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Hengan International Group Co Ltd (1044 HK) - As Reported

In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016


12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Income Statement
Revenues
Cost of goods sold -12,842.802 9,722.983 -9,873.445
Gross profit 10,987.976 8,939.593 9,403.952
Other gains net
Revenue 23,830.778 18,662.576 19,277.397
Operating Expenses
Administrative expenses -1,561.615 1,304.775 1,483.329
Operating profit 5,750.058 4,888.003 4,742.869
Distribution costs 4,840.381 3,293.007 3,720.725
Distribution costs
Non-Operating Expenses
Income tax expense -1,368.716
Profit before income tax 5,342.886
Finance costs - net 339.329 -183.858
Finance costs -639.525 509.968 -360.302
Profit for the year 3,974.170 3,301.737 3,761.462
Finance income -232.353 -170.639 176.444
Income tax expense 1,299.209 -1,079.445
Profit before income tax 4,548.674 4,559.011
Earnings
Non-controlling interests 58.352 41.874 164.641
Dividends 2,450.821
Basic earnings per share 3.188 2.667 2.967
Diluted earnings per share 3.184 2.663 2.967
From discontinued operations 0.022 0.103
From discontinued operations 0.022 0.103
From continuing operations 2.645 2.730
From continuing operations 2.641 2.641
Basic and Diluted EPS
Shareholders of the Company 3,915.818 3,259.863 3,596.821
Others
Partial Record Indicator n/a n/a n/a
Comprehensive Income
Currency translation differences -72.150 -204.791 -106.689
Shareholders of the Company 3,844.876 3,055.188 3,488.705
Non-controlling interests 57.144 -41.758 166.068
Total comprehensive income for the year 3,096.946 3,654.773
Extraordinary Items
Profit for the year from discontinued operations -52.272 281.896
Profit for the year from continuing operations 3,249.465 3,479.566
Operating Income
Other income and other gains net 1,164.078 546.192 542.971
Reference Items
Research and development expenses 433.050 380.328 411.361
Depreciation (Note 14)
Depreciation of property, plant and equipment 710.419
Depreciation of property, plant and equipment (Note 14)
Depreciation of property, plant and equipment (Note 13) 571.082 626.162
Provision for impairment of trade receivables (Note 21) 1.700 22.936 30.858
Interest expenses Bank borrowings
Interest expense on Convertible bonds wholly repayable within five y
Convertible bonds wholly repayable within five years (Note 32)
Bank borrowings
- - Bank borrowings
Bank borrowings wholly repayable within 5 years
Convertible bonds
Bank borrowings wholly repayable within 5 years 347.884
Convertible bonds 163.137 135.424 80.690
Borrowings 262.719 278.304
Net exchange gains
Net exchange losses
Exchange gain -55.099
Exchange loss 130.371 121.970
[NON OP] - Net Foreign Exchange / ( 0.000 0.000
Losses on disposal of property, plant and equipment 26.651 15.568 -32.709
Interest income from cash and cash equivalents -232.353 -170.639 -121.345
Profit for the year from discontinued operations 52.272 281.896
Less: Borrowing costs capitalised in buildings and machinery under 18.649 -23.799 -14.282
Dividends
Basic earnings per share 3.188
Basic earnings per share (HK$)
Basic earnings per share (RMB) 0.022 2.864
Weighted average number of ordinary shares in issue (thousands) 1,228.107 1,222.464 1,212.364
Diluted earnings per share 3.184
Diluted earnings per share (HK$)
Diluted earnings per share (RMB) 0.022 2.864
Weighted average number of ordinary shares for diluted earnings per 1,229.789 1,224.391 1,212.364
Equity-settled share-based payment 77.212 50.502 51.029
Interest Expense from Borrowing
Trust receipt bank loans
Short-term bank loans
Long-term bank loans wholly repayable within five years
Convertible bonds wholly repayable within five years
Bank borrowings
Other finance charges
Bank borrowings
- - Bank borrowings
Bank borrowings wholly repayable within 5 years
Convertible bonds
Convertible bonds 163.137
Bank borrowings wholly repayable within 5 years 347.884
Interests income from long-term and short-term bank deposits -474.319
Amortisation of intangible assets (Note 17) 13.012 2.643 2.746
REVENUE 23,830.778 18,662.576 19,277.397
Sanitary napkins
Disposable diapers
Tissue paper products
Product Revenue
Skin care, food and snacks products and others
Food and snacks products
Tissue paper products 8,694.154 9,066.499
Skin care products and others
Sanitary napkins products
Disposable diapers products
Sanitary napkins products
Tissue paper products
Disposable diapers products
- - Tissue paper products
- - Sanitary napkins products
- - Disposable diapers products
Disposable diapers products
Sanitary napkins products 7,427.740
Others
Food and snacks products 1,534.749
Disposable diapers products 3,094.573
Tissue paper products 10,857.293
Sanitary napkin products 6,185.130 6,568.885
Disposable diaper products 2,451.014 2,150.252
Hong Kong profits tax
PRC income tax
Hong Kong profits tax 240.166
PRC income tax 1,219.984
Hong Kong profits tax
PRC income tax
- - Hong Kong profits tax
- - PRC income tax
Current tax on profits for the year 1,072.730 921.857
PRC withholding income tax 190.369 211.995
Deferred income tax, net (Note 31) -91.434 36.110 -54.407
OTHER INCOME AND OTHER GAINS 1,164.078 546.192 542.971
Realised fair value gains on derivative financial instruments 39.727
Income tax expense -21.042 -16.025
Raw materials and consumables used 7,975.150 8,277.728
Interests income from long-term and short-term bank deposits -474.319 -313.131 242.425
Final, proposed/ 1.150 0.960 1.100
Finance costs, net 407.172 339.329 183.858
Finance costs: 639.525 509.968 360.302
Interim, paid 0.850 0.780 0.850
Non-audit services 0.666 0.501 1.051
Revenue 1,020.051 617.746
Directors Remuneration
remuneration
directors emoluments
Mr. Wang Ming Fu 0.120 0.097 0.103
Mr. Chan Henry 0.120 0.097 0.103
Mr. Hui Lin Chit 2.390 1.752 1.457
Mr. Loo Hong Shing Vincent 3.022 2.261
Mr. Xu Chun Man 0.190 0.126 0.088
Mr. Sze Wong Kim 0.159 0.082 0.066
Ms. Ada Ying Kay Wong 0.120 0.097 0.103
Mr. Hui Ching Chi 0.263 0.502 0.578
Mr. Xu Da Zuo 1.641 1.186 0.948
Mr. Sze Man Bok 0.553 0.466 0.426
Mr. Xu Shui Shen 3.038 2.112 1.742
Mr. Hung Ching Shan 0.359 0.303 0.245
managements emoluments
Mr. Ho Kwai Ching, Mark 0.120 0.097 0.103
Mr. Zhou Fang Sheng 0.120 0.097 0.103
Mr. Loo Hong Shing Vincent (Note) 1.628
Auditor's remuneration
Adjustments for assumed conversion of convertible bonds (thousands)
Share options
Share options (thousands)
Share options
Share options (thousands)
