Jiangnan Group Ltd is an attractive growth stock
17/03/2015 • About Jiangnan Group Ltd (
$1366) • By InTwits
Jiangnan Group Ltd is a fast-growing stock in Electrical Compo&Equip industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Jiangnan Group Ltd showed fast growth in the last financial year. The company's revenue surged on 25.9% in FY2014. In addition to revenue Jiangnan Group Ltd also keeps delivering EBITDA growth. It was 22.5% in FY2014
In the last 3 years Jiangnan Group Ltd showed fast revenue growth of 18.3% from 2011 to 2014 annualy. EBITDA surged on 24.1% from 2011 to 2014 annualy.
Jiangnan Group Ltd ($1366) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 3,686 | 4,930 | 5,356 | 6,477 | 8,155 |
|---|
| Revenue growth, % | | 33.7% | 8.7% | 20.9% | 25.9% |
|---|
| Gross margin, % | 14.4% | 14.9% | 15.7% | 15.4% | 15.6% |
|---|
| SG&A, % | 4.42% | 4.04% | 3.36% | 3.74% | 3.47% |
|---|
| EBITDA | 368 | 533 | 644 | 831 | 1,017 |
|---|
| EBITDA growth, % | | 44.6% | 21.0% | 28.9% | 22.5% |
|---|
| EBITDA margin, % | 9.99% | 10.8% | 12.0% | 12.8% | 12.5% |
|---|
| Net Income | 232 | 317 | 376 | 504 | 626 |
|---|
| Net Income margin, % | 6.29% | 6.44% | 7.02% | 7.77% | 7.68% |
|---|
| |
| CAPEX | 69 | 21 | 125 | 22 | 28 |
|---|
| CAPEX/Revenue, % | 1.88% | 0.417% | 2.33% | 0.343% | 0.343% |
|---|
| Debt | 1,550 | 2,237 | 2,749 | 4,059 | 4,435 |
|---|
| Cash | 622 | 678 | 1,138 | 1,683 | 1,666 |
|---|
| Net Debt/EBITDA | 2.5x | 2.9x | 2.5x | 2.9x | 2.7x |
|---|
| |
| ROIC, % | 15.4% | 17.0% | 14.9% | 14.1% | 13.5% |
|---|
| ROE, % | 32.0% | 30.9% | 24.6% | 24.2% | 22.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years the company's EBITDA margin surged on 1.70 pp from 10.8% in 2011 to 12.5% in 2014.
Jiangnan Group Ltd shows attractive ROIC at 13.5% for the last 12 months which assumes stable development model. During the last three years it dropped - it was 17.0% in FY2011. Average ROIC for the last three years was 14.2%.
The company showed small Net Income margin decline of 0.100 pp from 7.80% to 7.70% in 2014. In the longer period Jiangnan Group Ltd's Net Income margin surged on 1.30 pp from 6.40% in 2011 to 7.70% in 2014.
Jiangnan Group Ltd operates at ROE of 22.7%. It's average ROE for the last three years was 23.8%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 0.343%. The company showed big decline in CAPEX/Revenue of 0.0739 pp from 0.417% in 2011 to 0.343% in 2014. It's average level of CAPEX/Revenue for the last three years was 1.00%.
Leverage (Debt)
Having such a fast growth profile Jiangnan Group Ltd keeps medium debt level at 2.7x Net Debt/EBITDA. If we look for the longer period the company's leverage decreased on 0.20x from 2.93x in 2011 to 2.72x in 2014.
