CNC Holdings Ltd Debt dropped on 56.8% in 2015 while Net Debt / EBITDA surged on 2.3x from 21.9x to 24.3x
01/06/2015 • About CNC Holdings Ltd (
$8356) • By InTwits
CNC Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNC Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is -13.5%
- EBITDA Margin is quite volatile: 2.2% in FY2015, 8.1% in FY2014, 9.4% in FY2013, -1.7% in FY2012, 9.3% in FY2011
- CNC Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's in pair with industry average of 6.5%.
- CAPEX is quite volatile: 7.2 in FY2015, 23.3 in FY2014, 18.8 in FY2013, 10.4 in FY2012, 4.6 in FY2011
- The company has unprofitable business model: ROIC is at -13.5%
- It operates with high leverage: Net Debt/EBITDA is 24.3x while industry average is 4.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNC Holdings Ltd ($8356) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 184.3 | 219.0 | 293.0 | 324.3 | 369.6 | 14.0% |
| Gross Profit | 22.2 | 21.8 | 44.8 | 50.1 | 23.1 | -53.9% |
| SG&A | | | 28.0 | 29.8 | 33.3 | 11.9% |
| EBITDA | 17.2 | -3.6 | 27.5 | 26.2 | 8.0 | -69.4% |
| Net Income | 9.7 | -704.9 | -116.2 | -431.3 | -41.7 | -90.3% |
Balance Sheet
|
|---|
| Cash | 16.2 | 10.0 | 36.2 | 20.6 | 62.2 | 201.6% |
| Short Term Debt | 3.5 | 4.9 | 2.8 | 591.2 | 10.9 | -98.2% |
| Long Term Debt | 0.2 | 629.2 | 639.6 | 4.0 | 246.1 | 5,995.6% |
Cash flow
|
|---|
| Capex | 4.6 | 10.4 | 18.8 | 23.3 | 7.2 | -69.0% |
Ratios
|
|---|
| Revenue growth | 23.8% | 18.8% | 33.8% | 10.7% | 14.0% | |
| EBITDA growth | -28.7% | -121.0% | -861.1% | -4.8% | -69.4% | |
| Gross Margin | 12.0% | 9.9% | 15.3% | 15.4% | 6.2% | -9.2% |
| EBITDA Margin | 9.3% | -1.7% | 9.4% | 8.1% | 2.2% | -5.9% |
| Net Income Margin | 5.3% | -321.9% | -39.7% | -133.0% | -11.3% | 121.7% |
| SG&A, % of revenue | | | 9.6% | 9.2% | 9.0% | -0.2% |
| CAPEX, % of revenue | 2.5% | 4.7% | 6.4% | 7.2% | 2.0% | -5.2% |
| ROIC | 26.5% | -6.7% | -5.8% | -10.4% | -13.5% | -3.1% |
| ROE | 28.6% | -1,212.5% | | | | 0.0% |
| Net Debt/EBITDA | -0.7x | | 22.0x | 21.9x | 24.3x | 2.3x |
Revenue and profitability
The company's Revenue surged on 14.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 24.4 pp from 11.7% to 36.1% in 2015.
Gross Margin decreased on 9.2 pp from 15.4% to 6.2% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign jumped on 122 pp from -133% to -11.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.0% in FY2015. CNC Holdings Ltd's CAPEX/Revenue decreased on 2.8 pp from 4.7% in FY2012 to 2.0% in FY2015. Average CAPEX/Revenue for the last three years was 5.2%.To fuel this fast growth CNC Holdings Ltd invested a large share of EBITDA (90.1%) to CAPEX.
Leverage (Debt)
Company's Net Debt / EBITDA is 24.3x and Debt / EBITDA is 32.0x. Net Debt / EBITDA surged on 2.3x from 21.9x to 24.3x in FY2015. Debt dropped on 56.8% in FY2015 while cash jumped on 202% in FY2015.
Appendix 1: Peers in Engineering&Construction
Below you can find CNC Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| Richly Field China Development Ltd ($313) | | | -45.0% | 464.2% | |
| Junefield Department Store Group Ltd ($758) | 22.9% | -20.3% | -24.9% | 126.6% | |
| CNQC International Holdings Ltd ($1240) | 401.9% | 21.6% | 91.0% | 103.7% | |
| Wison Engineering Services Co Ltd ($2236) | 1.2% | -2.9% | -24.9% | 90.3% | |
| China Resources and Transportation Group Ltd ($269) | -37.0% | 939.8% | 3,196.3% | 87.9% | |
| |
|---|
| Median (37 companies) | 12.5% | 9.2% | 20.8% | 11.7% | |
|---|
| CNC Holdings Ltd ($8356) | | 18.8% | 33.8% | 10.7% | 14.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | 2.2% | 43.6% | 65.6% | 64.0% | |
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | |
| China Saite Group Co Ltd ($153) | 29.4% | 32.1% | 33.7% | 29.8% | |
| Chevalier International Holdings Ltd ($25) | 18.1% | 24.3% | 26.3% | 25.9% | |
| |
|---|
| Median (32 companies) | 11.0% | 12.8% | 11.6% | 11.6% | |
|---|
| CNC Holdings Ltd ($8356) | 12.0% | 9.9% | 15.3% | 15.4% | 6.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | -0.5% | 46.2% | 73.8% | 77.1% | |
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | |
| China Saite Group Co Ltd ($153) | 27.8% | 30.2% | 31.3% | 27.6% | |
| |
|---|
| Median (38 companies) | 7.8% | 8.7% | 6.9% | 5.6% | |
|---|
| CNC Holdings Ltd ($8356) | 9.3% | -1.7% | 9.4% | 8.1% | 2.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | |
| Shun Cheong Holdings ($650) | 7.2% | 16.4% | 8.0% | 23.9% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 6.1% | 4.2% | 7.7% | 20.2% | |
| KFM Kingdom Holdings Ltd ($3816) | 6.5% | 4.6% | 11.5% | 14.9% | |
| |
|---|
| Median (38 companies) | 4.5% | 2.5% | 2.6% | 1.7% | |
|---|
| CNC Holdings Ltd ($8356) | 2.5% | 4.7% | 6.4% | 7.2% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| China Machinery Engineering Corp ($1829) | 35.5% | 24.9% | 20.4% | 16.0% | |
| Tysan Holdings Ltd ($687) | 16.1% | 4.1% | 10.6% | 14.0% | |
| |
|---|
| Median (39 companies) | 6.9% | 5.4% | 5.0% | 3.4% | |
|---|
| CNC Holdings Ltd ($8356) | 26.5% | -6.7% | -5.8% | -10.4% | -13.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | |
| Deson Development International Holdings ($262) | 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) | 4.3x | 1.8x | 8.0x | 10.2x | |
| Huayu Expressway Group Ltd ($1823) | | 20.6x | 10.8x | 9.4x | |
| |
|---|
| Median (31 companies) | 0.8x | 1.8x | 1.9x | 2.6x | |
|---|
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