Share options (thousands) 1.682
Adjusted for share options (thousands) 1.927
Weighted Avg NumberPotential Dilutive Shr 0.000
Finance income: -232.353 -170.639 -176.444
Government grants income (Note) 665.634 481.810 491.969
Interim, paid, 1,042.779 953.165 1,031.079
Operating leases rentals 107.347 83.151 77.539
Others 13.355 29.039
Other finance charges 16.782 13.654 15.590
Profit before income tax 73.314 30.810
Net gain on distribution in specie 267.111
Final, proposed 1,408.042 1,166.057 1,325.377
Employee benefit expense, including directors emoluments (Note 12 1,898.803 1,351.153 1,458.475
Amortisation of land use rights (Note 16) 28.676 28.260 24.071
(Reversal of)/provision for inventories write-down (Note 20) 5.634 7.629 -7.701
Audit services 6.562 5.300 6.100
Others 916.423 1,332.278 1,491.761
Exchange gain/(loss) from operating activities --
Loss on disposal/write-off of property, plant and equipment
Losses on disposal/write off of property, plant and equipment
Unrealised fair value (losses)/gains on derivative financial instrum
Losses on disposal/write off of property, plant and equipment and l
Unrealised fair value losses on derivative financial instruments (No
Realised fair value (losses)/gains on derivative financial instrumen
Unrealised fair value losses on derivative financial instruments -28.906 -1.073
Operating exchange (loss)/gain net
land use rights
Losses on disposal of property, plant and equipment and land use rig -26.651
Exchange (loss)/gain from operating activities net -1.893
Exchange loss from operating activities net -217.630 -196.701
Losses on disposal of property, plant and equipment -15.568 -32.709
Realised fair value gains on derivative financial instruments 28.906
Loss on early redemption of convertible bonds (Note 30) -18.885
Exchange loss from operating activities net 1.893 217.630 -196.701
weighted average applicable tax rate 24.200 24.200 23.300
Marketing and advertising expenses 2,598.962 1,832.422 2,082.303
gross profit margin 46.100 48.800
Groups revenue 12.500 2.600 3.300
capital expenditure 1,754.669 933.348
Share-based compensation expenses 77.212 50.502 51.029
Dividend income
Losses on disposal/write-off of property, plant and equipment
Loss on disposal/write off of property, plant and equipment
Weighted Avg. Shares - Basic & Diluted
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - As Reported
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Balance Sheet
Noncurrent Assets
Deferred income tax assets 217.229 186.094 210.813
Intangible assets 603.522 599.356 498.510
Prepayments for non-current assets 356.534 151.924 163.281
Non-current finance lease receivables
Non-current assets 13,870.549 11,389.884 12,017.712
Long-term bank deposits 1,096.463 850.000 1,760.000
Investment properties 238.994 185.886 194.848
Non-current finance lease receivables
Total assets 42,576.596 32,964.353 34,144.728
Current Assets
Inventories 3,694.833 3,296.015 3,194.641
Other receivables, prepayments and deposits 1,219.729 1,065.537 962.189
Restricted bank deposits 39.700 21.132 14.622
Current finance lease receivables
Derivative financial instruments
Tax recoverable 109.141 337.187
Trade and bills receivables 2,455.109 2,216.559 2,743.500
Cash and bank balances 21,296.676 14,866.085 14,874.877
Trade receivables
Other receivables, prepayments and deposits
Cash and cash equivalents
Current assets 28,706.047 21,574.469 22,127.016
Current Liabilities
Trade payables 2,299.705 2,277.890 2,078.591
Short-term bank loans unsecured
Short-term bank loans secured
Bank borrowings 15,164.387
Borrowings 9,696.293 11,918.574
Other payables and accrued charges 1,431.641 992.084 1,201.870
Deferred income on government grants
Current income tax liabilities 90.682 59.737 79.860
Derivative financial instruments 0.000 30.084 1.119
Net current assets 9,719.632
Bills payable
Total assets less current liabilities 23,590.181
. Bonds Payable (ST) - 4,656.907 0.000
Other payables and accrued charges
Trade and bills payables
Deferred income on government grants
Trust receipt bank loans
Current portion of long-term bank loans unsecured
Current liabilities 18,986.415 17,712.995 15,280.014
Non Current Liabilities
Non-current liabilities 5,527.122 159.563 4,103.858
Convertible bonds 5,390.267 0.000 472.719
Borrowings 0.000 0.000 3,524.687
Deferred income tax liabilities 136.855 159.563 106.452
Deferred income on government grants 0.000
Total liabilities 24,513.537 17,872.558 19,383.872
Stockholder Equity
Non-controlling interests 425.419 380.928 34.065
Unappropriated retained earnings
Proposed dividend
Retained earnings 11,538.232 11,654.829
Other reserves 4,815.132 3,044.503 2,944.971
Total equity 18,063.059 15,091.795 14,760.856
Proposed final dividend 1,408.042
Unappropriated retained earnings 11,292.028
Share capital 122.438 128.132 126.991
Equity attributable to shareholders of the company 17,637.640 14,710.867 14,726.791
Other reserves
Unappropriated retained earnings
Proposed dividend
Total equity and liabilities 42,576.596 32,964.353 34,144.728
Fixed Assets
Property, plant and equipment 8,861.823 7,468.314 7,344.807
Construction-in-progress 1,383.631 1,089.602 1,094.145
Land use rights 1,112.353 858.708 751.308
Reference Items
Trade receivables-- net
20INVENTORIES 3,694.833 3,296.015 3,194.641
Prepayments for rental fee and utility fee 34.671 27.519 28.746
Long-term bank deposits 850.000 1,760.000
Leasehold land
Leasehold land and buildings 4,694.347
Officeequipment, furnitureand fixtures 254.702 234.517 232.920
PROPERTY, PLANT AND EQUIPMENT 13,070.592 11,253.240 11,478.413
Accumulated depreciation -4,208.769 -3,784.926 -4,133.606
Net book amount 8,861.823 7,468.314 7,344.807
Customerrelationships 23.139 15.300
Goodwill 495.300 517.860 479.713
Patents andtrademarks 52.861 42.776 1.837
Trade payables 2,277.890 2,078.591
Current portion of long-term 1,069.784
Staff salaries payables 137.359
Accrued expenses and other payables 519.537 344.442 540.170
Dividend payables 54.767
Non-controlling interests 425.419 380.928 34.065
Sharepremium account 0.000 525.098 523.284
Retained Earnings 12,700.070
Proposed dividend
Retained earning
Retainedearnings 11,538.232 11,654.829
Number of shares 1,224.385 1,218.094 1,204.888
Ordinary shares 0.100
Raw materials 1,988.267 1,908.575 1,715.351
Work-in-progress 38.047 27.632 0.000
Finished goods 1,451.120 1,193.289 1,321.464
Undrawn bank borrowing facilities 17,022.679 19,314.756 21,361.800
Future Minimum Operating Lease Obligations
