China State Construction International Holdings Ltd demonstrated healthy growth over the last few years
27/03/2015 • About China State Construction International Holdings Ltd (
$3311) • By InTwits
China State Construction International Holdings Ltd is a fast-growing stock in Engineering&Construction industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
China State Construction International Holdings Ltd showed fast growth in the last financial year. The company's revenue surged on 26.2% in FY2014. At the same time China State Construction International Holdings Ltd well managed its profitability and showed even faster growth in EBITDA of 34.3% for the same period.
If we look for the longer period China State Construction International Holdings Ltd showed fast revenue growth of 28.1% from 2011 to 2014 annualy. EBITDA surged on 42.3% from 2011 to 2014 annualy.
China State Construction International Holdings Ltd ($3311) financials for the last 5 years
| mln. HKD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 11,983 | 16,379 | 21,911 | 27,286 | 34,440 |
|---|
| Revenue growth, % | | 36.7% | 33.8% | 24.5% | 26.2% |
|---|
| Gross margin, % | 11.0% | 11.0% | 12.4% | 13.7% | 13.8% |
|---|
| SG&A, % | 3.93% | 3.38% | 3.21% | 3.52% | |
|---|
| EBITDA | 975 | 1,503 | 2,374 | 3,229 | 4,337 |
|---|
| EBITDA growth, % | | 54.2% | 57.9% | 36.0% | 34.3% |
|---|
| EBITDA margin, % | 8.14% | 9.18% | 10.8% | 11.8% | 12.6% |
|---|
| Net Income | 1,036 | 1,507 | 2,131 | 2,750 | 3,457 |
|---|
| Net Income margin, % | 8.65% | 9.20% | 9.73% | 10.1% | 10.0% |
|---|
| |
| CAPEX | 451 | 527 | 403 | 381 | 514 |
|---|
| CAPEX/Revenue, % | 3.77% | 3.22% | 1.84% | 1.40% | 1.49% |
|---|
| Debt | 5,351 | 6,259 | 10,051 | 12,728 | 14,823 |
|---|
| Cash | 3,730 | 5,459 | 6,876 | 8,126 | 7,452 |
|---|
| Net Debt/EBITDA | 1.7x | 0.5x | 1.3x | 1.4x | 1.7x |
|---|
| |
| ROIC, % | 9.9% | 9.9% | 10.2% | 10.7% | 12.2% |
|---|
| ROE, % | 25.5% | 21.4% | 18.5% | 18.7% | 19.3% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin increased on 0.800 pp from 11.8% to 12.6% in 2014. In the last 3 years EBITDA margin surged on 3.40 pp from 9.20% in 2011 to 12.6% in 2014.
China State Construction International Holdings Ltd shows attractive ROIC at 12.2% for the last 12 months which assumes stable development model. Three years ago it was a bit lower at 9.93%. It's average level of ROIC for the last three years was 11.0%.
The company showed small Net Income margin decline of 0.100 pp from 10.1% to 10% in 2014. If we look for the longer period Net Income margin increased on 0.800 pp from 9.20% in 2011 to 10% in 2014.
China State Construction International Holdings Ltd operates at ROE of 19.3%. It's average ROE for the last three years was 18.8%.
Capital expenditures (CAPEX)
In FY2014 China State Construction International Holdings Ltd had CAPEX/Revenue of 1.49%. China State Construction International Holdings Ltd showed big decline in CAPEX/Revenue of 1.72 pp from 3.22% in 2011 to 1.49% in 2014. For the last three years the average CAPEX/Revenue was 1.58%.
Leverage (Debt)
The company has medium debt level at 1.7x Net Debt/EBITDA to maintain high growth. In the longer period the company's leverage surged on 1.17x from 0.53x in 2011 to 1.70x in 2014.
Valuation vs. comparable companies
At the end of trading day today China State Construction International Holdings Ltd traded at 11.2x EV/EBITDA which is 48% lower than 21.5x Engineering&Construction peer group avearge calculated on the basis of 55 companies. At the end of trading day today China State Construction International Holdings Ltd traded at 11.9x P/E which is 41% higher than 8.4x Engineering&Construction peer group avearge calculated on the basis of 12 companies.
Management team
Zhou Yong is a CEO of China State Construction International Holdings Ltd.
