CT Environmental Group Ltd demonstrated fast growth in recent years. Will the growth continue?
07/04/2015 • About CT Environmental Group Ltd (
$1363) • By InTwits
CT Environmental Group Ltd is an attractive growth stock in Environmental Control industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
CT Environmental Group Ltd showed growth in the last financial year. CT Environmental Group Ltd's revenue surged on 113% in FY2014. The growth also happened in EBITDA of 99.0% for the same period.
If we look for the longer period the company showed fast revenue growth of 28.7% from 2011 to 2014 annualy. EBITDA surged on 33.8% from 2011 to 2014 annualy.
CT Environmental Group Ltd ($1363) financials for the last 5 years
| mln. | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 315 | 384 | 312 | 384 | 818 |
|---|
| Revenue growth, % | | 21.9% | -18.7% | 23.1% | 112.9% |
|---|
| Gross margin, % | 51.7% | 57.7% | 65.8% | 63.1% | 56.4% |
|---|
| SG&A, % | 8.32% | 8.42% | 5.34% | 8.57% | 8.09% |
|---|
| EBITDA | 147 | 200 | 199 | 241 | 480 |
|---|
| EBITDA growth, % | | 36.0% | -0.8% | 21.5% | 99.0% |
|---|
| EBITDA margin, % | 46.8% | 52.2% | 63.6% | 62.8% | 58.7% |
|---|
| Net Income | 105 | 137 | 144 | 178 | 336 |
|---|
| Net Income margin, % | 33.4% | 35.6% | 46.2% | 46.3% | 41.1% |
|---|
| |
| CAPEX | 13 | 122 | 203 | 104 | 421 |
|---|
| CAPEX/Revenue, % | 3.99% | 31.8% | 65.0% | 27.1% | 51.4% |
|---|
| Debt | 271 | 393 | 482 | 431 | 1,041 |
|---|
| Cash | 14 | 42 | 8 | 308 | 117 |
|---|
| Net Debt/EBITDA | 1.7x | 1.8x | 2.4x | 0.5x | 1.9x |
|---|
| |
| ROIC, % | 32.2% | 34.4% | 25.9% | 20.5% | 20.8% |
|---|
| ROE, % | 65.5% | 71.2% | 58.6% | 29.6% | 28.6% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 62.8% in FY2013 to 58.7% in FY2014. In the longer period the company showed fast EBITDA margin growth of 6.50 pp from 52.2% in 2011 to 58.7% in 2014.
We call CT Environmental Group Ltd an attractive growth stock as together with the growth it delivers high ROIC at 20.8%. Three years ago it was considerably higher at 34.4%. It's average level of ROIC for the last three years was 22.4%.
Net Income margin dropped on 5.20 pp from 46.3% to 41.1% in 2014. If we look for the longer period the company's Net Income margin surged on 5.50 pp from 35.6% in 2011 to 41.1% in 2014.
CT Environmental Group Ltd operates at ROE of 28.6%. For the last three years the average ROE was 38.9%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.CT Environmental Group Ltd's CAPEX/Revenue was 51.4% in FY2014. CT Environmental Group Ltd's CAPEX/Revenue surged on 19.6 pp from 31.8% in 2011 to 51.4% in 2014. It's average level of CAPEX/Revenue for the last three years was 47.8%.
Leverage (Debt)
CT Environmental Group Ltd has medium debt level at 1.9x Net Debt/EBITDA to maintain high growth. If we look for the longer period leverage increased on 0.17x from 1.75x in 2011 to 1.93x in 2014.