Commitments under operating leases 51.686
operating leases
minimum lease payments 40.134 34.859
Operating Leases - Year 1
Not later than 1 year 39.074 30.348 28.336
Later than 5 years 0.000 0.013
Less: provision for impairment 6.351
Softwares 32.222 23.420 16.960
Totalequity 18,063.059 15,091.795 14,760.856
Current portion of long-term bank loans unsecured
Short-term bank loans unsecured 12,804.107
Long-term bank loans unsecured 0.000
Trust receipt bank loans 1,290.496
Long-term bank loans unsecured
Short-term bank loans unsecured
bank loans unsecured
unsecured
unsecured
Convertible bonds (Note 32)
bank loans unsecured 1,069.784
CONVERTIBLE BONDS 5,390.267
Long-term bank loans unsecured (a) 0.000 536.700
Short-term bank loans unsecured (a) 8,977.333 11,290.704
29BORROWINGS (contin 4,656.907
liability component of convertible 472.719
Medium-term notes (b) 0.000 1,995.519
Trust receipt bank loans (a) 718.960 627.870
Corporate bonds (c) 0.000 992.468
INVESTMENT PROPERTIES 185.886 194.848
Advance receipts from customers 144.506 138.406 145.767
Others
Interest income receivables
Interest income receivables
Others
Interest income receivables 201.795 116.628 110.824
Others 188.113 78.615 77.123
Statutory reserves 2,041.072 1,842.972 1,920.751
Others
Payables for property, plant and equipment
Payables for purchase of property, plant and equipment
Others
Payables for purchase of property, plant and equipment
Payables for purchase of property, plant and equipment 512.906
Others 36.449
Payables for purchase of property, plant and equipment 478.946 494.573
Exchange reserve 2,383.567 308.147 209.687
Long-term bank loans unsecured (a) 0.000 0.000 536.700
Capitalredemption reserve 1.807 1.922 1.922
Convertible bonds equity component 176.565
CONTINGENT LIABILITIES 0.000 0.000
Long-term bank deposits 1,096.463
Term deposits
Bank deposits
- - Bank deposits
Bank deposits 10,234.192
Number of Options Granted during the period 5.333 0.000
Number of Options Outstanding - End of Period 14.294 19.577 16.742
Medium-term notes (b) 0.000 1,995.519
Trust receipt bank loans (a) 718.960 627.870
Trade receivables 2,426.291
Bills receivable 35.169
Trade and bills receivables 2,216.559 2,743.500
Advance payments to suppliers 405.317 442.683 300.314
Authorised share 3,000.000
Authorised share capital 300.000
Machinery 8,065.933
Capital Commitments, Contracted, but not Provided
Plant, machinery and equipment
Land and buildings
Leasehold land and buildings 297.085 156.952 166.525
Machinery and equipment 786.841 332.558 295.418
Land use rights
Total 15,716.085 16,634.877
Bank deposits 8,972.385 9,312.075
Land use rights
CONSTRUCTION-IN-PROGRESS 1,089.602 1,094.145
Spare parts and consumables 217.399 166.519 157.826
Operating Leases - 2-5 Years
Later than 1 year and not later than 5 years 12.612 9.786 6.510
LAND USE RIGHTS 858.708 751.308
Motorvehicles 55.610 45.318 39.957
Other taxes payables 26.117 30.290 21.360
Sharecapital 122.438 128.132 126.991
Machinery 6,734.485 6,913.988
Convertible bonds equitycomponent 140.634 12.966
Attributable to the Companys shareholders 17,637.640 14,710.867 14,726.791
. Trade Receivable and Bill Receivable - Gross 2,240.562 2,793.312
Less: provision for impairment 24.003 49.812
Exercised
Options Exercised -0.048 -0.023
Leasehold land and buildings 4,238.920 4,291.548
Short-term bank loans unsecured
Trust receipt bank loans 1,290.496
Short-term bank loans unsecured
Short-term bank loans 12,804.107
Short-term bank loans unsecured (a) 8,977.333 11,290.704
Bills payable
Purchase Obligations - Total
Capital commitments 1,083.926
Contracted but not provided for
Contracted but not provided
Total capital commitments 489.510 461.943
Cash and bank balances 21,296.676
Long-term bank deposits 1,096.463
Cash and cash equivalents
Term deposits
Bank deposits
- - Bank deposits
Bank deposits 10,234.192
Cash and cash equivalents 5,893.700 5,562.802
Over 365 days 40.887 42.638
Share-basedcompensation reserve 212.121 225.730 276.361
Debt Schedule - Year 1
7 to 12 months
6 months or less
Trust receipt bank loans 1,290.496
Short-term bank loans
Within 1 year
Short-term bank loans unsecured
less than 1 year
Short-term bank loans -- unsecured
Short-term bank loans unsecured 12,804.107
bank loans unsecured 1,069.784
. Debt Schedule - Year 1 - 9,696.293 11,918.574
Between 1 and 2 years 0.000 0.000 536.700
Debt Schedule - Total Debt
Total Debt
Total bank borrowings 15,164.387
CONVERTIBLE BONDS 5,390.267
Total borrowings 9,696.293 15,443.261
Long-term bank loans unsecured (a) 0.000 536.700
Options Canceled or Forfeited -2.538
Forfeited
Cancelled or lapsed during the year -0.048
CONVERTIBLE BONDS 5,390.267
Risk free rate
Expected volatility
Expected dividend yield
At 1 January
exercisable 7.732 9.121
Number of Options Outstanding - Beginning of Period 14.342 14.294 19.577
US 11,109.049 4,374.754 1,856.243
Hong Kong dollar
HK$
HK 4,055.338 2,113.801 8,945.365
CONVERTIBLE BONDS 5,390.267
Renminbi
RMB 0.000 3,207.738 1,653.666
29BORROWINGS (contin 4,656.907
Corporate bonds (c) 0.000 992.468
Medium-term notes (b) 0.000 1,995.519
liability component of convertible 472.719
EUR
Proposed dividend
Debt Schedule - Year 5
Debt Schedule - Year 3
Debt Schedule - Year 4
Common Stock
Construction in Progress - Gross
Revaluation Reserve
Weighted Average Fair Value per Option
Total Intangible Assets
Bills payables
Trade and Other Payables
Other Reserves
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - As Reported
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Cash Flow
Cash From Operating Activities
Discontinued operations 93.206 125.802
Net cash generated from operating activities 5,028.011 3,470.732 4,086.843
Income tax paid -1,641.230 -1,379.961 -1,337.065
Interest paid
Cash From Investing Activities
Proceeds from disposal of property, plant and equipment 257.444 3.638 7.433
Purchase of property, plant and equipment, including additions o -1,577.532 -858.597 -901.113
Increase in long-term and short-term bank deposits -1,689.470
Increase in long-term and short-term bank deposits -883.630 -1,249.690
Government grants received
Other Investing Activities
Increase in prepayment for non-current assets
Decrease/(increase) in prepayments for non-current assets
Decrease in restricted bank deposits 20.050
Discontinued operations -1.249 -6.399
Purchase of intangible assets -35.260
Acquisition of subsidiaries
(Increase)/decrease in prepayments for non-current assets
