Eye on Changfeng Energy Inc as a growth stock: its revenue grew 23.5% and EBITDA 32.0% annually over the last three years
05.06.2015 • About Changfeng Energy Inc (
$CFY) • By InTwits
Have you thought about Changfeng Energy Inc as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Changfeng Energy Inc showed fast growth in the last financial year. Changfeng Energy Inc's revenue surged on 26.3% in FY2014. Together with revenue growth Changfeng Energy Inc also managed to keep EBITDA growth. EBITDA grew 40.5% for the same period.
In the last 3 years Changfeng Energy Inc showed fast revenue growth of 23.5% from 2011 to 2014 annually. EBITDA surged on 32.0% from 2011 to 2014 annually.
Changfeng Energy Inc ($CFY) financials for the last 5 years
| mln. CAD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 22 | 28 | 33 | 42 | 53 |
|---|
| Revenue growth, % | | 27.3% | 18.1% | 26.4% | 26.3% |
|---|
| Gross margin, % | 46.7% | 41.6% | 47.3% | 47.6% | 45.2% |
|---|
| SG&A, % | | | 31.3% | 30.0% | 26.8% |
|---|
| EBITDA | 4 | 6 | 8 | 9 | 13 |
|---|
| EBITDA growth, % | | 52.8% | 35.9% | 20.4% | 40.5% |
|---|
| EBITDA margin, % | 17.0% | 20.4% | 23.5% | 22.4% | 24.9% |
|---|
| Net Income | 1 | 1 | 3 | 2 | 4 |
|---|
| Net Income margin, % | 4.32% | 4.92% | 7.54% | 5.90% | 7.12% |
|---|
| |
| CAPEX | 10 | 5 | 5 | 8 | 6 |
|---|
| CAPEX/Revenue, % | 45.0% | 17.6% | 16.0% | 20.0% | 10.8% |
|---|
| Debt | 16 | 21 | 20 | 29 | 29 |
|---|
| Cash | 3 | 5 | 6 | 15 | 12 |
|---|
| Net Debt/EBITDA | 3.6x | 2.9x | 1.7x | 1.5x | 1.3x |
|---|
| |
| ROIC, % | 10.4% | 12.7% | 16.5% | 16.2% | 17.8% |
|---|
| ROE, % | 9.5% | 11.8% | 17.7% | 14.2% | 17.2% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. EBITDA margin surged on 2.50 pp from 22.4% to 24.9% in 2014. If we look for the longer period Changfeng Energy Inc showed fast EBITDA margin growth of 4.50 pp from 20.4% in 2011 to 24.9% in 2014.
We call Changfeng Energy Inc an attractive growth stock as together with the growth it delivers high ROIC at 17.8%. Three years ago it was lower at 12.7%. It's average level of ROIC for the last three years was 16.8%.
Changfeng Energy Inc's Net Income margin surged on 1.20 pp from 5.90% to 7.10% in 2014. In the last 3 years Changfeng Energy Inc showed fast Net Income margin growth of 2.20 pp from 4.90% in 2011 to 7.10% in 2014.
Changfeng Energy Inc operates at ROE of 17.2%. It's average ROE for the last three years was 16.4%.
Capital expenditures (CAPEX)
To fuel this fast growth Changfeng Energy Inc had to invest in CAPEX.Changfeng Energy Inc's CAPEX/Revenue was 10.8% in FY2014. The company's CAPEX/Revenue dropped on 6.80 pp from 17.6% in 2011 to 10.8% in 2014. Average CAPEX/Revenue for the last three years was 15.6%.
Leverage (Debt)
Having such a fast growth profile Changfeng Energy Inc keeps medium debt level at 1.3x Net Debt/EBITDA. In the last 3 years the company's leverage dropped on 1.57x from 2.85x in 2011 to 1.28x in 2014.
