Looking for growth stocks? Pay attention to Essex Bio-technology Ltd
28/03/2017 • About Essex Bio-technology Ltd (
$1061) • By InTwits
Essex Bio-technology Ltd is an attractive growth stock in Biotechnology industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Essex Bio-technology Ltd showed fast growth in the last financial year. The company's revenue surged on 18.6% in FY2016. In addition to revenue Essex Bio-technology Ltd also keeps delivering EBITDA growth. It was 23.0% in FY2016
If we look for the longer period Essex Bio-technology Ltd showed fast revenue growth of 30.7% from FY2013 to FY2016 annualy. EBITDA surged on 33.8% from FY2013 to FY2016 annualy.
Essex Bio-technology Ltd ($1061) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 267 | 347 | 518 | 654 | 776 |
|---|
| Revenue growth, % | | 29.9% | 49.3% | 26.2% | 18.6% |
|---|
| Gross margin, % | 91.2% | 89.6% | 79.3% | 81.0% | 80.3% |
|---|
| SG&A, % | 72.9% | 68.5% | 60.5% | 61.7% | 59.1% |
|---|
| EBITDA | 51 | 76 | 110 | 148 | 182 |
|---|
| EBITDA growth, % | | 49.6% | 45.0% | 34.2% | 23.0% |
|---|
| EBITDA margin, % | 19.0% | 21.9% | 21.3% | 22.6% | 23.4% |
|---|
| Net Income | 39 | 55 | 75 | 105 | 136 |
|---|
| Net Income margin, % | 14.6% | 15.8% | 14.5% | 16.0% | 17.6% |
|---|
| |
| CAPEX | 98 | 36 | 8 | 11 | 0 |
|---|
| CAPEX/Revenue, % | 36.6% | 10.4% | 1.45% | 1.74% | 0% |
|---|
| Debt | 74 | 51 | 51 | 51 | 39 |
|---|
| Cash | 60 | 55 | 62 | 65 | 156 |
|---|
| Net Debt/EBITDA | 0.3x | -0.0x | -0.1x | -0.1x | -0.6x |
|---|
| |
| ROIC, % | 22.6% | 25.2% | 28.5% | 31.4% | 30.7% |
|---|
| ROE, % | 21.7% | 24.4% | 25.7% | 28.2% | 28.1% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. The company's EBITDA margin increased slightly on 0.800 pp from 22.6% to 23.4% in FY2016. In the longer period Essex Bio-technology Ltd showed EBITDA margin growth of 1.50 pp from 21.9% in FY2013 to 23.4% in FY2016.
We call Essex Bio-technology Ltd an attractive growth stock as together with the growth it delivers high ROIC at 30.7%. During the last three years it surged - it was 25.2% in FY2013. It's average ROIC for the last three years was 30.2%.
The company showed Net Income margin growth of 1.60 pp from 16% to 17.6% in FY2016. In the longer period the company showed fast Net Income margin growth of 1.80 pp from 15.8% in FY2013 to 17.6% in FY2016.
Essex Bio-technology Ltd operates at ROE of 28.1%. Average ROE for the last three years was 27.3%.
Capital expenditures (CAPEX)
In FY2016 Essex Bio-technology Ltd had CAPEX/Revenue of 0%. Essex Bio-technology Ltd's CAPEX/Revenue dropped on 10.4 pp from 10.4% in FY2013 to 0% in FY2016.
Leverage (Debt)
Essex Bio-technology Ltd has negative net debt at -0.6x Net Debt/EBITDA - at the same time with high growth. In the longer period Essex Bio-technology Ltd's leverage surged on 0.60x from -0.05x in FY2013 to -0.65x in FY2016.