Interest received 772.513 524.394 369.574
Decrease in prepayments for non-current assets
. Land Rights/Prepaid Lease Payments - Purchase -82.909 -9.036 0.000
Sale of available-for-sale financial assets
Interest received
Net cash used in investing activities -2,335.164 -1,224.480 -1,780.195
Cash from Financing Activities
Dividends paid -2,271.013 -2,068.642 -2,197.136
Proceeds from shares issued under the employee share option sche 0.000 2.729 2.729
Buy-back of shares -547.031 -387.121 -719.569
Effect of foreign exchange rate changes -10.608 54.889 89.593
Exchange gains on cash and cash equivalents
Effect of Exchange Rate on Cash 0.000
Distribution in specie -336.289
Proceeds from discounted bills
Payment of discounted bills
Payment for discounted bills
Decrease in cash and cash equivalents 361.841 -2,888.383 -84.202
Cash and cash equivalents at 31 December 11,062.484 5,893.700 5,562.802
Discontinued operations -31.572 -2.981
Cash and cash equivalents at 1 January 10,711.251 8,727.194 5,893.700
Dividends paid to non-controlling interests -30.717 -10.172 -6.074
Proceeds from capital contribution by non-controlling interests 2.340 0.000 9.800
Repayment of bank borrowings -14,910.530
Redemption of convertible bonds
Repayment of borrowings -14,592.748 -15,183.898
Borrowings - Decrease 0.000
Payment for early redemption of convertible bonds -4,483.151
Proceeds from bank borrowings 15,767.251
Proceeds from issuance of convertible bonds
Proceeds from issuance of convertible bonds,
Proceeds from issuance of convertible bonds, net off issuing expens 0.000
Proceeds from borrowings 12,240.649 20,445.426
Interest paid -341.306 -297.945 -261.095
Decrease in restricted bank deposits 10.187 6.510
Net cash used in financing activities -2,331.006 -5,134.635 -2,390.850
Direct Method
Continuing operations 6,669.241 4,757.487 5,298.106
Reference Items
Depreciation
Depreciation of property, plant and equipment 710.419
Reference Items
Depreciation of property, plant and equipment (Note 14)
Depreciation of property, plant and equipment (Note 13) 571.082 626.162
Share-based compensation expenses (Note 26) 77.212 50.502 51.029
Depreciation of investment properties (Note 14) 2.505 5.293 4.271
Increase in inventories 673.079 -358.400 -38.426
Loss on early redemption of convertible bonds (Note 6) 0.000 18.885
Amortisation of intangible assets (Note 17) 13.012 2.643 2.746
Amortisation of deferred income on government grants -0.921
Operating profit before working capital changes 6,093.566 5,277.126 5,232.484
Reference Items
Losses on disposal/write-off of property, plant and equipment
Losses on disposal/write-off of property,plant and equipment
Gains on disposal of assets classified as held-for-sale
Reference Items
Loss on disposal/write-off of property, plant and equipment
Loss on disposal/write-off of property, plant and equipment (Note 6)
Loss on disposal/write-off of property, plant and equipment and l
Loss on disposal/write-off of property, plant and equipment and l
Losses on disposal of property, plant and equipment and land use
Losses on disposal of property, plant and equipment and land use ri 26.651
Losses on disposal of property, plant and equipment (Note 6) 15.568 32.709
(Decrease)/increase in trade payables, other payables and accrued c 341.439 314.879 -152.163
Interest income and other finance income 639.525 -483.770 -418.869
Liquidation of subsidiaries
Decrease/(increase) in trade and bills receivables, other receivable -438.843 -476.118 256.211
Profit before income tax 5,342.886 4,548.674 4,559.011
Cash generated from operations 6,669.241
Unrealised fair value gain on derivative financial instruments
Unrealised fair value losses/(gain) on derivative financial instrume
Unrealised fair value losses on derivative financial instruments (No 28.906 1.073
Unrealised fair value losses on derivative financial instruments 0.000
Realised fair value gains on derivative financial instruments -39.727
Trading Derivatives - Unrealized 0.000
Realised fair value gains on derivative financial instruments (Note -28.906
Amortisation of land use rights (Note 16) 28.676 28.260 24.071
Cash generated from operations 6,669.241
Depreciation of investment properties (Note 14) 2.505 5.293 4.271
Profit before income tax 5,342.886 4,548.674 4,559.011
Reference Items
Depreciation
Depreciation of property, plant and equipment 710.419
Reference Items
Depreciation of property, plant and equipment (Note 14)
Depreciation of property, plant and equipment (Note 13) 571.082 626.162
Amortisation of land use rights (Note 16) 28.676 28.260 24.071
Amortisation of intangible assets (Note 17) 13.012 2.643 2.746
Reference Items
Losses on disposal/write-off of property, plant and equipment
Losses on disposal/write-off of property,plant and equipment
Gains on disposal of assets classified as held-for-sale
Reference Items
Loss on disposal/write-off of property, plant and equipment
Loss on disposal/write-off of property, plant and equipment (Note 6)
Loss on disposal/write-off of property, plant and equipment and l
Loss on disposal/write-off of property, plant and equipment and l
Losses on disposal of property, plant and equipment and land use
Losses on disposal of property, plant and equipment and land use ri 26.651
Losses on disposal of property, plant and equipment (Note 6) 15.568 32.709
Share-based compensation expenses (Note 26) 77.212 50.502 51.029
Amortisation of deferred income on government grants -0.921
Reference Items
Finance income
Reference Items
Interest income and other finance income 639.525 -483.770 -418.869
Operating profit before working capital changes 6,093.566 5,277.126 5,232.484
Increase in inventories 673.079 -358.400 -38.426
Decrease/(increase) in trade and bills receivables, other receivable -438.843 -476.118 256.211
(Decrease)/increase in trade payables, other payables and accrued c 341.439 314.879 -152.163
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Enterprise Value
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Market Capitalization 79,443.884 74,638.346 61,413.092
Growth (YoY) -9.768 -6.049 -17.719
- Cash & Equivalents 17,049.096 14,016.085 13,114.877
Growth (YoY) 11.643 -17.790 -6.430
+ Preferred Equity 0.000 0.000 0.000
+ Minority Interest 340.570 380.928 34.065
Growth (YoY) 13.306 11.850 -91.057
+ Total Debt 16,455.069 14,353.200 15,915.980
Growth (YoY) 8.554 -12.773 10.888
Enterprise Value 79,190.427 75,356.389 64,248.260
Growth (YoY) -10.248 -4.842 -14.741

