Beijing HualuBaina Film & TV Co., Ltd. – Value Analysis (SHENZHEN:300291) : January 3, 2017

Capitalcube gives Beijing HualuBaina Film & TV Co., Ltd. a score of 59.

Our analysis is based on comparing Beijing HualuBaina Film & TV Co., Ltd. with the following peers – Shanghai New Culture Media Group Co., Ltd. Class A, Huayi Brothers Media Corporation Class A, China Television Media, Ltd. Class A and Beijing Enlight Media Co., Ltd. Class A (300336-CN, 300027-CN, 600088-CN and 300251-CN).

Investment Outlook

Beijing HualuBaina Film & TV Co., Ltd. has a fundamental score of 59 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • Beijing HualuBaina Film & TV Co., Ltd. Class A trades at a lower Price/Book multiple (2.92) than its peer median (3.86).
  • The market expects faster earnings growth from 300291-CN than from its peers and also a turnaround in its current ROE.
  • 300291-CN has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, 300291-CN‘s return on assets has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • Compared with the peers chosen, 300291-CN has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • 300291-CN has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

300291-CN has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 3.59% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 3.59%), and a well-cushioned interest coverage level of 14.65x, 300291-CN can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include 600088-CN.

300291-CN has maintained its Quick & Able profile from the recent year-end.

  • 300291-CN‘s interest coverage has increased 5.07 points from last year’s low but is still below its five-year average interest coverage of 228.61.
  • Though its interest coverage increased to 14.65x from 9.58x (in 2015), its peer median remained relatively stable during this period at 12.54x.
  • Interest coverage rose 5.07 points relative to peers (and is now higher than its peer median).
  • 300291-CN‘s debt-EV is its highest relative to the last five years and compares to a low of 0% in 2013.
  • The increase in its debt-EV to 3.59% from 1.97% (in 2015) was also accompanied by an increase in its peer median during this period to 3.59% from 1.97%.

Access the detailed analysis for Beijing HualuBaina Film & TV Co., Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Shanghai New Culture Media Group Co., Ltd. Class A 13.06 3.68 10.1 48.99
Huayi Brothers Media Corporation Class A 19.11 1.3 3.78 12.41
China Television Media, Ltd. Class A 0 4.11 195.34 999
Beijing Enlight Media Co., Ltd. Class A 3.09 3.66 12.54 233.53
Beijing HualuBaina Film & TV Co., Ltd. Class A 3.59 4.11 14.65 77.89
Peer Median 3.59 3.68 12.54 77.89
Best In Class 3.09 4.11 195.34 999

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Company Profile

Beijing Hualubaina Film & TV Co., Ltd. engages in the investment, production, and release of television dramas and films. It offers film advertisement, television and film books, and other related services. The company was founded on June 19, 2002 and is headquartered in Beijing, China.

Disclaimer

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