, % of revenue | 5.1% | 8.5% | 10.8% | 12.0% | 12.4% | 0.4% |
| CAPEX, % of revenue | 35.3% | 38.7% | 35.8% | 16.3% | | -16.3% |
| ROIC | 16.4% | 19.6% | 22.5% | 17.3% | 12.7% | -4.6% |
| ROE | 19.4% | 24.6% | 27.3% | 19.4% | 13.8% | -5.6% |
| Net Debt/EBITDA | 1.3x | 1.8x | 0.7x | 0.8x | 1.3x | 0.6x |
Revenue and profitability
China Shengmu Organic Milk Ltd's Revenue surged on 11.8%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.5 pp from 9.0% to 7.6% in FY2016.
Gross Margin increased slightly on 0.68 pp from 47.7% to 48.3% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 6.2 pp from 25.8% to 19.6% in FY2016.
Return on investment
The company operates at good ROIC (12.67%) and ROE (13.76%). ROIC decreased on 4.6 pp from 17.3% to 12.7% in FY2016. ROE decreased on 5.6 pp from 19.4% to 13.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 2.2x. Net Debt / EBITDA jumped on 0.6x from 0.8x to 1.3x in FY2016. Debt decreased slightly on 1.7% while cash dropped on 39.5%.
Appendix 1: Peers in Food
Below we provide China Shengmu Organic Milk Ltd benchmarking against other companies in Food 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 |
|---|
| Imperial Pacific International Holdings Ltd ($1076) | -27.6% | -18.5% | 2.7% | 70.3% | |
| 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% | |
| Honworld Group Ltd ($2226) | 207.9% | 57.3% | 26.0% | 19.5% | |
| |
|---|
| Median (42 companies) | 10.2% | 8.4% | 5.1% | -3.7% | -6.2% |
|---|
| China Shengmu Organic Milk Ltd ($1432) | | 63.2% | 86.4% | 45.4% | 11.8% |
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% | |
| Christine International Holdings Ltd ($1210) | 50.2% | 49.7% | 47.2% | 47.2% | |
| |
|---|
| Median (41 companies) | 16.5% | 20.0% | 20.1% | 22.8% | 18.5% |
|---|
| China Shengmu Organic Milk Ltd ($1432) | 33.4% | 42.9% | 50.2% | 47.7% | 48.3% |
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 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% | |
| Want Want China Holdings Ltd ($151) | 23.8% | 25.8% | 23.8% | 25.2% | 28.9% |
| |
|---|
| Median (41 companies) | 8.0% | 6.8% | 7.7% | 8.0% | 4.7% |
|---|
| China Shengmu Organic Milk Ltd ($1432) | 31.5% | 38.3% | 47.1% | 41.9% | 35.7% |
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) | 5.1% | 5.3% | 5.1% | 4.3% | 0.7% |
|---|
| China Shengmu Organic Milk Ltd ($1432) | 35.3% | 38.7% | 35.8% | 16.3% | |
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% | 22.2% |
| Honworld Group Ltd ($2226) | 50.4% | 44.5% | 23.6% | 16.5% | |
| WH Group Ltd ($288) | 20.3% | 3.6% | 15.0% | 13.3% | |
| |
|---|
| Median (43 companies) | 7.8% | 7.0% | 7.2% | 5.6% | 2.4% |
|---|
| China Shengmu Organic Milk Ltd ($1432) | 16.4% | 19.6% | 22.5% | 17.3% | 12.7% |
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) | -0.3x | 0.7x | 0.7x | 1.2x | 0.3x |
|---|
| China Shengmu Organic Milk Ltd ($1432) | 1.3x | 1.8x | 0.7x | 0.8x | 1.3x |