Total Capital 30,915.487 29,444.995 30,676.836


Growth (YoY) 8.993 -4.756 4.184
Total Debt/Total Capital 53.226 48.746 51.883
Growth (YoY) -0.403 -8.417 6.435
Total Debt/EV 0.208 0.190 0.248
Growth (YoY) 20.948 -8.335 30.060

EV/Sales 4.151 4.038 3.333


Growth (YoY) -22.199 -2.724 -17.460
EV/EBITDA 16.405 13.969 12.009
Growth (YoY) -22.164 -14.850 -14.034
EV/EBIT 18.743 15.724 13.678
Growth (YoY) -22.727 -16.109 -13.010
EV/Cash Flow to Firm 16.981 19.007 14.411
Growth (YoY) -38.030 11.935 -24.184
EV/Free Cash Flow to Firm 23.750 24.332 18.061
Growth (YoY) -42.891 2.451 -25.774

Diluted Market Cap 79,794.540 75,024.179 61,794.132


Growth (YoY) -9.393 -5.978 -17.634
Diluted Enterprise Value 79,541.082 75,742.222 64,629.300
Growth (YoY) -9.873 -4.776 -14.672
Periodic EV to Shares Outstanding 64.678 61.864 53.323
Growth (YoY) -9.735 -4.350 -13.806

Trailing 12 Month Values for Ratios


Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Multiples
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
P/E 25.423 23.166 18.670
Average 26.303 26.323 20.823
High 28.641 30.631 22.663
Low 24.347 22.399 18.627

