WH Group Ltd reports 15.6% EBITDA growth and 1.3 pp EBITDA Margin growth from 9.0% to 10.3%
22/03/2017 • About WH Group Ltd (
$288) • By InTwits
WH Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has highly profitable business model: ROIC is at 16.6%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
WH Group Ltd ($288) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,243 | 11,253 | 22,243 | 21,209 | 21,534 | 1.5% |
| Gross Profit | 971 | 1,773 | 3,415 | 4,080 | 4,207 | 3.1% |
| SG&A | 276 | 695 | 2,420 | 2,523 | 2,542 | 0.8% |
| EBITDA | 728 | 438 | 2,085 | 1,917 | 2,216 | 15.6% |
| Net Income | 325 | -263 | 766 | 786 | 1,036 | 31.8% |
Balance Sheet
|
|---|
| Cash | 674 | 875 | 978 | 1,137 | 1,139 | 0.2% |
| Short Term Debt | 164 | 760 | 719 | 606 | 1,011 | 66.8% |
| Long Term Debt | 30 | 6,697 | 3,975 | 3,331 | 1,890 | -43.3% |
Cash flow
|
|---|
| Capex | 167 | 309 | 733 | 737 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 14.4% | 80.2% | 97.7% | -4.6% | 1.5% | |
| EBITDA growth | 84.3% | -39.8% | 376.0% | -8.1% | 15.6% | |
| Gross Margin | 15.6% | 15.8% | 15.4% | 19.2% | 19.5% | 0.3% |
| EBITDA Margin | 11.7% | 3.9% | 9.4% | 9.0% | 10.3% | 1.3% |
| Net Income Margin | 5.2% | -2.3% | 3.4% | 3.7% | 4.8% | 1.1% |
| SG&A, % of revenue | 4.4% | 6.2% | 10.9% | 11.9% | 11.8% | -0.1% |
| CAPEX, % of revenue | 2.7% | 2.7% | 3.3% | 3.5% | | -3.5% |
| ROIC | 20.3% | 3.6% | 15.0% | 13.3% | 16.6% | 3.3% |
| ROE | 19.5% | -12.9% | 20.7% | 14.4% | 17.2% | 2.7% |
| Net Debt/EBITDA | -0.7x | 15.0x | 1.8x | 1.5x | 0.8x | -0.7x |
Revenue and profitability
The company's Revenue increased slightly on 1.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.7 pp from 25.2% to 28.9% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased slightly on 1.1 pp from 3.7% to 4.8% in FY2016.
Return on investment
The company operates at good ROIC (16.57%) and ROE (17.15%). ROIC increased on 3.3 pp from 13.3% to 16.6% in FY2016. ROE increased on 2.7 pp from 14.4% to 17.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 1.3x. Net Debt / EBITDA dropped on 0.7x from 1.5x to 0.8x in FY2016. Debt dropped on 26.3% while cash showed almost no change in FY2016.
Management team
Wan Long is a the company's CEO. Wan Long has spent 5 years at the company. The company's CFO Guo Lijun has spent 2 years at the company.
Appendix 1: Peers in Food
Below you can find WH Group Ltd 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) | | 63.2% | 86.4% | 45.4% | 11.8% |
| 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) | 10.2% | 8.4% | 5.1% | -2.9% | -0.3% |
|---|
| WH Group Ltd ($288) | | 80.2% | 97.7% | -4.6% | 1.5% |
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% | 48.3% |
| |
|---|
| Median (41 companies) | 16.8% | 20.3% | 22.2% | 23.7% | 20.2% |
|---|
| WH Group Ltd ($288) | 15.6% | 15.8% | 15.4% | 19.2% | 19.5% |
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% | 35.7% |
| 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% | 36.5% |
| |
|---|
| Median (41 companies) | 8.0% | 7.1% | 7.7% | 8.0% | 4.9% |
|---|
| WH Group Ltd ($288) | 11.7% | 3.9% | 9.4% | 9.0% | 10.3% |
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% |
|---|
| WH Group Ltd ($288) | 2.7% | 2.7% | 3.3% | 3.5% | |
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% |
| China Shengmu Organic Milk Ltd ($1432) | 16.4% | 19.6% | 22.5% | 17.3% | 12.7% |
| Honworld Group Ltd ($2226) | 50.4% | 44.5% | 23.6% | 16.5% | |
| |
|---|
| Median (43 companies) | 7.8% | 7.3% | 7.2% | 5.6% | 4.3% |
|---|
| WH Group Ltd ($288) | 20.3% | 3.6% | 15.0% | 13.3% | 16.6% |
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 | 0.3x |
|---|
| WH Group Ltd ($288) | -0.7x | 15.0x | 1.8x | 1.5x | 0.8x |