Peers in Energy
Below you can find Changfeng Energy Inc benchmarking vs. other companies in Energy 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Petro Rio SA ($PRJ) | | -36.3% | -32.1% | -34.9% | 10,977.1% |
| ONEnergy Inc ($OEG) | | | | | 6,002.6% |
| Sterling Resources Ltd ($SLG) | | | -94.8% | 4,514.9% | 2,244.4% |
| Ikkuma Resources Corp ($IKM) | | 22.5% | 17.0% | -4.5% | 1,231.1% |
| Spartan Energy Corp ($SPE) | | -8.2% | 16.6% | 29.9% | 923.7% |
| |
|---|
| Median (159 companies) | | 37.8% | 9.6% | 17.0% | 18.3% |
|---|
| Changfeng Energy Inc ($CFY) | | 27.3% | 18.1% | 26.4% | 26.3% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| TransAlta Renewables Inc ($RNW) | | | | 94.4% | 94.5% |
| Advantage Oil & Gas Ltd ($AAV) | 65.0% | 70.5% | 62.0% | 84.5% | 92.5% |
| Freehold Royalties Ltd ($FRU) | 91.4% | 91.7% | 90.4% | 89.0% | 90.2% |
| MEG Energy Corp ($MEG) | 78.8% | 85.5% | 86.8% | 87.4% | 87.6% |
| NXT Energy Solutions Inc ($SFD) | -42.3% | -43.2% | 65.6% | 36.0% | 87.3% |
| |
|---|
| Median (139 companies) | 31.7% | 34.0% | 29.2% | 31.5% | 29.6% |
|---|
| Changfeng Energy Inc ($CFY) | 46.7% | 41.6% | 47.3% | 47.6% | 45.2% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Seven Generations Energy Ltd ($VII) | | | 56.9% | 54.0% | 106.0% |
| Tourmaline Oil Corp ($TOU) | 64.3% | 67.4% | 67.9% | 80.0% | 97.6% |
| Bonavista Energy Corp ($BNP) | 68.4% | 63.8% | 64.6% | 62.6% | 91.6% |
| Bellatrix Exploration Ltd ($BXE) | 55.3% | 42.7% | 58.6% | 83.6% | 89.6% |
| Advantage Oil & Gas Ltd ($AAV) | 44.4% | -4.0% | 5.2% | 66.1% | 87.8% |
| |
|---|
| Median (159 companies) | 22.5% | 25.7% | 25.9% | 31.1% | 29.6% |
|---|
| Changfeng Energy Inc ($CFY) | 17.0% | 20.4% | 23.5% | 22.4% | 24.9% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | | 1,997.8% |
| Petroshale Inc ($PSH) | 79.9% | 30.6% | | 346.6% | 865.9% |
| Toro Oil & Gas Ltd ($TOO) | 353.7% | 192.4% | 139.0% | 39.2% | 808.7% |
| Athabasca Oil Corp ($ATH) | 106.6% | 176.2% | 2,426.4% | 596.6% | 504.7% |
| BNK Petroleum Inc ($BKX) | 180.3% | 139.2% | 195.8% | 789.1% | 316.6% |
| |
|---|
| Median (161 companies) | 51.5% | 44.3% | 50.5% | 39.2% | 48.9% |
|---|
| Changfeng Energy Inc ($CFY) | 45.0% | 17.6% | 16.0% | 20.0% | 10.8% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Pason Systems Inc ($PSI) | 16.7% | 33.5% | 30.0% | 29.7% | 41.0% |
| Sea Dragon Energy Inc ($SDX) | -2.4% | -10.1% | 8.1% | 21.8% | 32.9% |
| Raging River Exploration Inc ($RRX) | | | | | 29.1% |
| High Arctic Energy Services Inc ($HWO) | 34.8% | 27.0% | 31.4% | 26.3% | 24.9% |
| Rooster Energy Ltd ($COQ) | | | | | 22.9% |
| |
|---|
| Median (164 companies) | 2.0% | 4.4% | 3.3% | 4.6% | 5.0% |
|---|
| Changfeng Energy Inc ($CFY) | 10.4% | 12.7% | 16.5% | 16.2% | 17.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Veresen Inc ($VSN) | 4.7x | 22.3x | 16.2x | 14.7x | 30.3x |
| Lightstream Resources Ltd ($LTS) | | | 2.0x | | 27.8x |
| Petroshale Inc ($PSH) | -0.2x | 0.1x | | | 21.7x |
| Connacher Oil and Gas Ltd ($CLC) | 9.3x | 9.7x | 16.7x | 8.8x | 17.1x |
| Pengrowth Energy Corp ($PGF) | 1.5x | 1.5x | 2.9x | 2.1x | 16.8x |
| |
|---|
| Median (136 companies) | 1.3x | 1.2x | 1.5x | 1.5x | 1.4x |
|---|
| Changfeng Energy Inc ($CFY) | 3.6x | 2.9x | 1.7x | 1.5x | 1.3x |