P/Book 5.626 5.074 4.170


Average 6.015 5.782 4.561
High 6.550 6.728 4.963
Low 5.440 4.906 4.079

P/Tangible Book 5.826 5.289 4.316


Average 6.234 5.987 4.755
High 6.789 6.967 5.174
Low 5.633 5.114 4.253

P/Sales 4.177 4.014 3.206


Average 4.619 4.325 3.608
High 5.070 5.389 4.013
Low 4.016 3.655 3.135

P/Cash Flow 18.233 20.260 14.729


Average 25.271 18.892 18.205
High 27.544 21.968 19.820
Low 17.762 16.283 14.729

P/Free Cash Flow 26.203 26.473 18.758


Average 39.701 27.140 23.785
High 43.283 31.570 25.897
Low 25.525 23.400 18.758

EV/Sales 4.151 4.038 3.333


Average 4.780 4.442 3.679
High 5.218 5.176 4.068
Low 4.182 3.817 3.222

EV/EBITDA 16.405 13.969 12.009


Average 18.884 17.546 12.731
High 20.612 20.456 14.073
Low 16.529 13.969 11.147

EV/EBIT 18.743 15.724 13.678


Average 21.732 20.045 14.331
High 23.721 23.371 15.841
Low 18.884 15.724 12.547

Price/Share 62.735 59.245 50.970


High 69.179 83.092 61.258
Low 56.641 56.352 48.776

Enterprise Value 79,190.427 75,356.389 64,248.260


Average 80,311.896 84,096.945 68,673.992
High 87,619.851 98,005.942 75,918.906
Low 74,235.874 72,272.714 60,130.023
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Profitability
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Returns
Return on Common Equity 22.919 22.614 24.437
Growth (YoY) -5.727 -1.331 8.062
Return on Assets 9.462 9.724 10.719
Growth (YoY) -11.767 2.764 10.238
Return on Capital 11.581 11.826 13.388
Growth (YoY) -10.863 2.115 13.207
Return on Invested Capital 10.436 11.407 12.012
Growth (YoY) -7.190 9.300 5.306

Margins
Gross Margin 46.108 47.901 48.782
Growth (YoY) 2.189 3.888 1.839
EBITDA Margin 25.302 28.905 27.753
Growth (YoY) -0.045 14.240 -3.985
Operating Margin 22.146 25.680 24.366
Growth (YoY) 0.684 15.955 -5.116
Incremental Operating Margin 23.351
Growth (YoY) 328.954
Pretax Margin 22.420 24.373 23.650
Growth (YoY) -5.293 8.712 -2.969
Income before XO Margin 16.677 17.412 18.050
Growth (YoY) -6.296 4.408 3.666
Net Income Margin 16.432 17.467 18.658
Growth (YoY) -6.443 6.303 6.818
Net Income to Common Margin 16.432 17.467 18.658
Growth (YoY) -6.443 6.303 6.818

Additional
Effective Tax Rate 25.618 28.562 23.677
Growth (YoY) 3.209 11.495 -17.104
Dvd Payout Ratio 62.588 66.069 71.086
Growth (YoY) 2.232 5.562 7.594
Sustainable Growth Rate 8.574 7.673 7.066
Growth (YoY) -9.049 -10.512 -7.917
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Growth
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
1 Year Growth
Revenue 12.482 -1.433 3.294
EBITDA 12.431 12.603 -0.822
Operating Income 13.251 14.293 -1.990
Net Income to Common 5.235 4.779 10.337
EPS Diluted 5.396 5.268 11.416
EPS Diluted before XO 5.396 4.398 3.370
EPS Diluted before Abnormal 5.359 3.569 5.065
Dividend per Share 8.199 9.409 12.399

Accounts Receivable 12.389 12.777 23.773


Inventory -15.757 11.431 -3.076
Fixed Assets 3.849 3.565 -2.404
Total Assets 5.937 -3.287 3.581
Modified Working Capital -13.930 4.943 19.318
Working Capital -6.600 -50.373 77.316
Employees -8.824 -4.194 -15.825
Accounts Payable 9.667 23.729 -8.749
Short-Term Debt 14.596 18.232 -16.962
Total Debt 5.844 -12.773 10.888
Total Equity 6.764 4.366 -2.193
Capital 6.273 -4.756 4.184
Book Value per Share 7.287 4.724 1.205

Cash From Operations 41.076 -14.761 13.474


Capital Expenditures 18.000 -34.233 3.859
Net Change In Cash -92.385 88.322
Free Cash Flow 54.262 -6.250 16.422
Cash Flow to Firm 41.218 -14.342 12.456
Free Cash Flow to Firm 53.238 -6.412 14.864

5 Year Growth
Revenue 17.077 9.784 6.367
EBITDA 15.366 13.300 12.662
Operating Income 15.139 13.412 12.735
Net Income to Common 13.084 8.941 10.336
EPS Diluted 12.524 8.984 10.632
EPS Diluted before XO 12.524 8.803 8.805
EPS Diluted before Abnormal 12.592 8.709 9.083
Dividend per Share 12.720 8.966 11.774

Accounts Receivable 22.698 13.373 12.313


Inventory 11.185 7.092 6.063
Fixed Assets 19.089 13.884 6.923
Total Assets 24.651 15.919 12.539
Modified Working Capital 12.031 6.105 10.066
Working Capital 21.789 -0.514 17.732
Employees 5.517 -0.803 -4.211
Accounts Payable 21.303 15.294 6.376
Short-Term Debt 47.457 34.719 16.611
Total Debt 49.742 26.089 22.141
Total Equity 14.206 10.459 7.428
Total Capital 5 Year Growth 26.277 16.567 13.661
Book Value per Share 14.266 10.673 8.456

Cash From Operations 16.722 12.888 7.920


Net Change In Cash -34.161
Free Cash Flow 19.311 22.076 31.125
Cash Flow to Firm 17.810 13.964 8.560
Free Cash Flow to Firm 20.810 23.240 30.474

Sequential Growth
Revenue 12.482 -1.433 3.294
EBITDA 12.431 12.603 -0.822
Operating Income 13.251 14.293 -1.990
Net Income to Common 5.235 4.779 10.337
EPS Diluted 5.396 5.268 11.416
EPS Diluted before XO 5.396 4.398 3.370
EPS Diluted before Abnormal 5.359 3.569 5.065
Dividend per Share 8.199 9.409 12.399

