Sinopharm Group Co Ltd EBITDA jumped on 14.5% and EBITDA Margin showed almost no change
26/03/2018 • About Sinopharm Group Co Ltd (
$1099) • By InTwits
Sinopharm Group Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sinopharm Group Co Ltd is a fast growth stock: 2017 revenue growth was 7.5%, 5 year revenue CAGR was 15.3% at 2017 ROIC 14.1%
- EBITDA Margin is relatively stable: 4.7% in 2017 vs. 4.4% in 2016 vs. 4.1% in 2013
- Sinopharm Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has highly profitable business model: ROIC is at 14.1%
- It operates with high leverage: Net Debt/EBITDA is 0.5x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sinopharm Group Co Ltd ($1099) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 166,866 | 200,131 | 227,069 | 258,388 | 277,717 | 7.5% |
| Gross Profit | 13,379 | 16,328 | 18,618 | 20,671 | 23,077 | 11.6% |
| SG&A | 7,431 | 8,502 | 9,697 | 10,700 | 11,640 | 8.8% |
| EBITDA | 6,779 | 8,697 | 10,175 | 11,281 | 12,921 | 14.5% |
| Net Income | 2,250 | 2,875 | 3,761 | 4,647 | 5,283 | 13.7% |
Balance Sheet
|
|---|
| Cash | 14,002 | 15,232 | 19,919 | 25,573 | 29,011 | 13.4% |
| Short Term Debt | 21,007 | 25,233 | 28,204 | 22,363 | 30,163 | 34.9% |
| Long Term Debt | 4,134 | 4,223 | 608 | 11,135 | 5,441 | -51.1% |
Cash flow
|
|---|
| Capex | 1,224 | 1,645 | 1,080 | 1,229 | 1,804 | 46.8% |
Ratios
|
|---|
| Revenue growth | 22.2% | 19.9% | 13.5% | 13.8% | 7.5% | |
| EBITDA growth | 24.7% | 28.3% | 17.0% | 10.9% | 14.5% | |
| Gross Margin | 8.0% | 8.2% | 8.2% | 8.0% | 8.3% | 0.3% |
| EBITDA Margin | 4.1% | 4.3% | 4.5% | 4.4% | 4.7% | 0.3% |
| Net Income Margin | 1.3% | 1.4% | 1.7% | 1.8% | 1.9% | 0.1% |
| SG&A, % of revenue | 4.5% | 4.2% | 4.3% | 4.1% | 4.2% | 0.1% |
| CAPEX, % of revenue | 0.7% | 0.8% | 0.5% | 0.5% | 0.6% | 0.2% |
| ROIC | 12.9% | 12.9% | 13.3% | 13.5% | 14.1% | 0.6% |
| ROE | 11.5% | 11.7% | 13.1% | 15.0% | 15.8% | 0.7% |
| Net Debt/EBITDA | 1.6x | 1.6x | 0.9x | 0.7x | 0.5x | -0.2x |
Sinopharm Group Co Ltd ($1099) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 68,268 | 69,500 | 69,895 | 70,055 | 8.4% | 9.6% | 6.5% | |
| Net Income | 1,252 | 1,513 | 895 | 1,623 | 22.5% | 0.2% | -16.1% | |
Balance Sheet
|
|---|
Ratios
|
|---|
| Net Income Margin | 1.8% | 2.2% | 1.3% | 2.3% | 0.2% | -0.2% | -0.3% | |
Revenue and profitability
Sinopharm Group Co Ltd's Revenue increased on 7.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.0 pp from 69.9% to 75.0% in 2017.
Gross Margin showed almost no change in 2017. SG&A as a % of Revenue showed almost no change in 2017.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 the company had CAPEX/Revenue of 0.65%. Sinopharm Group Co Ltd's CAPEX/Revenue showed almost no change from 2014 to 2017. It's average level of CAPEX/Revenue for the last three years was 0.53%.
Return on investment
The company operates at good ROIC (14.12%) and ROE (15.75%). ROIC increased slightly on 0.60 pp from 13.5% to 14.1% in 2017. ROE increased slightly on 0.74 pp from 15.0% to 15.8% in 2017.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.7x to 0.5x in 2017. Debt increased on 6.3% while cash surged on 13.4%.
