China Gold International Resources Corp Ltd Net Income dropped on 121% in 2015 and EBITDA Margin dropped on 13.7 pp from 47.3% to 33.7%
30.03.2016 • About China Gold International Resources Corp Ltd (
$CGG) • By InTwits
China Gold International Resources Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Gold International Resources Corp Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.5%
- China Gold International Resources Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 84.1%. At the same time it's a lot of higher than industry average of 15.7%.
- CAPEX is quite volatile: 277 in 2015, 266 in 2014, 472 in 2013, 215 in 2012, 71.2 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.5%
- It operates with high leverage: Net Debt/EBITDA is 7.3x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Gold International Resources Corp Ltd ($CGG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 311.3 | 332.4 | 302.6 | 277.8 | 339.9 | 22.4% |
| Gross Profit | 120.8 | 124.9 | 101.9 | 99.0 | 62.8 | -36.5% |
| SG&A | 17.4 | 25.0 | 25.7 | 25.1 | 23.8 | -4.9% |
| EBITDA | 147.4 | 138.7 | 115.8 | 131.5 | 114.4 | -12.9% |
| Net Income | 79.4 | 70.9 | 55.0 | 39.7 | -8.2 | -120.6% |
Balance Sheet
|
|---|
| Cash | 354.3 | 181.7 | 105.9 | 565.6 | 112.4 | -80.1% |
| Short Term Debt | 44.5 | 72.2 | 232.4 | 526.8 | 189.0 | -64.1% |
| Long Term Debt | 183.1 | 140.7 | 272.1 | 658.9 | 763.4 | 15.9% |
Cash flow
|
|---|
| Capex | 71.2 | 215.1 | 472.3 | 265.6 | 276.7 | 4.2% |
Ratios
|
|---|
| Revenue growth | 133.7% | 6.8% | -9.0% | -8.2% | 22.4% | |
| EBITDA growth | 112.7% | -5.9% | -16.5% | 13.5% | -12.9% | |
| Gross Margin | 38.8% | 37.6% | 33.7% | 35.6% | 18.5% | -17.1% |
| EBITDA Margin | 47.4% | 41.7% | 38.3% | 47.3% | 33.7% | -13.7% |
| Net Income Margin | 25.5% | 21.3% | 18.2% | 14.3% | -2.4% | -16.7% |
| SG&A, % of revenue | 5.6% | 7.5% | 8.5% | 9.0% | 7.0% | -2.0% |
| CAPEX, % of revenue | 22.9% | 64.7% | 156.1% | 95.6% | 81.4% | -14.2% |
| ROIC | 6.8% | 5.9% | 4.0% | 3.0% | 1.5% | -1.6% |
| ROE | 6.4% | 5.4% | 4.0% | 2.8% | -0.6% | -3.3% |
| Net Debt/EBITDA | -0.9x | 0.2x | 3.4x | 4.7x | 7.3x | 2.6x |
Revenue and profitability
China Gold International Resources Corp Ltd's Revenue jumped on 22.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 47.0% to 43.9% in 2015.
Gross Margin dropped on 17.1 pp from 35.6% to 18.5% in 2015. SG&A as a % of Revenue decreased on 2.0 pp from 9.0% to 7.0% in 2015.
Net Income marign dropped on 16.7 pp from 14.3% to -2.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
China Gold International Resources Corp Ltd's CAPEX/Revenue was 81.4% in 2015. China Gold International Resources Corp Ltd's CAPEX/Revenue surged on 16.7 pp from 64.7% in 2012 to 81.4% in 2015. It's average CAPEX/Revenue for the last three years was 111%.To fuel this fast growth the company made large investments to CAPEX (242% of EBITDA).
Return on investment
The company operates at low but positive ROIC (1.46%) and negative ROE (-0.57%). ROIC decreased slightly on 1.6 pp from 3.0% to 1.5% in 2015. ROE decreased on 3.3 pp from 2.8% to -0.57% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.3x and Debt / EBITDA is 8.3x. Net Debt / EBITDA surged on 2.6x from 4.7x to 7.3x in 2015. Debt dropped on 19.7% in 2015 while cash dropped on 80.1% in 2015.
Management team
The company's CEO Bing Liu is a founder and has spent 4 years at the company. China Gold International Resources Corp Ltd's CFO is Derrick Zhang. Derrick Zhang has 7 years tenure at the company.