Accounts Receivable 12.389 12.777 23.773


Inventory -15.757 11.431 -3.076
Fixed Assets 3.849 3.565 -2.404
Total Assets 5.937 -3.287 3.581
Modified Working Capital -13.930 4.943 19.318
Working Capital -6.600 -50.373 77.316
Employees -8.824 -4.194 -15.825
Accounts Payable 9.667 23.729 -8.749
Short-Term Debt 14.596 18.232 -16.962
Total Debt 5.844 -12.773 10.888
Total Equity 6.764 4.366 -2.193
Capital 6.273 -4.756 4.184
Book Value per Share 7.287 4.724 1.205

Cash From Operations 41.076 -14.761 13.474


Capital Expenditures 18.000 -34.233 3.859
Net Change In Cash -92.385 -1,115.372
Free Cash Flow 54.262 -6.250 16.422
Cash Flow to Firm 41.218 -14.342 12.456
Free Cash Flow to Firm 53.238 -6.412 14.864
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Credit
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Short and Long Term Debt 16,455.069 14,353.200 15,915.980
Growth (YoY) 8.554 -12.773 10.888
Short-Term Debt 12,139.880 14,353.200 11,918.574
Growth (YoY) 17.529 18.232 -16.962
Long Term Debt 4,315.189 0.000 3,997.406
Growth (YoY) -10.644

Total Debt/T12M EBITDA 3.409 2.661 2.975


Growth (YoY) -5.858 -21.948 11.808
Net Debt/EBITDA -0.123 0.062 0.524
Growth (YoY) -357.370 737.788

Total Debt/EBIT 3.895 2.995 3.388


Growth (YoY) -6.540 -23.102 13.139
Net Debt/EBIT -0.141 0.070 0.596
Growth (YoY) -354.069 747.775

EBITDA to Interest Expense 12.246 14.411 15.521


Growth (YoY) -22.405 17.672 7.703
EBITDA-CapEx/Interest Expense 8.550 11.370 12.393
Growth (YoY) -23.135 32.979 8.998
EBIT to Interest Expense 10.719 12.802 13.626
Growth (YoY) -21.840 19.439 6.435

EBITDA/Cash Interest Paid 17.667 18.106 20.491


Growth (YoY) 4.057 2.485 13.175
EBITDA-CapEx/Cash Interest Paid 12.802 15.194 17.040
Growth (YoY) 2.224 18.684 12.151
EBIT/Cash Interest Paid 15.463 16.085 16.085
Growth (YoY) 4.816 4.023 11.843
Cash Interest Paid 271.191 297.945 261.095
Growth (YoY) 8.311 9.865 -12.368
Interest Expense 391.223 374.344 344.712
Growth (YoY) 44.895 -4.308 -7.916

Common Equity/Total Assets 41.426 44.627 43.130


Growth (YoY) 0.699 7.727 -3.352
Long-Term Debt/Equity 29.841 0.000 27.081
Growth (YoY) -18.394
Long-Term Debt/Capital 13.958 0.000 13.031
Growth (YoY) -18.017
Long-Term Debt/Total Assets 12.660 0.000 11.707
Growth (YoY) -17.757

Total Debt/Equity 113.794 95.106 107.826


Growth (YoY) -0.861 -16.423 13.374
Total Debt/Capital 53.226 48.746 51.883
Growth (YoY) -0.403 -8.417 6.435
Total Debt/Total Assets 48.277 43.542 46.613
Growth (YoY) -0.087 -9.809 7.055

Net Debt/Equity -4.108 2.234 18.977


Growth (YoY) -381.657 749.533
Net Debt/Capital -4.284 2.185 15.950
Growth (YoY) -398.006 629.984

EBITDA 4,791.038 5,394.487 5,350.124


Growth (YoY) 12.431 12.603 -0.822
EBITDA-CapEx 3,471.705 4,526.854 4,449.011
Growth (YoY) 10.720 30.393 -1.720
EBIT 4,193.438 4,792.502 4,697.145
Growth (YoY) 13.251 14.293 -1.990
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Liquidity
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Cash Ratio 1.122 0.791 0.858
Growth (YoY) -3.020 -29.455 8.469
Current Ratio 1.512 1.218 1.448
Growth (YoY) -6.395 -19.440 18.892
Quick Ratio 1.251 0.916 1.038
Growth (YoY) -2.704 -26.744 13.250
CFO/Avg Current Liab 0.304 0.225 0.254
Growth (YoY) 8.992 -26.126 13.197
Common Equity/Total Assets 41.426 44.627 43.130
Growth (YoY) 0.699 7.727 -3.352

Long-Term Debt/Equity 29.841 0.000 27.081


Growth (YoY) -18.394
Long-Term Debt/Capital 13.958 0.000 13.031
Growth (YoY) -18.017
Long-Term Debt/Total Assets 12.660 0.000 11.707
Growth (YoY) -17.757

Total Debt/Equity 113.794 95.106 107.826


Growth (YoY) -0.861 -16.423 13.374
Total Debt/Capital 53.226 48.746 51.883
Growth (YoY) -0.403 -8.417 6.435
Total Debt/Total Assets 48.277 43.542 46.613
Growth (YoY) -0.087 -9.809 7.055

CFO/Total Liabilities 22.270 20.686 21.643


Growth (YoY) 33.930 -7.112 4.626
CFO/CapEx 3.288 4.261 4.656
Growth (YoY) 19.556 29.607 29.607
Altman's Z-Score 4.174 4.293 3.744
Growth (YoY) -10.013 2.853 -12.795

Total Available Line Of Credit 13,627.539 19,314.756 21,361.800


Growth (YoY) -29.734 41.733 10.598

Total Commercial Paper Outstanding


Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Working Capital
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Accounts Receivable Turnover 10.273 8.925 7.773
Days Sales Outstanding 35.531 40.895 47.086
Inventory Turnover 3.179 3.109 3.042
Days Inventory Outstanding 114.830 117.386 120.301
Accounts Payable Turnover 5.528 4.885 4.486
Accounts Payable Turnover Days 66.032 74.714 81.583

