Zhaojin Mining Industry Co Ltd Net Income dropped on 32.3% in 2015 and EBITDA Margin decreased on 2.3 pp from 32.8% to 30.5%
28/03/2016 • About Zhaojin Mining Industry Co Ltd (
$1818) • By InTwits
Zhaojin Mining Industry Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zhaojin Mining Industry Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 33.3%. At the same time it's a lot of higher than industry average of 8.3%.
- CAPEX is quite volatile: 12 in 2015, 56 in 2014, 154 in 2013, 240 in 2012, 386 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.4%
- It operates with high leverage: Net Debt/EBITDA is 6.5x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhaojin Mining Industry Co Ltd ($1818) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,741 | 7,604 | 6,344 | 5,606 | 5,887 | 5.0% |
| Gross Profit | 3,064 | 3,692 | 2,240 | 2,172 | 2,231 | 2.7% |
| SG&A | 670 | 841 | 918 | 1,027 | 1,056 | 2.8% |
| EBITDA | 2,845 | 3,283 | 1,916 | 1,839 | 1,797 | -2.3% |
| Net Income | 1,662 | 1,924 | 734 | 455 | 308 | -32.3% |
Balance Sheet
|
|---|
| Cash | 1,241 | 1,344 | 871 | 866 | 1,780 | 105.6% |
| Short Term Debt | 1,510 | 3,168 | 6,825 | 4,716 | 9,524 | 101.9% |
| Long Term Debt | 1,649 | 2,740 | 2,308 | 4,864 | 3,873 | -20.4% |
Cash flow
|
|---|
| Capex | 1,597 | 2,358 | 2,379 | 2,097 | 1,934 | -7.8% |
Ratios
|
|---|
| Revenue growth | 40.1% | 32.4% | -16.6% | -11.6% | 5.0% | |
| EBITDA growth | 34.8% | 15.4% | -41.6% | -4.0% | -2.3% | |
| Gross Margin | 53.4% | 48.6% | 35.3% | 38.8% | 37.9% | -0.9% |
| EBITDA Margin | 49.6% | 43.2% | 30.2% | 32.8% | 30.5% | -2.3% |
| Net Income Margin | 28.9% | 25.3% | 11.6% | 8.1% | 5.2% | -2.9% |
| SG&A, % of revenue | 11.7% | 11.1% | 14.5% | 18.3% | 17.9% | -0.4% |
| CAPEX, % of revenue | 27.8% | 31.0% | 37.5% | 37.4% | 32.8% | -4.6% |
| ROIC | 24.9% | 21.5% | 7.5% | 6.0% | 4.4% | -1.5% |
| ROE | 27.8% | 25.7% | 8.7% | 5.3% | 3.6% | -1.8% |
| Net Debt/EBITDA | 0.7x | 1.4x | 4.3x | 4.7x | 6.5x | 1.7x |
Revenue and profitability
The company's Revenue increased on 5.0% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.2 pp from 9.1% to 10.3% in 2015.
Gross Margin decreased slightly on 0.85 pp from 38.8% to 37.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 2.9 pp from 8.1% to 5.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Zhaojin Mining Industry Co Ltd had CAPEX/Revenue of 32.8%. CAPEX/Revenue increased slightly on 1.8 pp from 31.0% in 2012 to 32.8% in 2015. Average CAPEX/Revenue for the last three years was 35.9%.Zhaojin Mining Industry Co Ltd investments to CAPEX were large: 108% of EBITDA.
Return on investment
The company operates at low ROIC (4.41%) and ROE (3.57%). ROIC decreased slightly on 1.5 pp from 6.0% to 4.4% in 2015. ROE decreased slightly on 1.8 pp from 5.3% to 3.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.5x and Debt / EBITDA is 7.5x. Net Debt / EBITDA jumped on 1.7x from 4.7x to 6.5x in 2015. Debt jumped on 39.8% in 2015 while cash jumped on 106% in 2015.
Appendix 1: Peers in Mining
Below we provide Zhaojin Mining Industry Co Ltd benchmarking against other companies in Mining industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 24.0% | 4.8% | -44.7% | 303.0% | |
| Huili Resources Group Ltd ($1303) | -47.8% | -33.6% | -91.6% | 219.4% | |
| North Mining Shares Co Ltd ($433) | | -5.5% | -57.1% | 187.0% | -45.9% |
| China Kingstone Mining Holdings Ltd ($1380) | 4,275.3% | -94.5% | -55.6% | 155.2% | |
| |
|---|
| Median (48 companies) | 43.7% | 5.0% | 2.4% | -5.1% | -8.1% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | | 32.4% | -16.6% | -11.6% | 5.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| China Polymetallic Mining Ltd ($2133) | 76.9% | 81.8% | 74.2% | 51.8% | 38.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 64.7% | 63.9% | 54.9% | 51.2% | |
| Hengshi Mining Investments Ltd ($1370) | 54.6% | 32.4% | 55.3% | 50.1% | |
| |
|---|
| Median (48 companies) | 19.1% | 13.4% | 13.8% | 15.4% | 19.4% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 53.4% | 48.6% | 35.3% | 38.8% | 37.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | |
| China Polymetallic Mining Ltd ($2133) | -322.0% | 62.8% | 58.5% | 54.1% | 2.8% |
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Gold International Resources Corp Ltd ($2099) | | 41.7% | 38.3% | 47.3% | 33.7% |
| Hengshi Mining Investments Ltd ($1370) | 45.7% | 22.8% | 52.0% | 45.4% | |
| |
|---|
| Median (48 companies) | 5.9% | 4.7% | 7.5% | 4.7% | 12.4% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 49.6% | 43.2% | 30.2% | 32.8% | 30.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Huili Resources Group Ltd ($1303) | 3.9% | 181.0% | 1,508.6% | 279.5% | |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| China Gold International Resources Corp Ltd ($2099) | | 64.7% | 156.1% | 95.6% | 81.4% |
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | |
| |
|---|
| Median (48 companies) | 14.3% | 17.0% | 15.7% | 13.4% | 11.5% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 27.8% | 31.0% | 37.5% | 37.4% | 32.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Silver Group Ltd ($815) | 48.0% | 57.6% | 31.6% | 35.8% | |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | 3.5% |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| |
|---|
| Median (49 companies) | 2.9% | 0.9% | 2.7% | 0.0% | 1.5% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 24.9% | 21.5% | 7.5% | 6.0% | 4.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 10.5x | 2.2x |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 0.9x | 8.4x | 39.4x | 10.3x | |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x |
| |
|---|
| Median (27 companies) | 1.4x | 2.1x | 1.9x | 4.4x | 2.8x |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 0.7x | 1.4x | 4.3x | 4.7x | 6.5x |
