Guangzhou Automobile Group Co Ltd reports 364% EBITDA growth and 3.4 pp EBITDA Margin growth from 1.4% to 4.8%
28/03/2016 • About Guangzhou Automobile Group Co Ltd (
$2238) • By InTwits
Guangzhou Automobile Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Guangzhou Automobile Group Co Ltd doesn't have a profitable business model yet: 2015 ROIC is -0.5%
- EBITDA Margin is expanding: 4.8% in 2015 vs. 1.4% in 2014 vs. -0.3% in 2011
- Guangzhou Automobile Group Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.7%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 6,796 in 2015, 2,370 in 2014, 6,189 in 2013, 2,598 in 2012, 3,017 in 2011
- The company has unprofitable business model: ROIC is at -0.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Guangzhou Automobile Group Co Ltd ($2238) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,984 | 12,964 | 18,824 | 22,383 | 29,418 | 31.4% |
| Gross Profit | 424 | 690 | 1,994 | 2,552 | 3,444 | 34.9% |
| SG&A | 1,594 | 2,145 | 2,779 | 3,716 | 3,893 | 4.8% |
| EBITDA | -35 | -771 | -279 | 305 | 1,416 | 363.8% |
| Net Income | 4,272 | 1,134 | 2,653 | 3,194 | 4,212 | 31.9% |
Balance Sheet
|
|---|
| Cash | 8,239 | 9,316 | 14,083 | 10,274 | 11,548 | 12.4% |
| Short Term Debt | 2,100 | 2,515 | 9,397 | 9,541 | 4,279 | -55.2% |
| Long Term Debt | 7,737 | 7,776 | 4,775 | 4,769 | 7,649 | 60.4% |
Cash flow
|
|---|
| Capex | 2,244 | 2,948 | 1,904 | 3,513 | 4,322 | 23.0% |
Ratios
|
|---|
| Revenue growth | 25.6% | 18.0% | 45.2% | 18.9% | 31.4% | |
| EBITDA growth | -118.7% | 2,132.2% | -63.7% | -209.3% | 363.8% | |
| Gross Margin | 3.9% | 5.3% | 10.6% | 11.4% | 11.7% | 0.3% |
| EBITDA Margin | -0.3% | -5.9% | -1.5% | 1.4% | 4.8% | 3.4% |
| Net Income Margin | 38.9% | 8.7% | 14.1% | 14.3% | 14.3% | 0.0% |
| SG&A, % of revenue | 14.5% | 16.5% | 14.8% | 16.6% | 13.2% | -3.4% |
| CAPEX, % of revenue | 20.4% | 22.7% | 10.1% | 15.7% | 14.7% | -1.0% |
| ROIC | -1.4% | -3.5% | -2.7% | -1.9% | -0.5% | 1.4% |
| ROE | 15.6% | 3.8% | 8.2% | 9.3% | 11.4% | 2.1% |
| Net Debt/EBITDA | | | | 13.2x | 0.3x | -13.0x |
Revenue and profitability
The company's Revenue surged on 31.4% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.5 pp from 29.2% to 30.7% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased on 3.4 pp from 16.6% to 13.2% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Guangzhou Automobile Group Co Ltd's CAPEX/Revenue was 14.7% in 2015. CAPEX/Revenue decreased on 8.0 pp from 22.7% in 2012 to 14.7% in 2015. Average CAPEX/Revenue for the last three years was 13.5%.To fuel this fast growth Guangzhou Automobile Group Co Ltd made large investments to CAPEX (305% of EBITDA).
Return on investment
The company operates at negative ROIC (-0.48%) and low but positive ROE (11.37%). ROIC increased slightly on 1.4 pp from -1.9% to -0.48% in 2015. ROE increased on 2.1 pp from 9.3% to 11.4% in 2015.
Leverage (Debt)
Debt level is 0.3x Net Debt / EBITDA and 8.4x Debt / EBITDA. Net Debt / EBITDA dropped on 13.0x from 13.2x to 0.3x in 2015. Debt dropped on 16.6% in 2015 while cash surged on 12.4% in 2015.
