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Datang Intl Power Generation CAPEX dropped on 38.5% while Revenue surged on 10.9%

29/03/2018 • About Datang Intl Power Generation ($991) • By InTwits

Datang Intl Power Generation reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Datang Intl Power Generation has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.1%. At the same time it's a lot of higher than industry average of 15.6%.
  • CAPEX is quite volatile: 10,077 in 2017, 16,392 in 2016, 18,187 in 2015, 20,242 in 2014, 32,515 in 2013
  • The company has potentially unprofitable business model: ROIC is at 3.7%
  • It operates with medium-size leverage: Net Debt/EBITDA is 7.7x while industry average is 7.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Datang Intl Power Generation ($991) key annual financial indicators

mln. CNY201320142015201620172017/2016
P&L
Revenue75,22770,19461,19658,26164,60810.9%
Gross Profit18,78914,645-100.0%
SG&A3,8273,828-100.0%
EBITDA25,26224,39623,23422,66918,974-16.3%
Net Income3,4031,7672,809-2,6231,708
Balance Sheet
Cash7,8815,2885,5244,5014,6222.7%
Short Term Debt41,18645,84133,55037,63640,0906.5%
Long Term Debt161,470162,496145,471114,903109,751-4.5%
Cash flow
Capex32,51520,24218,18716,39210,077-38.5%
Ratios
Revenue growth-3.1%-6.7%-12.8%-4.8%10.9%
EBITDA growth13.3%-3.4%-4.8%-2.4%-16.3%
Gross Margin30.7%25.1%-25.1%
EBITDA Margin33.6%34.8%38.0%38.9%29.4%-9.5%
Net Income Margin4.5%2.5%4.6%-4.5%2.6%7.1%
SG&A, % of revenue6.3%6.6%-6.6%
CAPEX, % of revenue43.2%28.8%29.7%28.1%15.6%-12.5%
ROIC5.9%4.8%4.6%4.4%3.7%-0.7%
ROE8.0%4.0%6.3%-6.2%4.2%10.4%
Net Debt/EBITDA7.7x8.3x7.5x6.5x7.7x1.1x

Revenue and profitability


Datang Intl Power Generation's Revenue surged on 10.9%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.5 pp from 38.9% to 29.4% in 2017.

Net Income marign increased on 7.1 pp from -4.5% to 2.6% in 2017.

Capital expenditures (CAPEX) and working capital investments


Datang Intl Power Generation's CAPEX/Revenue was 15.6% in 2017. Datang Intl Power Generation showed big decline in CAPEX/Revenue of 13.2 pp from 28.8% in 2014 to 15.6% in 2017. For the last three years the average CAPEX/Revenue was 24.5%.To deliver this fast growth Datang Intl Power Generation invested a large share of EBITDA (53.1%) to CAPEX.

Return on investment


The company operates at low ROIC (3.70%) and ROE (4.18%). ROIC decreased slightly on 0.68 pp from 4.4% to 3.7% in 2017. ROE jumped on 10.4 pp from -6.2% to 4.2% in 2017.

Leverage (Debt)


Debt level is 7.7x Net Debt / EBITDA and 7.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.1x from 6.5x to 7.7x in 2017. Debt decreased slightly on 1.8% while cash increased on 2.7%.

Appendix 1: Peers in Electricity


Below we provide Datang Intl Power Generation benchmarking against other companies in Electricity 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.