Peers in Biotechnology
Below we provide Essex Bio-technology Ltd benchmarking against other companies in Biotechnology 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Regenerative Medicine International Ltd ($8158) | | 975.8% | -63.0% | 452.4% | 885.1% |
| Bloomage BioTechnology Corp Ltd ($963) | 33.4% | 36.4% | 28.3% | 35.2% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | | 78.9% | 13.2% | 23.1% | 7.3% |
| Uni-Bio Science Group Ltd ($690) | -25.7% | 46.1% | 23.1% | 20.2% | |
| Amgen Inc ($4332) | | 8.2% | 7.4% | 8.0% | 6.1% |
| |
|---|
| Median (8 companies) | -16.7% | 22.9% | 3.5% | 14.1% | 6.1% |
|---|
| Essex Bio-technology Ltd ($1061) | | 29.9% | 49.3% | 26.2% | 18.6% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 89.9% | 92.2% | 92.2% | 91.4% | 92.5% |
| Uni-Bio Science Group Ltd ($690) | 67.2% | 79.5% | 80.0% | 83.3% | |
| Amgen Inc ($4332) | 81.5% | 82.1% | 78.0% | 80.5% | 81.9% |
| Bloomage BioTechnology Corp Ltd ($963) | 69.3% | 79.9% | 78.0% | 74.9% | |
| China Regenerative Medicine International Ltd ($8158) | 33.6% | -17.3% | 31.0% | 49.2% | 66.1% |
| |
|---|
| Median (8 companies) | 50.7% | 57.3% | 56.5% | 62.0% | 66.1% |
|---|
| Essex Bio-technology Ltd ($1061) | 91.2% | 89.6% | 79.3% | 81.0% | 80.3% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Amgen Inc ($4332) | 38.6% | 38.3% | 41.3% | 48.8% | 51.8% |
| Bloomage BioTechnology Corp Ltd ($963) | 46.8% | 39.2% | 45.2% | 44.1% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 33.4% | 29.0% | 31.5% | 29.3% | 29.8% |
| CK Life Sciences International Holdings Inc ($775) | 9.9% | 10.0% | 10.7% | 11.3% | 11.2% |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 6.9% | 7.4% | 9.1% | 9.2% | 6.6% |
| |
|---|
| Median (8 companies) | 8.4% | 8.7% | 9.9% | 10.3% | 11.2% |
|---|
| Essex Bio-technology Ltd ($1061) | 19.0% | 21.9% | 21.3% | 22.6% | 23.4% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Regenerative Medicine International Ltd ($8158) | 40,271.9% | 810.7% | 3,305.9% | 1,295.1% | 58.9% |
| Bloomage BioTechnology Corp Ltd ($963) | 35.8% | 30.4% | 24.6% | 41.0% | |
| Uni-Bio Science Group Ltd ($690) | 23.9% | 28.9% | 35.5% | 15.3% | |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 49.3% | 13.6% | 9.4% | 6.6% | |
| CK Life Sciences International Holdings Inc ($775) | 3.8% | 5.8% | 9.9% | 6.0% | |
| |
|---|
| Median (8 companies) | 20.8% | 9.7% | 9.6% | 6.3% | 31.1% |
|---|
| Essex Bio-technology Ltd ($1061) | 36.6% | 10.4% | 1.5% | 1.7% | |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | 20.0% | 20.9% | 18.6% | 17.6% | 16.4% |
| Bloomage BioTechnology Corp Ltd ($963) | 30.1% | 24.1% | 27.2% | 17.1% | |
| Amgen Inc ($4332) | 13.0% | 11.7% | 11.2% | 14.6% | 15.8% |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 12.4% | 10.1% | 9.8% | 9.5% | 4.3% |
| CK Life Sciences International Holdings Inc ($775) | 4.2% | 4.1% | 4.3% | 4.8% | 4.7% |
| |
|---|
| Median (8 companies) | 8.3% | 7.1% | 7.0% | 7.2% | 4.7% |
|---|
| Essex Bio-technology Ltd ($1061) | 22.6% | 25.2% | 28.5% | 31.4% | 30.7% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| CK Life Sciences International Holdings Inc ($775) | 4.3x | 6.1x | 6.4x | 6.0x | 5.8x |
| Amgen Inc ($4332) | 3.5x | 4.0x | 3.3x | 2.6x | 2.6x |
| Tianjin TEDA Biomedical Engineering Co Ltd ($8189) | 2.0x | 1.4x | 0.9x | -1.3x | -1.8x |
| Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co Ltd ($1349) | -0.4x | -2.4x | -2.2x | -1.9x | -2.1x |
| |
|---|
| Median (4 companies) | 2.7x | 1.4x | 0.9x | 1.6x | 0.4x |
|---|
| Essex Bio-technology Ltd ($1061) | 0.3x | -0.0x | -0.1x | -0.1x | -0.6x |