Appendix 1: Peers in Mining
Below you can find China Gold International Resources Corp Ltd benchmarking vs. other companies in Mining 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 |
|---|
| Serabi Gold ($SBI) | | | | | 177.8% |
| Anglo Pacific Group ($APY) | | -56.3% | -2.8% | -76.4% | 149.4% |
| Kirkland Lake Gold Inc ($KGI) | | 54.7% | -5.1% | 14.2% | 26.9% |
| Centamin ($CEE) | | 25.2% | 18.2% | -6.2% | 7.6% |
| Orosur Mining Inc ($OMI) | | 19.0% | 13.0% | -24.1% | -18.0% |
| |
|---|
| Median (7 companies) | 29.0% | 19.0% | -2.8% | -15.4% | 7.6% |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | | -9.0% | -8.2% | 22.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Serabi Gold ($SBI) | -14,912.1% | | | 2.3% | 32.8% |
| Rambler Metals & Mining ($RAB) | 50.2% | 44.7% | 39.6% | 52.2% | 30.6% |
| Caledonia Mining Corp ($CAL) | 57.6% | 54.4% | 45.9% | 34.7% | 26.9% |
| Kirkland Lake Gold Inc ($KGI) | 29.7% | 38.5% | 18.3% | 6.1% | 22.8% |
| Centamin ($CEE) | 62.3% | 60.2% | 44.9% | 24.2% | 18.1% |
| |
|---|
| Median (6 companies) | 47.3% | 42.9% | 30.2% | 22.7% | 24.8% |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | 37.6% | 33.7% | 35.6% | 18.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Anglo Pacific Group ($APY) | 90.3% | 76.2% | 77.9% | -58.0% | 53.7% |
| Kirkland Lake Gold Inc ($KGI) | 25.6% | 34.9% | 16.4% | 13.6% | 32.5% |
| Centamin ($CEE) | 61.9% | 61.4% | 44.9% | 35.6% | 30.4% |
| Rambler Metals & Mining ($RAB) | -26.1% | -194.4% | 29.6% | 45.1% | 20.5% |
| Serabi Gold ($SBI) | -101,064.8% | | | -12.6% | 19.1% |
| |
|---|
| Median (7 companies) | 37.4% | 31.9% | 29.6% | 20.3% | 20.5% |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | 41.7% | 38.3% | 47.3% | 33.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Caledonia Mining Corp ($CAL) | 15.3% | 10.5% | 18.0% | 11.5% | 33.8% |
| Kirkland Lake Gold Inc ($KGI) | 54.9% | 44.6% | 72.9% | 47.7% | 21.6% |
| Rambler Metals & Mining ($RAB) | 640.5% | 820.8% | 24.2% | 13.9% | 20.7% |
| Orosur Mining Inc ($OMI) | 34.7% | 53.8% | 29.6% | 14.1% | 19.7% |
| Centamin ($CEE) | 41.0% | 55.9% | 55.8% | 18.7% | 14.0% |
| |
|---|
| Median (7 companies) | 37.8% | 44.6% | 24.2% | 14.0% | 19.7% |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | 64.7% | 156.1% | 95.6% | 81.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kirkland Lake Gold Inc ($KGI) | 11.3% | 19.7% | 1.5% | -0.7% | 9.2% |
| Caledonia Mining Corp ($CAL) | 61.7% | 37.6% | 34.9% | 18.1% | 8.4% |
| Centamin ($CEE) | 30.2% | 24.6% | 15.7% | 6.6% | 4.5% |
| Serabi Gold ($SBI) | -13.8% | -9.1% | -8.9% | -5.8% | 1.2% |
| Anglo Pacific Group ($APY) | 7.9% | 3.0% | 3.6% | -1.3% | 1.1% |
| |
|---|
| Median (7 companies) | 12.4% | 4.9% | 2.4% | 2.3% | 1.2% |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | 5.9% | 4.0% | 3.0% | 1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rambler Metals & Mining ($RAB) | | | 2.5x | 0.6x | 2.4x |
| Serabi Gold ($SBI) | | | | | 1.4x |
| Kirkland Lake Gold Inc ($KGI) | -1.0x | -0.3x | 3.2x | 4.1x | 0.6x |
| Anglo Pacific Group ($APY) | -1.0x | -2.1x | -1.4x | | 0.3x |
| Caledonia Mining Corp ($CAL) | -0.3x | -1.2x | -0.9x | -1.6x | -1.1x |
| |
|---|
| Median (6 companies) | -0.7x | -0.5x | 0.2x | 0.2x | 0.5x |
|---|
| China Gold International Resources Corp Ltd ($CGG) | | 0.2x | 3.4x | 4.7x | 7.3x |