Peers in Electrical Compo&Equip
Below we provide Jiangnan Group Ltd benchmarking against other companies in Electrical Compo&Equip 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| FDG Electric Vehicles Ltd ($729) | | 2,481.8% | -23.1% | -7.0% | 54.0% |
| Boer Power Holdings Ltd ($1685) | | 11.4% | 20.4% | 10.9% | 51.3% |
| CEC International Holdings Ltd ($759) | | 19.5% | 23.9% | 60.8% | 43.0% |
| Solartech International Hldgs Ltd ($1166) | | -6.5% | -13.4% | -1.8% | 33.7% |
| United Pacific Industries Ltd ($176) | | 11.5% | 15.0% | -84.6% | 26.5% |
| |
|---|
| Median (9 companies) | | 15.5% | -5.8% | -1.8% | 26.5% |
|---|
| Jiangnan Group Ltd ($1366) | | 33.7% | 8.7% | 20.9% | 25.9% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Boer Power Holdings Ltd ($1685) | 36.5% | 37.1% | 36.8% | 36.0% | 35.3% |
| CEC International Holdings Ltd ($759) | 19.9% | 18.5% | 23.6% | 27.9% | 29.9% |
| Johnson Electric Holdings Ltd ($179) | 27.7% | 27.5% | 27.3% | 28.0% | 29.5% |
| Hengxin Technology Ltd ($1085) | 18.7% | 18.5% | 18.4% | 19.6% | 17.7% |
| United Pacific Industries Ltd ($176) | 29.5% | 29.0% | 29.8% | 13.8% | 14.5% |
| |
|---|
| Median (9 companies) | 19.9% | 27.5% | 19.6% | 13.8% | 14.5% |
|---|
| Jiangnan Group Ltd ($1366) | 14.4% | 14.9% | 15.7% | 15.4% | 15.6% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Boer Power Holdings Ltd ($1685) | 23.8% | 28.1% | 26.3% | 27.8% | 28.5% |
| Johnson Electric Holdings Ltd ($179) | 11.6% | 14.9% | 14.2% | 14.5% | 15.5% |
| Hengxin Technology Ltd ($1085) | 12.3% | 11.6% | 9.8% | 10.4% | 9.5% |
| FDG Electric Vehicles Ltd ($729) | -421.4% | 393.7% | 68.3% | 3.3% | 6.4% |
| CEC International Holdings Ltd ($759) | 16.8% | 11.1% | 7.8% | 4.5% | 5.6% |
| |
|---|
| Median (10 companies) | 9.4% | 11.3% | 7.2% | 4.5% | 3.9% |
|---|
| Jiangnan Group Ltd ($1366) | 10.0% | 10.8% | 12.0% | 12.8% | 12.5% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Applied Development Holdings Ltd ($519) | 56.3% | 46.4% | 79.7% | | 1,285.3% |
| FDG Electric Vehicles Ltd ($729) | 1.1% | 177.5% | 374.3% | 82.3% | 71.1% |
| Solartech International Hldgs Ltd ($1166) | 3.3% | 1.7% | 13.8% | 2.6% | 4.4% |
| Johnson Electric Holdings Ltd ($179) | 2.2% | 4.1% | 4.3% | 4.0% | 4.4% |
| CEC International Holdings Ltd ($759) | 2.4% | 10.6% | 8.8% | 10.1% | 4.3% |
| |
|---|
| Median (10 companies) | 2.3% | 7.4% | 5.4% | 4.0% | 3.9% |
|---|
| Jiangnan Group Ltd ($1366) | 1.9% | 0.4% | 2.3% | 0.3% | 0.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Boer Power Holdings Ltd ($1685) | 25.8% | 18.2% | 18.0% | 17.0% | 21.2% |
| Johnson Electric Holdings Ltd ($179) | 7.1% | 13.1% | 11.7% | 11.6% | 12.7% |
| Hengxin Technology Ltd ($1085) | 14.6% | 13.9% | 8.1% | 9.3% | 9.0% |
| CEC International Holdings Ltd ($759) | 3.6% | 3.3% | 2.7% | 0.9% | 4.3% |
| United Pacific Industries Ltd ($176) | 13.5% | 11.7% | 16.7% | -0.5% | -1.1% |
| |
|---|
| Median (10 companies) | 5.4% | 7.5% | 2.7% | -0.5% | -2.7% |
|---|
| Jiangnan Group Ltd ($1366) | 15.4% | 17.0% | 14.9% | 14.1% | 13.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| CEC International Holdings Ltd ($759) | 1.7x | 2.5x | 3.9x | 6.1x | 4.1x |
| Boer Power Holdings Ltd ($1685) | -1.2x | -2.2x | -1.2x | -1.1x | 0.0x |
| Johnson Electric Holdings Ltd ($179) | 0.2x | -0.1x | -0.6x | -1.2x | -1.6x |
| Hengxin Technology Ltd ($1085) | -1.4x | -0.6x | -2.0x | -1.5x | -1.9x |
| United Pacific Industries Ltd ($176) | 0.2x | -0.4x | -0.8x | -6.2x | -32.6x |
| |
|---|
| Median (6 companies) | 0.2x | -0.5x | -1.0x | -1.4x | -1.8x |
|---|
| Jiangnan Group Ltd ($1366) | 2.5x | 2.9x | 2.5x | 2.9x | 2.7x |
