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Dynam Japan Holdings Co Ltd reports 21.3% CAPEX decline in 2017 and 0.61% Revenue growth

25/05/2017 • About Dynam Japan Holdings Co Ltd ($6889) • By InTwits

Dynam Japan Holdings Co Ltd reported FY2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Dynam Japan Holdings Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's a lot of higher than industry average of 0.5%.
  • CAPEX is quite volatile: 3,616 in 2017, 1,089 in 2016, 860 in 2015, 4,151 in 2014, 2,124 in 2013
  • The company has business model with average profitability: ROIC is at 10.3%
  • It operates with high leverage: Net Debt/EBITDA is -0.6x while industry average is -3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Dynam Japan Holdings Co Ltd ($6889) key annual financial indicators

mln. JPY201320142015201620172017/2016
P&L
Revenue163,961165,754154,556155,911156,8690.6%
SG&A3,1124,0755,4565,7985,622-3.0%
EBITDA42,15240,83225,83730,18328,236-6.5%
Net Income20,92521,32811,30310,5449,360-11.2%
Balance Sheet
Cash41,46634,83029,23928,13448,49972.4%
Short Term Debt2,4812,1343,4142,4557,583208.9%
Long Term Debt5,4453,3919,22618,52023,34326.0%
Cash flow
Capex10,7239,29216,00812,6139,925-21.3%
Ratios
Revenue growth-0.7%1.1%-6.8%0.9%0.6%
EBITDA growth4.4%-3.1%-36.7%16.8%-6.5%
EBITDA Margin25.7%24.6%16.7%19.4%18.0%-1.4%
Net Income Margin12.8%12.9%7.3%6.8%6.0%-0.8%
SG&A, % of revenue1.9%2.5%3.5%3.7%3.6%-0.1%
CAPEX, % of revenue6.5%5.6%10.4%8.1%6.3%-1.8%
ROIC25.4%21.8%10.5%12.6%10.3%-2.2%
ROE19.1%15.9%8.1%7.9%6.9%-0.9%
Net Debt/EBITDA-0.8x-0.7x-0.6x-0.2x-0.6x-0.4x

Revenue and profitability


Dynam Japan Holdings Co Ltd's Revenue increased slightly on 0.61%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.

SG&A as a % of Revenue showed almost no change in FY2017.

Net Income marign decreased slightly on 0.80 pp from 6.8% to 6.0% in FY2017.

Capital expenditures (CAPEX) and working capital investments


Dynam Japan Holdings Co Ltd's CAPEX/Revenue was 6.3% in FY2017. CAPEX/Revenue increased slightly on 0.72 pp from 5.6% in FY2014 to 6.3% in FY2017. For the last three years the average CAPEX/Revenue was 8.3%.

Return on investment


The company operates at low ROIC (10.35%) and ROE (6.94%). ROIC decreased on 2.2 pp from 12.6% to 10.3% in FY2017. ROE decreased slightly on 0.93 pp from 7.9% to 6.9% in FY2017.

Leverage (Debt)


Debt level is -0.6x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from -0.2x to -0.6x in FY2017. Debt surged on 47.4% while cash jumped on 72.4%.

Appendix 1: Peers in Entertainment


Below you can find Dynam Japan Holdings Co Ltd benchmarking vs. other companies in Entertainment 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 FY2013 FY2014 FY2015 FY2016 FY2017
China Star Cultural Media Group Ltd ($8172)-40.9%-62.1%-4.8%326.4%
Pegasus Entertainment Holdings Ltd ($1326)40.4%-30.0%15.2%187.5%
Nan Hai Corp Ltd ($680)18.7%36.0%33.2%112.3%
China 3D Digital Entertainment Ltd ($8078)295.2%185.2%-44.3%105.3%
Amax International Holdings Ltd ($959)11.6%-9.6%3.1%104.9%
 
Median (18 companies)11.6%1.2%-4.3%6.9%
Dynam Japan Holdings Co Ltd ($6889)1.1%-6.8%0.9%0.6%


Top companies by Gross margin, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
China Vanguard Group Ltd ($8156)88.2%93.8%95.2%91.0%
Amax International Holdings Ltd ($959)92.1%98.6%96.6%70.6%
Nan Hai Corp Ltd ($680)65.3%65.8%62.1%60.2%
Bingo Group Holdings Ltd ($8220)71.2%55.1%57.4%57.9%
Global Digital Creations Holdings Ltd ($8271)40.0%38.0%40.1%46.6%
 
Median (12 companies)48.7%44.1%42.7%36.4%


Top companies by EBITDA margin, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Neptune Group Ltd ($70)98.6%86.6%99.0%76.3%
Nan Hai Corp Ltd ($680)62.0%8.3%17.5%35.4%
Global Digital Creations Holdings Ltd ($8271)15.0%30.5%16.0%24.9%
China Animation Characters Co Ltd ($1566)38.2%44.5%21.4%22.2%
Pegasus Entertainment Holdings Ltd ($1326)12.4%19.5%-41.9%3.7%
 
Median (14 companies)19.2%17.0%-1.7%-14.4%
Dynam Japan Holdings Co Ltd ($6889)25.7%24.6%16.7%19.4%18.0%


Top companies by CAPEX/Revenue, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Amax International Holdings Ltd ($959)2.7%17.2%59.8%42.5%
China Vanguard Group Ltd ($8156)58.3%4.0%4.2%26.5%
Universe International Holdings Ltd ($1046)1.1%0.1%1.4%21.9%
China 3D Digital Entertainment Ltd ($8078)9.0%2.0%8.1%18.8%
Magnum Entertainment Group Holdings Ltd ($2080)3.5%1.1%23.2%4.3%
 
Median (10 companies)7.8%4.6%8.1%2.5%
Dynam Japan Holdings Co Ltd ($6889)6.5%5.6%10.4%8.1%6.3%


Top companies by ROIC, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
China Animation Characters Co Ltd ($1566)119.2%117.8%24.1%14.0%
Nan Hai Corp Ltd ($680)10.2%-2.8%3.7%14.0%
Global Digital Creations Holdings Ltd ($8271)0.4%3.6%0.7%1.7%
Neptune Group Ltd ($70)23.8%21.1%18.1%0.3%
Pegasus Entertainment Holdings Ltd ($1326)18.5%10.3%-21.3%-0.7%
 
Median (18 companies)2.3%-0.3%-2.6%-7.1%
Dynam Japan Holdings Co Ltd ($6889)25.4%21.8%10.5%12.6%10.3%


Top companies by Net Debt / EBITDA

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Nan Hai Corp Ltd ($680)3.5x20.8x12.6x4.5x
China Animation Characters Co Ltd ($1566)-0.0x-0.6x-3.2x0.1x
Neptune Group Ltd ($70)-0.1x-0.0x-0.1x-0.6x
Pegasus Entertainment Holdings Ltd ($1326)-1.3x-1.4x-4.4x
Global Digital Creations Holdings Ltd ($8271)1.0x-0.3x-4.7x-7.5x
 
Median (5 companies)-0.3x-0.2x-0.4x-0.6x
Dynam Japan Holdings Co Ltd ($6889)-0.8x-0.7x-0.6x-0.2x-0.6x