China Biologic Products Holdings, Inc. – Value Analysis (NASDAQ:CBPO) : December 29, 2017

Capitalcube gives China Biologic Products Holdings, Inc. a score of 91.

Our analysis is based on comparing China Biologic Products Holdings, Inc. with the following peers – Baxter International Inc., GlaxoSmithKline plc Sponsored ADR, Hemispherx Biopharma, Inc., China Pharma Holdings, Inc., Novavax, Inc., Gilead Sciences, Inc. and Sinovac Biotech Ltd. (BAX-US, GSK-US, HEB-US, CPHI-US, NVAX-US, GILD-US and SVA-US).

Investment Outlook

China Biologic Products Holdings, Inc. has a fundamental score of 91 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • It’s current Price/Book of 3.55 is about median in its peer group.
  • CBPO-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • CBPO-US has a successful operating model with relatively high net profit margins and asset turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • CBPO-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While CBPO-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • CBPO-US has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

CBPO-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 0.49% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 16.63%), and a well-cushioned interest coverage level of 331.26x, CBPO-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 7 peers for the company have an outstanding debt balance.

CBPO-US has maintained its Quick & Able profile from the recent year-end.

  • CBPO-US‘s interest coverage has declined 234.29 points from last year’s high but remains above its five-year average interest coverage of 161.52.
  • The decrease in its interest coverage to 331.26x from 565.54x (in 2016) was also accompanied by a decrease in its peer median during this period to 1.97x from 9.89x.
  • Interest coverage fell 226.37 points relative to peers. It is also above the 2.50x coverage benchmark unlike the peer median.
  • CBPO-US‘s debt-EV is similar to last year’s low of 0%, which compares to the 2014 high of 5.81%.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (0.49%) and the peer median (16.63%).

Access the detailed analysis for China Biologic Products Holdings, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Baxter International Inc. 11.64 2.8 16.99 60.73
GlaxoSmithKline plc Sponsored ADR 20.13 0.64 7.41 39.64
Hemispherx Biopharma, Inc. 0 1.7 -181.54 -998.79
China Pharma Holdings, Inc. 62.31 1.44 -6.04 13.94
Novavax, Inc. 80.63 3.31 -12.66 -49.66
Gilead Sciences, Inc. 27.48 3.68 14.59 49.26
Sinovac Biotech Ltd. 13.12 2.03 -3.47 14.23
China Biologic Products Holdings, Inc. 0.49 5.21 331.26 1430.72
Peer Median 16.63 2.41 1.97 26.94
Best In Class 0.49 5.21 331.26 1430.72

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Company Profile

China Biologic Products Holdings, Inc. manufactures and distributes plasma-based pharmaceutical products and other biological substances. Its products include human albumin, human immunoglobulin for intravenous injection, human Hepatitis B immunoglobulin, human rabies immunoglobulin, human immunoglobulin, human coagulation factor VIII, human prothrombin complex concentrate, and placenta polypeptide. The company was founded on December 20, 1989 and is headquartered in Beijing, China.

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