Looking for growth? Don't miss China Hongqiao Group Ltd with its track record of fast growth
05/04/2015 • About China Hongqiao Group Ltd (
$1378) • By InTwits
Pay attention to China Hongqiao Group Ltd as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
China Hongqiao Group Ltd showed fast growth in the last financial year. The company's revenue surged on 22.7% in FY2014. The growth also happened in EBITDA of 19.8% for the same period.
In the last 3 years the company showed fast revenue growth of 15.2% from 2011 to 2014 annualy. EBITDA surged on 10.5% from 2011 to 2014 annualy.
China Hongqiao Group Ltd ($1378) financials for the last 5 years
| mln. CNY | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 15,132 | 23,626 | 24,805 | 29,404 | 36,086 |
|---|
| Revenue growth, % | | 56.1% | 5.0% | 18.5% | 22.7% |
|---|
| Gross margin, % | 37.9% | 34.6% | 32.3% | 27.7% | 25.8% |
|---|
| SG&A, % | 0.872% | 0.893% | 1.47% | 1.70% | 1.95% |
|---|
| EBITDA | 6,413 | 9,140 | 9,395 | 10,287 | 12,322 |
|---|
| EBITDA growth, % | | 42.5% | 2.8% | 9.5% | 19.8% |
|---|
| EBITDA margin, % | 42.4% | 38.7% | 37.9% | 35.0% | 34.1% |
|---|
| Net Income | 4,196 | 5,875 | 5,453 | 5,593 | 5,314 |
|---|
| Net Income margin, % | 27.7% | 24.9% | 22.0% | 19.0% | 14.7% |
|---|
| |
| CAPEX | 2,839 | 8,978 | 10,840 | 14,117 | 9,368 |
|---|
| CAPEX/Revenue, % | 18.8% | 38.0% | 43.7% | 48.0% | 26.0% |
|---|
| Debt | 4,034 | 7,192 | 16,319 | 30,490 | 40,006 |
|---|
| Cash | 2,670 | 7,485 | 9,175 | 6,362 | 7,676 |
|---|
| Net Debt/EBITDA | 0.2x | -0.0x | 0.8x | 2.3x | 2.6x |
|---|
| |
| ROIC, % | 74.3% | 44.6% | 24.8% | 17.0% | 14.1% |
|---|
| ROE, % | 80.8% | 45.7% | 26.8% | 22.8% | 18.1% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 35% in FY2013 to 34.1% in FY2014. In the longer period China Hongqiao Group Ltd showed big decline in EBITDA margin of 4.60 pp from 38.7% in 2011 to 34.1% in 2014.
China Hongqiao Group Ltd shows attractive ROIC at 14.1% for the last 12 months which assumes stable development model. Three years ago it was considerably higher at 44.6%. It's average ROIC for the last three years was 18.6%.
Net Income margin dropped on 4.30 pp from 19% to 14.7% in 2014. In the last 3 years China Hongqiao Group Ltd's Net Income margin dropped on 10.2 pp from 24.9% in 2011 to 14.7% in 2014.
China Hongqiao Group Ltd operates at ROE of 18.1%. It's average ROE for the last three years was 22.6%.
Capital expenditures (CAPEX)
To fuel this fast growth China Hongqiao Group Ltd had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 26.0%. China Hongqiao Group Ltd's CAPEX/Revenue dropped on 12.0 pp from 38.0% in 2011 to 26.0% in 2014. It's average CAPEX/Revenue for the last three years was 39.2%.
Leverage (Debt)
China Hongqiao Group Ltd has medium debt level at 2.6x Net Debt/EBITDA to maintain high growth. In the last 3 years the company showed fast leverage growth of 2.66x from -0.03x in 2011 to 2.62x in 2014.
Management team
China Hongqiao Group Ltd is headed by Zhang Bo as a CEO and by Zhang Ruilian as a CFO.
