Today businesses can measure hundreds of KPIs, but does it make them become world class? More KPIs don't translate to better performance. What matters is profitability and growth or one simple measure - A. Stotz Profitable Growth. In this presentation A. Stotz Profitable Growth is analyzed for 10 Asian companies in 10 different sectors.

1. 13 February 2015By: Andrew Stotz, CFA and Sornsak Kongcharoenpanich
SAMPLE
Profitable Growth analysis: 10 companies

2. 13 February 2015 2
Source: A. Stotz Investment Research
A. Stotz Profitable Growth
'10 '11 '12 '13 '14
2 3 1 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
2 3 1 1 1 8 6 3 4 5
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
4 4 3 4 4 3 3 2 2 2 8 6 5 5 4 9 8 2 3 6
Profitable growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Profitable growth: growth with
minimum asset use
Why: The way to be world class and
sustainable in the long run
Risk: One without the other is not
enough
Profitability: ROA – generating the
most profit out of your assets
Why: Getting more out of assets
means you need less capital
Risk: Only high returns, but no
asset growth, is not sustainable
Growth: EPS growth – the market
values it and so should you
Why: Grow earnings to grow firm
value
Risk: Focus on short-term results is
not a sustainable strategy
Profit margin: cost control to
expand margin
Why: Internal improvement of
efficiency and profitability
Risk: Too tight cost control
prevents growth
Sales growth: externally
driven EPS growth
Why: Essential to grow your
business
Risk: Growth without profit
doesn’t win in the long run
Asset utilization: amount of
revenue per unit of assets
Why: Careful asset growth
preserves capital
Risk: Too tight asset policy
prevents growth
Margin change: internally
driven EPS growth
Why: Getting more profit
from every sale
Risk: Too high prices, or low
costs could hurt sales growth

3. 13 February 2015 3
Profitable Growth
'10 '11 '12 '13 '14
1
2 1
3 1 2
4 2 3 1
5 3 4 2
6 4 5 3 1
7 5 6 4 2
8 6 7 5 3
9 7 8 6 4
10 8 9 7 5
9 10 8 6
10 9 7
10 8
9
10
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
UNVR (UNVR IJ): Struggle to grow the business
'10 '11 '12 '13 '14
1 1 1 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
1 1 1 1 1 6 4 4 4 6
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
1 1 1 1 1 2 2 2 2 2 8 5 4 3 3 5 4 5 5 7
Benchmarked against 300 Cons. Staples companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Mar-10 Aug-12 Jan-15
UNVR
Price (IDR)
Five years of ranking
Decile ranking
improved to no. 1
from no. 6 among
its peers
How to read the diagram
Company was ranked in
3rd decile in 2013

4. 13 February 2015 4
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
PetroChina (857 HK): In the middle on Profitable Growth
'10 '11 '12 '13 '14
4 5 5 4 4
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
4 4 4 3 4 5 8 6 4 4
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
4 3 3 3 3 5 5 5 4 4 3 4 6 5 5 6 8 6 3 4
Benchmarked against 140 Energy companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
2
4
6
8
10
12
14
Mar-10 Aug-12 Jan-15
PetroChina
Price (HKD)

5. 13 February 2015 5
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
MPPA (MPPA IJ): Continuous improvement on Profitable Growth
'10 '11 '12 '13 '14
1 9 5 4 3
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
8 9 7 4 3 9 9 1 2 4
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
6 6 3 1 1 8 9 8 7 6 10 8 2 5 3 6 7 3 3 4
Benchmarked against 730 Cons. Disc. companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mar-10 Aug-12 Jan-15
MPPA
Price (IDR)

6. 13 February 2015 6
'10 '11 '12 '13 '14
10 10 10 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
10 10 10 1 1 6 9 3 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
10 10 9 6 6 10 10 10 1 1 7 8 7 1 1 3 10 1 1 1
Benchmarked against 770 Info Tech companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
Inotera (3474 TT): Profitable Growth jumps to 1st from 10th decile
-
10
20
30
40
50
60
Mar-10 Aug-12 Jan-15
Inotera
Price (TWD)

7. 13 February 2015 7
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
Medy (086900 KS): Profitability and growth are in sync
'10 '11 '12 '13 '14
1 1 1 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
1 1 1 1 1 6 7 2 7 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
7 8 6 6 6 1 1 1 1 1 4 8 1 7 1 8 9 3 9 1
Benchmarked against 280 Health Care companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Mar-10 Aug-12 Jan-15
Medy
Price (KRW)

8. 13 February 2015 8
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
SIA (SIA SP): Struggling to get Profitable Growth
'11 '12 '13 '14 '14
4 8 7 7 8
'11 '12 '13 '14 '14 '11 '12 '13 '14 '14
6 8 7 6 7 1 9 4 5 8
'11 '12 '13 '14 '14 '11 '12 '13 '14 '14 '11 '12 '13 '14 '14 '11 '12 '13 '14 '14
7 6 5 5 5 5 8 7 7 7 7 8 6 7 7 2 9 3 5 7
Benchmarked against 930 Industrials companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
2
4
6
8
10
12
14
16
18
Mar-10 Aug-12 Jan-15
SIA
Price (SGD)

9. 13 February 2015 9
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
STPI (STPI TB): Best Profitable Growth but worst margin change
'10 '11 '12 '13 '14
1 3 1 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
1 2 1 1 1 5 9 1 2 3
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
5 10 7 6 3 1 1 1 1 1 10 10 1 1 1 1 7 8 4 10
Benchmarked against 640 Materials companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
5
10
15
20
25
Mar-10 Aug-12 Jan-15
STPI
Price (Bt)

10. 13 February 2015 10
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
VLL (VLL PM): Room for improvement in growth
'10 '11 '12 '13 '14
5 4 3 3 3
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
5 4 3 3 3 6 5 4 5 4
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
5 4 4 4 4 4 5 4 4 4 6 5 5 5 4 6 6 4 6 5
Benchmarked against 360 Real Estate companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
1
2
3
4
5
6
7
8
Mar-10 Aug-12 Jan-15
VLL
Price (PHP)

11. 13 February 2015 11
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
ADVANC (ADVANC TB): Amazing profitability but neutral growth
'10 '11 '12 '13 '14
1 1 1 1 1
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
1 1 1 1 1 4 6 3 6 6
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
2 1 1 1 2 3 3 2 2 2 5 5 6 8 9 3 7 2 4 3
Benchmarked against 50 Telecom companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
50
100
150
200
250
300
Mar-10 Aug-12 Jan-15
ADVANC
Price (Bt)

12. 13 February 2015 12
Source: A. Stotz Investment Research.
Note: 1 = top ranking and 10 = worst. Most recent year’s data is based on the last 12 months of published data.
FGEN (FGEN PM): Profitability is declining
'10 '11 '12 '13 '14
5 8 2 7 6
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14
7 7 3 6 6 1 8 1 8 4
'10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 '10 '11 '12 '13 '14
3 3 3 5 5 7 8 5 6 5 5 7 2 9 7 2 7 2 7 3
Benchmarked against 120 Utilities companies across Asia.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
-
5
10
15
20
25
30
35
Mar-10 Aug-12 Jan-15
FGEN
Price (PHP)

13. 1313 February 2015
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