Peers in Environmental Control
Below you can find CT Environmental Group Ltd benchmarking vs. other companies in Environmental Control 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 |
|---|
| China Environmental Technology Holdings Ltd ($646) | | -58.7% | 138.4% | -89.9% | 509.7% |
| Capital Environment Holdings Ltd ($3989) | | -89.7% | -12.6% | 1,503.8% | 241.2% |
| Asia Energy Logistics Group Ltd ($351) | | | | | 92.2% |
| Green Energy Group Ltd ($979) | | 57.8% | -75.7% | 92.3% | 43.5% |
| New Universe International Group Ltd ($8068) | | -17.6% | 45.7% | 17.6% | 33.0% |
| |
|---|
| Median (18 companies) | | 9.8% | -7.4% | 6.0% | 2.4% |
|---|
| CT Environmental Group Ltd ($1363) | | 21.9% | -18.7% | 23.1% | 112.9% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| EverChina International Holdings Co Ltd ($202) | 51.6% | 40.2% | 51.8% | 53.4% | 95.3% |
| China Environmental Resources Group Ltd ($1130) | 33.0% | 12.3% | 17.2% | 11.3% | 73.7% |
| China Everbright International Ltd ($257) | 39.1% | 41.3% | 49.4% | 44.7% | 46.7% |
| New Universe International Group Ltd ($8068) | 32.6% | 51.9% | 47.9% | 47.7% | 45.0% |
| China Water Affairs Group Ltd ($855) | 42.0% | 42.7% | 44.0% | 43.1% | 41.8% |
| |
|---|
| Median (17 companies) | 34.5% | 34.1% | 20.4% | 30.1% | 27.1% |
|---|
| CT Environmental Group Ltd ($1363) | 51.7% | 57.7% | 65.8% | 63.1% | 56.4% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 53.9% | 55.9% | 57.5% | 56.6% | 57.8% |
| China Everbright International Ltd ($257) | 36.1% | 37.3% | 44.6% | 40.7% | 43.6% |
| New Universe International Group Ltd ($8068) | 15.4% | 42.0% | 40.2% | 37.8% | 39.3% |
| China Water Affairs Group Ltd ($855) | 35.3% | 38.8% | 38.2% | 38.1% | 37.1% |
| Dongjiang Environmental Co Ltd ($895) | 22.3% | 21.7% | 25.4% | 19.2% | 23.4% |
| |
|---|
| Median (18 companies) | 16.2% | 4.9% | 2.1% | -0.6% | -7.9% |
|---|
| CT Environmental Group Ltd ($1363) | 46.8% | 52.2% | 63.6% | 62.8% | 58.7% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| New Universe International Group Ltd ($8068) | 18.6% | 103.4% | 16.4% | 16.6% | 44.9% |
| Green Energy Group Ltd ($979) | 299.5% | 7.5% | 169.0% | 270.8% | 41.9% |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 29.7% | 25.4% | 13.2% | 10.6% | 41.7% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 60.8% | 42.2% | 43.1% | 46.5% | 38.6% |
| China Water Affairs Group Ltd ($855) | 21.4% | 31.4% | 40.5% | 39.1% | 30.1% |
| |
|---|
| Median (18 companies) | 16.0% | 11.2% | 14.8% | 15.8% | 12.7% |
|---|
| CT Environmental Group Ltd ($1363) | 4.0% | 31.8% | 65.0% | 27.1% | 51.4% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Everbright International Ltd ($257) | 11.2% | 11.1% | 10.4% | 11.2% | 10.5% |
| Dongjiang Environmental Co Ltd ($895) | 14.4% | 17.0% | 14.3% | 7.4% | 9.4% |
| New Universe International Group Ltd ($8068) | 3.5% | 5.8% | 6.3% | 6.8% | 8.9% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 7.2% | 7.4% | 7.1% | 6.8% | 7.8% |
| China Water Affairs Group Ltd ($855) | 6.2% | 5.6% | 6.3% | 6.8% | 7.0% |
| |
|---|
| Median (18 companies) | 4.6% | 1.7% | -1.7% | -1.4% | -3.3% |
|---|
| CT Environmental Group Ltd ($1363) | 32.2% | 34.4% | 25.9% | 20.5% | 20.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| China Water Affairs Group Ltd ($855) | 3.9x | 2.8x | 2.6x | 2.7x | 3.2x |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 4.6x | 4.1x | 4.2x | 3.1x | 2.9x |
| China Everbright International Ltd ($257) | 2.4x | 2.8x | 2.1x | 0.5x | 1.5x |
| Dongjiang Environmental Co Ltd ($895) | 1.9x | 1.0x | -1.7x | -1.5x | 0.9x |
| New Universe International Group Ltd ($8068) | -3.2x | 0.8x | 0.8x | -0.2x | -0.3x |
| |
|---|
| Median (8 companies) | -0.7x | 1.2x | 2.2x | -0.2x | 0.3x |
|---|
| CT Environmental Group Ltd ($1363) | 1.7x | 1.8x | 2.4x | 0.5x | 1.9x |