Peers in Engineering&Construction
Below we provide China State Construction International Holdings Ltd benchmarking against other companies in Engineering&Construction 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 |
|---|
| Richly Field China Development Ltd ($313) | | | | -45.0% | 464.2% |
| CNQC International Holdings Ltd ($1240) | | 401.9% | 21.6% | 91.0% | 103.7% |
| China Resources and Transportation Group Ltd ($269) | | -37.0% | 939.8% | 3,196.3% | 87.9% |
| UDL Holdings Ltd ($620) | | -47.3% | -59.6% | 180.0% | 75.6% |
| Hong Kong Aircraft Engineering Co Ltd ($44) | | 21.2% | 12.7% | 26.7% | 61.5% |
| |
|---|
| Median (25 companies) | | 15.4% | 13.7% | 25.9% | 20.3% |
|---|
| China State Construction International Holdings Ltd ($3311) | | 36.7% | 33.8% | 24.5% | 26.2% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Saite Group Co Ltd ($153) | 25.6% | 29.4% | 32.1% | 33.7% | 29.8% |
| Chevalier International Holdings Ltd ($25) | 21.5% | 18.1% | 24.3% | 26.3% | 25.9% |
| KFM Kingdom Holdings Ltd ($3816) | 23.4% | 30.3% | 24.6% | 24.3% | 22.0% |
| CNQC International Holdings Ltd ($1240) | 36.6% | 27.5% | 19.1% | 19.1% | 18.7% |
| Tysan Holdings Ltd ($687) | 33.7% | 22.3% | 9.2% | 11.7% | 18.4% |
| |
|---|
| Median (22 companies) | 13.5% | 11.5% | 9.6% | 11.6% | 11.1% |
|---|
| China State Construction International Holdings Ltd ($3311) | 11.0% | 11.0% | 12.4% | 13.7% | 13.8% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 33.0% | 39.8% | 31.2% | 20.6% | 36.2% |
| China Saite Group Co Ltd ($153) | 23.9% | 27.8% | 30.2% | 31.3% | 27.6% |
| CNQC International Holdings Ltd ($1240) | 41.4% | 23.7% | 19.8% | 19.7% | 19.6% |
| Tysan Holdings Ltd ($687) | 33.6% | 22.1% | 7.9% | 11.5% | 16.6% |
| Sino Credit Holdings Ltd ($628) | 96.9% | 82.5% | 82.8% | | 16.0% |
| |
|---|
| Median (26 companies) | 8.2% | 6.7% | 4.3% | 6.9% | 3.1% |
|---|
| China State Construction International Holdings Ltd ($3311) | 8.1% | 9.2% | 10.8% | 11.8% | 12.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| PYI Corp Ltd ($498) | 6.6% | 6.6% | 3.7% | 4.2% | 24.5% |
| Shun Cheong Holdings ($650) | 6.3% | 7.2% | 16.4% | 8.0% | 23.9% |
| KFM Kingdom Holdings Ltd ($3816) | 4.2% | 6.5% | 4.6% | 11.5% | 14.9% |
| China Resources and Transportation Group Ltd ($269) | 144.7% | 474.4% | 19.2% | 1.1% | 14.0% |
| CNQC International Holdings Ltd ($1240) | 71.4% | 29.8% | 13.6% | 12.3% | 10.5% |
| |
|---|
| Median (26 companies) | 3.5% | 4.4% | 2.4% | 3.9% | 2.2% |
|---|
| China State Construction International Holdings Ltd ($3311) | 3.8% | 3.2% | 1.8% | 1.4% | 1.5% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | | 98.3% | 54.9% |
| CNQC International Holdings Ltd ($1240) | | 23.1% | 12.2% | 22.3% | 40.4% |
| China Saite Group Co Ltd ($153) | | 46.3% | 64.0% | 53.2% | 35.3% |
| Tysan Holdings Ltd ($687) | 20.1% | 16.1% | 4.1% | 10.6% | 14.0% |
| China Aluminum International Engineering Corp Ltd ($2068) | 34.1% | 28.4% | 23.0% | 6.1% | 6.7% |
| |
|---|
| Median (27 companies) | 4.7% | 5.8% | 3.6% | 2.3% | 1.7% |
|---|
| China State Construction International Holdings Ltd ($3311) | 9.9% | 9.9% | 10.2% | 10.7% | 12.2% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | | 66.7x |
| CNC Holdings Ltd ($8356) | 0.1x | -0.7x | | 22.0x | 21.9x |
| Deson Development International Holdings ($262) | 1.7x | 3.1x | 3.8x | 4.9x | 13.7x |
| Chun Wo Development Holdings Ltd ($711) | | | 14.3x | 8.1x | 12.6x |
| Hsin Chong Construction Group Ltd ($404) | -1.1x | 4.3x | 1.8x | 8.0x | 10.2x |
| |
|---|
| Median (20 companies) | 1.0x | 0.8x | 1.8x | 1.5x | 3.3x |
|---|
| China State Construction International Holdings Ltd ($3311) | 1.7x | 0.5x | 1.3x | 1.4x | 1.7x |