Appendix 1: Peers in Pharmaceuticals
Below we provide Sinopharm Group Co Ltd benchmarking against other companies in Pharmaceuticals 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | -99.9% | 480.0% | -93.1% | 1,473,900.0% | |
| U-Home Group Holdings Ltd ($2327) | -82.5% | -1.6% | -73.4% | 584.6% | |
| China Traditional Chinese Medicine Co Ltd ($570) | 35.2% | 90.0% | 40.0% | 76.1% | |
| Wai Yuen Tong Medicine Holdings Ltd ($897) | 45.9% | -10.5% | 105.6% | 40.9% | |
| Tianda Pharmaceuticals Ltd ($455) | 85.3% | 37.2% | -43.6% | 38.3% | |
| |
|---|
| Median (29 companies) | 13.5% | 14.8% | 3.3% | 8.6% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Asia Resources Holdings Ltd ($899) | 18.3% | 60.5% | | 97.8% | |
| Sino Biopharmaceutical Ltd ($1177) | 77.5% | 76.4% | 77.7% | 79.2% | |
| RM Group Holdings Ltd ($8185) | 78.8% | 76.6% | 77.7% | 77.4% | |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 65.0% | 68.4% | 68.6% | 75.7% | |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 68.4% | 71.4% | 70.2% | 73.3% | |
| |
|---|
| Median (16 companies) | 39.7% | 50.9% | 50.0% | 52.5% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 45.4% | 47.5% | 49.1% | 50.9% | |
| CSPC Pharmaceutical Group Ltd ($1093) | 18.2% | 20.8% | 24.3% | 26.1% | |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 205,840.0% | -15,344.8% | 49,650.0% | 26.0% | |
| Sino Biopharmaceutical Ltd ($1177) | 20.2% | 21.4% | 22.8% | 23.5% | |
| China NT Pharma Group Co Ltd ($1011) | -19.6% | 11.7% | 17.7% | 22.0% | |
| |
|---|
| Median (16 companies) | 20.2% | 21.4% | 20.0% | 11.9% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Asia Resources Holdings Ltd ($899) | 8.1% | 92.0% | | 60.5% | |
| Tianda Pharmaceuticals Ltd ($455) | 3.9% | 10.5% | 24.4% | 22.9% | |
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 2.7% | 3.8% | 4.7% | 5.7% | |
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 11,100.0% | 103.4% | 0.0% | 5.2% | |
| Livzon Pharmaceutical Group Inc ($1513) | 20.2% | 12.2% | 7.3% | 4.9% | |
| |
|---|
| Median (11 companies) | 8.9% | 7.5% | 4.5% | 4.0% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 27.5% | 23.8% | 25.9% | 25.1% | |
| Sino Biopharmaceutical Ltd ($1177) | 26.8% | 26.5% | 26.2% | 24.3% | |
| CSPC Pharmaceutical Group Ltd ($1093) | 12.8% | 18.1% | 21.7% | 24.1% | |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | 22.2% | 19.9% | 20.8% | 15.6% | |
| Livzon Pharmaceutical Group Inc ($1513) | 11.9% | 11.1% | 12.4% | 12.7% | |
| |
|---|
| Median (30 companies) | 9.3% | 10.6% | 10.0% | 6.4% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| China NT Pharma Group Co Ltd ($1011) | | 7.2x | -0.4x | 4.0x | |
| Shandong Xinhua Pharmaceutical Co Ltd ($719) | 3.4x | 2.8x | 3.4x | 2.7x | |
| Sino Biopharmaceutical Ltd ($1177) | -1.4x | -0.5x | -0.2x | -0.1x | |
| CSPC Pharmaceutical Group Ltd ($1093) | 0.1x | -0.1x | -0.3x | -0.6x | |
| Livzon Pharmaceutical Group Inc ($1513) | 0.9x | 0.9x | 0.2x | -1.1x | |
| |
|---|
| Median (12 companies) | -0.4x | -0.6x | -0.4x | -1.3x | |
|---|