Cash Conversion Cycle 84.329 83.567 85.804


Inventory to Cash Days 150.360 158.281 167.387

Total Inventory 2,957.906 3,296.015 3,194.641


Inventory Raw Materials 1,591.711 1,908.575 1,715.351
Inventory In Progress 30.459 27.632 0.000
Inventory Finished Goods 1,161.697 1,193.289 1,321.464
Other Inventory 174.039 166.519 157.826
Source: Bloomberg
Hengan International Group Co Ltd (1044 HK) - Yield Analysis
In Millions of CNY except Per Share FY 2014 FY 2015
12 Months Ending 12/31/2014 12/31/2015
T12 Cash Flows to Equity
+ Cash From Operations 4,337.721 3,697.181
Growth (YoY) 41.421 -14.767
+ Capital Expenditures -1,319.333 -867.633
Growth (YoY) -18.288 34.237
Free Cash Flow 3,018.387 2,829.548
Growth (YoY) 54.639 -6.256
Market Capitalization 79,443.884 74,638.346
Growth (YoY) -9.768 -6.049
Free Cash Flow Yield 3.816 3.777
Growth (YoY) 74.702 -1.020

Dividends Paid -1,804.475 -2,068.642


Growth (YoY) 2.710 14.640
Net Share Repurchases -434.653 -384.392
Growth (YoY) 11.564
Net ST Debt Repayments 680.723
Net LT Debt Repayments -2,352.099
Growth (YoY)
Other Financing Activities -30.976 23.332
Growth (YoY)
T12 Cash to Suppliers of Capital -1,589.381 -4,781.801
Growth (YoY) -200.859
Market Capitalization 79,443.884 74,638.346
Growth (YoY) -9.768 -6.049
T12 Shareholder Yield 2.016 6.407
Growth (YoY) 217.836

- Dividends Paid -1,804.475 -2,068.642


Growth (YoY) 2.710 14.640
- Net Share Repurchases -434.653 -384.392
Growth (YoY) 11.564
T12 Cash to Shareholders 2,239.128 2,453.034
Growth (YoY) 33.643 9.553
Market Capitalization 79,443.884 74,638.346
Growth (YoY) -9.768 -6.049
T12 Shareholder Yield, Ex Debt 2.840 3.287
Growth (YoY) 51.532 15.735

T12 Cash Flows to the Firm


+ Cash From Operations 4,337.721 3,697.181
Growth (YoY) 41.421 -14.767
+ Capital Expenditures -1,319.333 -867.633
Growth (YoY) -18.288 34.237
+ After-Tax Interest Expense 291.001 267.422
Growth (YoY) 43.710 -8.103
Trailing 12M Free Cash Flow To Firm 3,309.388 3,096.970
Growth (YoY) 53.612 -6.419
Periodic Enterprise Value 79,190.427 75,356.389
Growth (YoY) -10.248 -4.842
T12 FCFF Yield 4.210 4.110
Growth (YoY) 75.105 -2.392

- Dividends Paid -1,804.475 -2,068.642


Growth (YoY) 2.710 14.640
- Net Share Repurchases -434.653 -384.392
Growth (YoY) 11.564
- Net ST Debt Repayments 680.723
- Net LT Debt Repayments -2,352.099
Growth (YoY)
- Other Financing Activities -30.976 23.332
Growth (YoY)
T12 Cash to Suppliers of Capital -1,589.381 -4,781.801
Growth (YoY) -200.859
Periodic Enterprise Value 79,190.427 75,356.389
Growth (YoY) -10.248 -4.842
T12 Capital Yield 2.022 6.346
Growth (YoY) 213.803
Source: Bloomberg
Yield Analysis
FY 2016
12/31/2016

4,195.322
13.474
-901.113
-3.859
3,294.209
16.422
61,413.092
-17.719
5.331
41.125

-2,197.136
6.212
-718.251
-86.854

778.377

-239.441

-2,376.451
50.302
61,413.092
-17.719
3.870
-39.600

-2,197.136
6.212
-718.251
-86.854
2,915.387
18.848
61,413.092
-17.719
4.747
44.442

4,195.322
13.474
-901.113
-3.859
263.094
-1.619
3,557.303
14.864
64,248.260
-14.741
5.537
34.723

-2,197.136
6.212
-718.251
-86.854

778.377

-239.441

-2,376.451
50.302
64,248.260
-14.741
3.699
-41.710
Hengan International Group Co Ltd (1044 HK) - DuPont Analysis
In Millions of CNY except Per Share FY 2014 FY 2015 FY 2016
12 Months Ending 12/31/2014 12/31/2015 12/31/2016
Tax Burden
Net Inc to Comn/Pre-Tax Profit % 73.290 71.666 78.895
Growth (YoY) -1.214 -2.216 10.086
Adjustment Factor
Normlzd Net Inc/Net Inc to Cmn 1.005 0.988 0.933
Growth (YoY) -0.035 -1.748 -5.565
Interest Burden
Pre-Tax Profit/EBIT % 91.562 92.396 92.970
Growth (YoY) -2.234 0.911 0.622
Operating Margin
EBIT/Revenue % 24.486 26.379 25.438
Growth (YoY) -3.129 7.730 -3.569
Asset Turnover
Revenue/Avg Assets 0.576 0.557 0.575
Growth (YoY) -5.691 -3.329 3.202
Leverage Ratio
Avg Assets/Avg Equity 2.422 2.326 2.280
Growth (YoY) 6.845 -3.985 -1.974

Adjusted Return on Equity 23.037 22.333 22.791


Growth (YoY) -5.760 -3.056 2.048

5 Year Average Adj ROE 24.472 23.934 23.851


Growth (YoY) -3.427 -2.196 -0.346
Payout Ratio 62.588 66.069 71.086
Growth (YoY) 2.232 5.562 7.594
Sustainable Growth Rate 8.574 7.673 7.066
Growth (YoY) -9.049 -10.512 -7.917
Source: Bloomberg