Appendix 1: Peers in Auto Manufacturers
Below you can find Guangzhou Automobile Group Co Ltd benchmarking vs. other companies in Auto Manufacturers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| BAIC Motor Corp Ltd ($1958) | | 83.7% | 263.2% | 341.0% | 49.2% |
| Byd Co Ltd ($1211) | | -4.2% | 16.4% | 7.2% | 40.2% |
| Geely Automobile Holdings Ltd ($175) | | 17.5% | 16.6% | -24.3% | 38.6% |
| Great Wall Motor Co Ltd ($2333) | | 43.1% | 31.7% | 10.2% | 21.3% |
| Wuling Motors Holdings Ltd ($305) | | 8.7% | 1.5% | 0.8% | 10.8% |
| |
|---|
| Median (8 companies) | -0.2% | -0.0% | 12.7% | 7.5% | 16.0% |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | | 18.0% | 45.2% | 18.9% | 31.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.2% | 24.1% | 25.9% | 25.0% | 22.3% |
| Qingling Motors Co Ltd ($1122) | 12.4% | 12.3% | 15.2% | 15.1% | 18.7% |
| BAIC Motor Corp Ltd ($1958) | 1.4% | -4.8% | 3.2% | 15.9% | 18.2% |
| Geely Automobile Holdings Ltd ($175) | 18.2% | 18.5% | 20.1% | 18.2% | 18.2% |
| Byd Co Ltd ($1211) | 14.8% | 11.6% | 13.4% | 13.8% | 15.3% |
| |
|---|
| Median (8 companies) | 14.1% | 11.7% | 13.0% | 14.4% | 16.7% |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 3.9% | 5.3% | 10.6% | 11.4% | 11.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 16.1% | 18.0% | 19.5% | 17.8% | 15.5% |
| Geely Automobile Holdings Ltd ($175) | 14.4% | 14.6% | 15.8% | 15.9% | 14.4% |
| Byd Co Ltd ($1211) | 11.3% | 10.2% | 9.6% | 12.0% | 14.2% |
| Qingling Motors Co Ltd ($1122) | 8.8% | 10.3% | 12.8% | 11.4% | 12.2% |
| BAIC Motor Corp Ltd ($1958) | -27.8% | 9.6% | -13.2% | 5.4% | 9.7% |
| |
|---|
| Median (8 companies) | 8.4% | 8.1% | 6.0% | 6.6% | 11.0% |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | -0.3% | -5.9% | -1.5% | 1.4% | 4.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Brilliance China Automotive Holdings Ltd ($1114) | 4.8% | 8.9% | 10.1% | 13.4% | 12.5% |
| BAIC Motor Corp Ltd ($1958) | 172.9% | 132.8% | 45.0% | 16.1% | 11.0% |
| Great Wall Motor Co Ltd ($2333) | 12.9% | 10.7% | 13.0% | 12.0% | 8.0% |
| Byd Co Ltd ($1211) | 16.2% | 13.0% | 11.2% | 4.2% | 5.7% |
| Geely Automobile Holdings Ltd ($175) | 6.8% | 4.5% | 3.9% | 5.0% | 5.3% |
| |
|---|
| Median (8 companies) | 4.9% | 5.4% | 3.2% | 4.0% | 5.5% |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 20.4% | 22.7% | 10.1% | 15.7% | 14.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.9% | 27.7% | 32.2% | 25.5% | 22.5% |
| Geely Automobile Holdings Ltd ($175) | 15.7% | 16.2% | 19.6% | 13.4% | 15.0% |
| Wuling Motors Holdings Ltd ($305) | 6.2% | 7.2% | 7.7% | 10.0% | 11.8% |
| Byd Co Ltd ($1211) | 6.1% | 2.7% | 2.5% | 3.9% | 8.5% |
| Dah Chong Hong Holdings Ltd ($1828) | 14.2% | 11.4% | 8.5% | 7.7% | 6.2% |
| |
|---|
| Median (8 companies) | 6.2% | 3.6% | 4.6% | 4.5% | 7.4% |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | -1.4% | -3.5% | -2.7% | -1.9% | -0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 1.5x | 2.8x | 3.8x | 3.3x |
| Byd Co Ltd ($1211) | 2.8x | 3.4x | 6.7x | 3.9x | 2.9x |
| BAIC Motor Corp Ltd ($1958) | | 26.0x | | 2.6x | 0.8x |
| Great Wall Motor Co Ltd ($2333) | -0.5x | -0.2x | -0.1x | 0.1x | 0.3x |
| Wuling Motors Holdings Ltd ($305) | 2.8x | 2.0x | 1.9x | 0.8x | -0.6x |
| |
|---|
| Median (7 companies) | 1.5x | 2.0x | 1.9x | 0.8x | 0.3x |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | | | | 13.2x | 0.3x |
