Livzon Pharmaceutical Group Inc reports 26.0% Net Income growth and 0.84 pp EBITDA Margin growth from 15.7% to 16.5%
24/03/2017 • About Livzon Pharmaceutical Group Inc (
$1513) • By InTwits
Livzon Pharmaceutical Group Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Livzon Pharmaceutical Group Inc is a fast growth stock: 2016 revenue growth was 15.2%, 5 year revenue CAGR was 19.3% at 2016 ROIC 12.7%
- EBITDA Margin is relatively stable: 16.5% in 2016 vs. 15.7% in 2015 vs. 16.7% in 2012
- Livzon Pharmaceutical Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.8%. At the same time it's in pair with industry average of 10.7%.
- CAPEX is quite volatile: 368 in 2016, 477 in 2015, 666 in 2014, 920 in 2013, 762 in 2012
- The company has highly profitable business model: ROIC is at 12.7%
- It operates with high leverage: Net Debt/EBITDA is -1.1x 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.
Livzon Pharmaceutical Group Inc ($1513) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,889 | 4,560 | 5,475 | 6,540 | 7,531 | 15.2% |
| Gross Profit | 2,319 | 2,866 | 3,332 | 3,964 | 4,784 | 20.7% |
| SG&A | 1,793 | 2,067 | 2,440 | 2,883 | 3,442 | 19.4% |
| EBITDA | 649 | 740 | 844 | 1,024 | 1,243 | 21.3% |
| Net Income | 442 | 488 | 516 | 623 | 784 | 26.0% |
Balance Sheet
|
|---|
| Cash | 1,179 | 751 | 709 | 767 | 2,062 | 168.8% |
| Short Term Debt | 1,220 | 867 | 1,029 | 949 | 674 | -29.0% |
| Long Term Debt | 1 | 550 | 467 | 1 | 1 | 0.0% |
Cash flow
|
|---|
| Capex | 762 | 920 | 666 | 477 | 368 | -22.8% |
Ratios
|
|---|
| Revenue growth | 24.6% | 17.3% | 20.1% | 19.4% | 15.2% | |
| EBITDA growth | 17.8% | 13.9% | 14.1% | 21.3% | 21.3% | |
| Gross Margin | 59.6% | 62.8% | 60.9% | 60.6% | 63.5% | 2.9% |
| EBITDA Margin | 16.7% | 16.2% | 15.4% | 15.7% | 16.5% | 0.8% |
| Net Income Margin | 11.4% | 10.7% | 9.4% | 9.5% | 10.4% | 0.9% |
| SG&A, % of revenue | 46.1% | 45.3% | 44.6% | 44.1% | 45.7% | 1.6% |
| CAPEX, % of revenue | 19.6% | 20.2% | 12.2% | 7.3% | 4.9% | -2.4% |
| ROIC | 12.0% | 11.9% | 11.1% | 12.4% | 12.7% | 0.3% |
| ROE | 15.1% | 15.3% | 14.7% | 15.5% | 14.5% | -1.0% |
| Net Debt/EBITDA | 0.1x | 0.9x | 0.9x | 0.2x | -1.1x | -1.3x |
Revenue and profitability
Livzon Pharmaceutical Group Inc's Revenue jumped on 15.2%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.84 pp from 15.7% to 16.5% in 2016.
Gross Margin increased on 2.9 pp from 60.6% to 63.5% in 2016. SG&A as a % of Revenue increased slightly on 1.6 pp from 44.1% to 45.7% in 2016.
Net Income marign increased slightly on 0.89 pp from 9.5% to 10.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.9% in 2016. The company's CAPEX/Revenue dropped on 15.3 pp from 20.2% in 2013 to 4.9% in 2016. Average CAPEX/Revenue for the last three years was 8.1%.
Return on investment
The company operates at good ROIC (12.67%) and ROE (14.46%). ROIC showed almost no change in 2016. ROE decreased slightly on 1.0 pp from 15.5% to 14.5% in 2016.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 0.2x to -1.1x in 2016. Debt dropped on 29.0% while cash surged on 169%.
Appendix 1: Peers in Pharmaceuticals
Below you can find Livzon Pharmaceutical Group Inc 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) | | -48.0% | -60.1% | 244.1% | -1.2% |
| Wai Yuen Tong Medicine Holdings Ltd ($897) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Oriental Unicorn Agricultural Group Ltd ($8120) | | -78.1% | 16.8% | 100.8% | 6.9% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 35.2% | 90.0% | 40.0% | 76.1% |
| RM Group Holdings Ltd ($8185) | | 4.6% | -16.0% | 34.2% | -16.6% |
| |
|---|
| Median (41 companies) | 13.3% | 11.8% | 14.7% | 2.7% | 8.6% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | | 17.3% | 20.1% | 19.4% | 15.2% |
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% | 38.3% | 50.0% | 50.0% | 51.0% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 59.6% | 62.8% | 60.9% | 60.6% | 63.5% |
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) | 20.7% | 20.6% | 21.4% | 21.0% | 11.2% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 16.7% | 16.2% | 15.4% | 15.7% | 16.5% |
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) | 8.2% | 8.1% | 7.4% | 4.5% | 2.8% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 19.6% | 20.2% | 12.2% | 7.3% | 4.9% |
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) | 12.3% | 9.3% | 10.0% | 9.1% | 5.0% |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 12.0% | 11.9% | 11.1% | 12.4% | 12.7% |
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 | -1.4x |
|---|
| Livzon Pharmaceutical Group Inc ($1513) | 0.1x | 0.9x | 0.9x | 0.2x | -1.1x |
