Midas Holdings Ltd CAPEX dropped on 24.2% in 2015 while Revenue surged on 14.7%
29/02/2016 • About Midas Holdings Ltd (
$1021) • By InTwits
Midas Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Midas Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 53.2%. At the same time it's in pair with industry average of 71.2%.
- CAPEX is quite volatile: 18.9 in FY2015, 20.5 in FY2014, 79.6 in FY2013, 247 in FY2012, 272 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.5%
- It operates with high leverage: Net Debt/EBITDA is 8.0x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Midas Holdings Ltd ($1021) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,081 | 870 | 1,148 | 1,318 | 1,512 | 14.7% |
| Gross Profit | 362 | 251 | 281 | 350 | 407 | 16.1% |
| SG&A | | 140 | 172 | 209 | 246 | 17.8% |
| EBITDA | 331 | 239 | 255 | 312 | 332 | 6.4% |
| Net Income | 187 | 28 | 48 | 56 | 57 | 1.5% |
Balance Sheet
|
|---|
| Cash | 661 | 547 | 1,046 | 1,210 | 1,162 | -3.9% |
| Short Term Debt | 925 | 1,105 | 2,197 | 1,787 | 2,073 | 16.0% |
| Long Term Debt | 183 | 473 | 516 | 2,131 | 1,750 | -17.9% |
Cash flow
|
|---|
| Capex | 716 | 401 | 862 | 624 | 473 | -24.2% |
Ratios
|
|---|
| Revenue growth | 4.8% | -19.5% | 32.0% | 14.8% | 14.7% | |
| EBITDA growth | 6.6% | -28.0% | 6.7% | 22.6% | 6.4% | |
| Gross Margin | 33.5% | 28.9% | 24.5% | 26.6% | 26.9% | 0.3% |
| EBITDA Margin | 30.6% | 27.4% | 22.2% | 23.7% | 22.0% | -1.7% |
| Net Income Margin | 17.3% | 3.2% | 4.2% | 4.3% | 3.8% | -0.5% |
| SG&A, % of revenue | | 16.1% | 15.0% | 15.9% | 16.3% | 0.4% |
| CAPEX, % of revenue | 66.2% | 46.2% | 75.1% | 47.3% | 31.3% | -16.1% |
| ROIC | 6.5% | 2.6% | 2.2% | 2.3% | 2.5% | 0.2% |
| ROE | 6.4% | 0.9% | 1.6% | 1.9% | 1.9% | 0.0% |
| Net Debt/EBITDA | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x | -0.7x |
Revenue and profitability
Midas Holdings Ltd's Revenue surged on 14.7% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.5 pp from 26.1% to 22.5% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Midas Holdings Ltd's CAPEX/Revenue was 31.3% in 2015. The company's CAPEX/Revenue dropped on 14.9 pp from 46.2% in 2012 to 31.3% in 2015. It's average CAPEX/Revenue for the last three years was 51.3%.The company has spent a lot to CAPEX (142% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (2.48%) and ROE (1.89%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.0x and Debt / EBITDA is 11.5x. Net Debt / EBITDA dropped on 0.7x from 8.7x to 8.0x in 2015. Debt decreased on 2.4% in 2015 while cash decreased on 3.9% in 2015.
Appendix 1: Peers in Mining
Below you can find Midas Holdings Ltd benchmarking vs. other companies in Mining 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 |
|---|
| 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% | |
| Ding He Mining Holdings Ltd ($705) | 31.6% | 29.9% | 43.8% | 89.8% | |
| |
|---|
| Median (47 companies) | 31.6% | 5.4% | 0.6% | -6.5% | -7.5% |
|---|
| Midas Holdings Ltd ($1021) | | -19.5% | 32.0% | 14.8% | 14.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| China Polymetallic Mining Ltd ($2133) | 76.9% | 81.8% | 74.2% | 51.8% | 38.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 64.7% | 63.9% | 54.9% | 51.2% | |
| Hengshi Mining Investments Ltd ($1370) | 54.6% | 32.4% | 55.3% | 50.1% | |
| |
|---|
| Median (47 companies) | 19.1% | 13.4% | 14.0% | 15.3% | 35.5% |
|---|
| Midas Holdings Ltd ($1021) | 33.5% | 28.9% | 24.5% | 26.6% | 26.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | |
| China Polymetallic Mining Ltd ($2133) | -322.0% | 62.8% | 58.5% | 54.1% | 2.8% |
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | |
| China Gold International Resources Corp Ltd ($2099) | | 41.7% | 38.3% | 47.3% | 33.7% |
| Hengshi Mining Investments Ltd ($1370) | 45.7% | 22.8% | 52.0% | 45.4% | |
| |
|---|
| Median (47 companies) | 5.9% | 4.7% | 7.5% | 4.4% | 2.8% |
|---|
| Midas Holdings Ltd ($1021) | 30.6% | 27.4% | 22.2% | 23.7% | 22.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Huili Resources Group Ltd ($1303) | 3.9% | 181.0% | 1,508.6% | 279.5% | |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| China Gold International Resources Corp Ltd ($2099) | | 64.7% | 156.1% | 95.6% | 81.4% |
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | |
| |
|---|
| Median (47 companies) | 14.3% | 17.0% | 15.3% | 11.1% | 11.0% |
|---|
| Midas Holdings Ltd ($1021) | 66.2% | 46.2% | 75.1% | 47.3% | 31.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Silver Group Ltd ($815) | 48.0% | 57.6% | 31.6% | 35.8% | |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | |
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| |
|---|
| Median (48 companies) | 2.9% | 1.5% | 3.1% | 0.7% | -1.1% |
|---|
| Midas Holdings Ltd ($1021) | 6.5% | 2.6% | 2.2% | 2.3% | 2.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 0.9x | 8.4x | 39.4x | 10.3x | |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Lingbao Gold Co Ltd ($3330) | 3.5x | 5.3x | | 8.3x | |
| Xingye Copper International Group Ltd ($505) | 3.8x | 5.3x | 7.5x | 6.7x | |
| |
|---|
| Median (26 companies) | 0.9x | 1.5x | 1.9x | 3.8x | -0.0x |
|---|
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x |
