Small/Mid Cap Strategy and Stock Picks - the DBS Vickers ...

Regional Small/Mid Cap Strategy Q2 2008
Sino Biopharmaceutical
Income Statement (HK$ m) Balance Sheet (HK$ m)
FY Dec 2006A 2007A 2008F 2009F FY Dec 2006A 2007A 2008F 2009F
Turnover 735 1,164 1,579 2,088
EBITDA 148 292 410 577
Depr/Amort (22) (29) (38) (38)
Opg Profit 126 263 373 539
Associates Inc 1 0 0 0
Interest (Exp)/Inc 78 79 77 65
Exceptionals - - - -
Pre-Tax Profit 205 342 450 604
Tax (22) (34) (49) (79)
Minority Interest (42) (84) (107) (148)
Net Profit 141 224 294 377
Sales Growth (%) (3) 58 36 32
Net Profit Gr (%) (90.8) 58.9 31.0 28.4
EBITDA Mgn (%) 20.1 25.1 26.0 27.7
Opg Mgn (%) 17.1 22.6 23.6 25.8
Tax Rate (%) 10.8 9.9 11.0 13.0
Fixed Assets 238 339 654 1,042
Other LT Assets 117 182 171 160
Cash/ST Investments 1,684 1,776 1,597 1,472
Other Current Assets 176 298 439 580
Total Assets 2,215 2,596 2,862 3,254
ST Debt - 37 4 4
Other Current Liab 171 287 371 468
LT Debt - 21 12 8
Other LT Liab 13 30 30 30
Minority Interests 123 201 308 456
Shareholders' Equity 1,909 2,019 2,137 2,288
Total Capital 2,215 2,596 2,862 3,254
Share Capital (m) 2,264 2,264 2,264 2,264
Net Cash/(Debt) 1,684 1,717 1,581 1,460
Working Capital 14 32 97 151
Net Gearing (%) cash cash cash cash
Cash Flow Statement (HK$ m)
FY Dec 2006A 2007E 2008F 2009F
Pretax Profit 205 342 450 604
Tax Paid (18) (28) (40) (64)
Depr/Amort 22 29 38 38
Chg in Wkg Cap (10) (19) (65) (54)
Othr Non-Cash 70 232 359 574
Operational CF 269 557 742 1,099
Capex (54) (43) (47) (39)
Assoc, MI, Invsmt (25) - (376) (376)
Others (58) (345) (278) (579)
Investment CF (137) (388) (701) (994)
Net Chg in Debt - 58 (42) (4)
New Capital 3 - - -
Dividend (147) (136) (176) (226)
Financing CF (144) (77) (219) (230)
Chg in Cash (12) 92 (178) (125)
Chg in Net Cash (12) 33 (136) (121)
Rates & Ratio
FY Dec 2006A 2007E 2008F 2009F
ROE (%) 7.0 10.6 12.6 14.5
ROA (%) 6.5 9.3 10.8 12.3
Net Mgn (%) 19.2 19.3 18.6 18.1
Div Cover (x) 1.2 1.7 1.7 1.7
Intr Cover (x) 67.1 113.5 191.5 715.4
Asset Turn (x) 0.3 0.5 0.6 0.7
Asset/Debt (x) n.a. 44.5 178.9 271.2
Gearing (%) 0.0 2.6 0.7 0.4
Net Gearing (%) cash cash cash cash
Debt/EBITDA (x) 0.0 0.2 0.0 0.0
Debt/MktCap (x) 0.0 0.0 0.0 0.0
Capex/Debt (x) n.a. 0.7 2.9 3.2
Capex/Sales (%) 7.3 3.7 3.0 1.8
EV (HK$m) 1,767 1,812 2,054 2,324
EV/EBITDA (x) 11.9 6.2 5.0 4.0
Interim Income Statement (HK$ m)
FY Dec 1H2005 2H2005 1H2006 2H2006
Turnover N/A 392 331 404
Cost of Goods Sold (73) (66) (68) (71)
Gross Profit 291 326 263 333
Other Oper. (Exp)/Inc (214) (309) (223) (247)
Operating Profit 77 17 40 86
Other Non Opg (Exp)/Inc 0 0 0 0
Associates & JV Inc 0 0 0 1
Net Interest (Exp)/Inc 2 17 36 42
Exceptional Gain/(Loss) 100 1,458 0 0
Pre-tax Profit 179 1,492 76 129
Tax (10) (8) (4) (18)
Minority Interest (65) (55) (14) (28)
Net Profit 104 1,429 57 84
Net profit bef Except. 3 (29) 57 84
EBITDA 86 29 51 98
Segmental Breakdown
FY Dec 2006A 2007A 2008F 2009F
Turnover
Hepatitis medicines 482 688 929 1,222
Cardio cerebral medicines 156 262 341 443
Others 96 214 309 424
Total 735 1,164 1,579 2,088
Sales Gth (%) N/A 7.8 (15.7) 22.1
EBITDA Gth (%) N/A (65.9) 74.4 92.3
Opg Profit Gth (%) N/A (78.0) 134.7 116.9
Net Profit Gth (%) N/A 1,280.4 (96.0) 45.8
Gross Margins (%) 79.9 83.1 79.4 82.5
Opg Profit Margins (%) 21.2 4.3 12.0 21.3
Net Profit Margins (%) 28.5 364.4 17.4 20.7
Source: Company, DBS Vickers
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