Peers in Mining
Below we provide China Hongqiao Group Ltd benchmarking against other companies in Mining 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 |
|---|
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | | 24.0% | 4.8% | -44.7% | 303.0% |
| Huili Resources Group Ltd ($1303) | | -47.8% | -33.6% | -91.6% | 219.4% |
| North Mining Shares Co Ltd ($433) | | 1.7% | -5.5% | -57.1% | 187.0% |
| China Kingstone Mining Holdings Ltd ($1380) | | 4,275.3% | -94.5% | -55.6% | 155.2% |
| CGN Mining Co Ltd ($1164) | | 13.6% | 230.6% | -35.4% | 44.6% |
| |
|---|
| Median (40 companies) | | 28.4% | 3.8% | 2.4% | -7.3% |
|---|
| China Hongqiao Group Ltd ($1378) | | 56.1% | 5.0% | 18.5% | 22.7% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Sun International Resources Ltd ($8029) | 70.4% | 77.6% | 83.2% | 73.1% | 64.8% |
| China Polymetallic Mining Ltd ($2133) | | 76.9% | 81.8% | 74.2% | 51.8% |
| Hengshi Mining Investments Ltd ($1370) | 45.6% | 54.6% | 32.4% | 55.3% | 50.1% |
| China Kingstone Mining Holdings Ltd ($1380) | 69.4% | 60.1% | 67.1% | 50.7% | 49.8% |
| Kaz Minerals ($847) | 56.2% | 54.6% | 39.7% | 41.1% | 46.1% |
| |
|---|
| Median (40 companies) | 27.8% | 23.0% | 15.2% | 14.8% | 15.6% |
|---|
| China Hongqiao Group Ltd ($1378) | 37.9% | 34.6% | 32.3% | 27.7% | 25.8% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Polymetallic Mining Ltd ($2133) | | -322.0% | 62.8% | 58.5% | 54.1% |
| G-Resources Group Ltd ($1051) | -2,827.0% | | | 54.5% | 53.4% |
| China Gold International Resources Corp Ltd ($2099) | | | 41.7% | 38.3% | 47.3% |
| Hengshi Mining Investments Ltd ($1370) | 37.5% | 45.7% | 22.8% | 52.0% | 45.4% |
| China Molybdenum Co Ltd ($3993) | 35.4% | 31.7% | 24.9% | 22.6% | 41.4% |
| |
|---|
| Median (40 companies) | 7.7% | 5.9% | 4.7% | 8.1% | 5.2% |
|---|
| China Hongqiao Group Ltd ($1378) | 42.4% | 38.7% | 37.9% | 35.0% | 34.1% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Mongolia Energy Corp Ltd ($276) | | | 8,006.5% | 1,061.7% | 30,555.4% |
| Huili Resources Group Ltd ($1303) | 1.6% | 3.9% | 181.0% | 1,508.6% | 279.5% |
| Kaz Minerals ($847) | 22.3% | 19.8% | 36.6% | 136.5% | 168.8% |
| China Gold International Resources Corp Ltd ($2099) | | | 64.7% | 156.1% | 95.6% |
| IRC Ltd ($1029) | 475.7% | 129.7% | 102.1% | 70.6% | 82.5% |
| |
|---|
| Median (40 companies) | 10.5% | 14.3% | 16.7% | 15.7% | 10.3% |
|---|
| China Hongqiao Group Ltd ($1378) | 18.8% | 38.0% | 43.7% | 48.0% | 26.0% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Silver Group Ltd ($815) | 50.9% | 48.0% | 57.6% | 31.6% | 35.8% |
| Hengshi Mining Investments Ltd ($1370) | | 153.0% | 50.1% | 60.1% | 20.7% |
| China Nonferrous Mining Corp Ltd ($1258) | 18.1% | 10.9% | 14.7% | 10.8% | 11.8% |
| Xingfa Aluminium Holdings Ltd ($98) | 6.1% | 3.8% | 7.6% | 8.8% | 11.7% |
| CGN Mining Co Ltd ($1164) | 11.4% | -6.4% | 2.6% | 3.3% | 7.9% |
| |
|---|
| Median (40 companies) | 4.6% | 3.7% | 1.5% | 3.3% | 2.1% |
|---|
| China Hongqiao Group Ltd ($1378) | 74.3% | 44.6% | 24.8% | 17.0% | 14.1% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | -2.3x | 0.9x | 8.4x | 39.4x | 10.3x |
| MMG Ltd ($1208) | 1.9x | -0.0x | 2.1x | 2.0x | 10.2x |
| Midas Holdings Ltd ($1021) | -1.7x | 1.4x | 4.3x | 6.5x | 8.7x |
| Lingbao Gold Co Ltd ($3330) | 2.9x | 3.5x | 5.3x | | 8.3x |
| Xingye Copper International Group Ltd ($505) | 3.4x | 3.8x | 5.3x | 7.5x | 6.7x |
| |
|---|
| Median (23 companies) | 0.6x | 0.8x | 1.3x | 1.8x | 4.4x |
|---|
| China Hongqiao Group Ltd ($1378) | 0.2x | -0.0x | 0.8x | 2.3x | 2.6x |
