China Resources Cement Holdings Ltd Net Income dropped on 75.9% in 2015 and Revenue dropped on 18.0%
11/03/2016 • About China Resources Cement Holdings Ltd (
$1313) • By InTwits
China Resources Cement Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Resources Cement Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.1%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: 2,959 in 2015, 3,512 in 2014, 3,341 in 2013, 3,663 in 2012, 7,601 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Resources Cement Holdings Ltd ($1313) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 23,240 | 25,345 | 29,341 | 32,669 | 26,779 | -18.0% |
| Gross Profit | 7,224 | 6,100 | 8,360 | 10,225 | 6,417 | -37.2% |
| SG&A | 2,553 | 3,031 | 4,361 | 4,493 | 4,196 | -6.6% |
| EBITDA | 6,245 | 5,176 | 6,216 | 8,262 | 4,679 | -43.4% |
| Net Income | 4,179 | 2,324 | 3,338 | 4,206 | 1,015 | -75.9% |
Balance Sheet
|
|---|
| Cash | 3,738 | 3,562 | 2,822 | 4,148 | 1,938 | -53.3% |
| Short Term Debt | 11,340 | 8,938 | 6,171 | 4,729 | 5,227 | 10.5% |
| Long Term Debt | 10,077 | 13,283 | 14,300 | 15,574 | 13,725 | -11.9% |
Cash flow
|
|---|
| Capex | 7,601 | 3,663 | 3,341 | 3,512 | 2,959 | -15.7% |
Ratios
|
|---|
| Revenue growth | 64.3% | 9.1% | 15.8% | 11.3% | -18.0% | |
| EBITDA growth | 92.7% | -17.1% | 20.1% | 32.9% | -43.4% | |
| Gross Margin | 31.1% | 24.1% | 28.5% | 31.3% | 24.0% | -7.3% |
| EBITDA Margin | 26.9% | 20.4% | 21.2% | 25.3% | 17.5% | -7.8% |
| Net Income Margin | 18.0% | 9.2% | 11.4% | 12.9% | 3.8% | -9.1% |
| SG&A, % of revenue | 11.0% | 12.0% | 14.9% | 13.8% | 15.7% | 1.9% |
| CAPEX, % of revenue | 32.7% | 14.5% | 11.4% | 10.8% | 11.1% | 0.3% |
| ROIC | 14.0% | 8.0% | 9.6% | 13.0% | 5.5% | -7.5% |
| ROE | 24.5% | 11.4% | 14.5% | 15.9% | 3.7% | -12.2% |
| Net Debt/EBITDA | 2.8x | 3.6x | 2.8x | 2.0x | 3.6x | 1.7x |
Revenue and profitability
The company's Revenue dropped on 18.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.8 pp from 25.3% to 17.5% in 2015.
Gross Margin decreased on 7.3 pp from 31.3% to 24.0% in 2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 13.8% to 15.7% in 2015.
Net Income marign decreased on 9.1 pp from 12.9% to 3.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 11.1%. CAPEX/Revenue decreased on 3.4 pp from 14.5% in 2012 to 11.1% in 2015. For the last three years the average CAPEX/Revenue was 11.1%.The company invested a big chunk of EBITDA (63.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.50%) and ROE (3.71%). ROIC decreased on 7.5 pp from 13.0% to 5.5% in 2015. ROE dropped on 12.2 pp from 15.9% to 3.7% in 2015.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA surged on 1.7x from 2.0x to 3.6x in 2015. Debt decreased on 6.7% in 2015 while cash dropped on 53.3% in 2015.
Appendix 1: Peers in Building Materials
Below you can find China Resources Cement Holdings Ltd benchmarking vs. other companies in Building Materials 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 |
|---|
| Summit Ascent Holdings Ltd ($102) | -18.8% | -86.4% | -19.6% | 177.1% | |
| Pacific Plywood Hldg Ltd ($767) | | -34.9% | -14.5% | 119.5% | |
| Luoyang Glass Co Ltd ($1108) | -21.4% | -40.3% | -32.3% | 76.2% | |
| Prosperity International Holdings HK Ltd ($803) | | -23.9% | -43.3% | 55.2% | -34.4% |
| China Singyes Solar Technologies Holdings Ltd ($750) | 35.0% | 28.7% | 34.0% | 20.7% | |
| |
|---|
| Median (24 companies) | 31.5% | -3.5% | 9.6% | 5.1% | -7.7% |
|---|
| China Resources Cement Holdings Ltd ($1313) | | 9.1% | 15.8% | 11.3% | -18.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 95.0% | 91.4% | 82.0% | 97.2% | |
| Dongpeng Holdings Co Ltd ($3386) | 28.7% | 35.6% | 37.1% | 38.5% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 37.6% | 37.2% | 36.9% | 37.0% | |
| Anhui Conch Cement Co Ltd ($914) | 39.4% | 27.3% | 32.5% | 33.2% | |
| TCC International Holdings Ltd ($1136) | 25.6% | 18.6% | 27.5% | 30.8% | |
| |
|---|
| Median (24 companies) | 26.0% | 20.0% | 22.0% | 20.8% | 19.1% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 31.1% | 24.1% | 28.5% | 31.3% | 24.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 53.6% | 12.6% | -19.8% | 50.5% | |
| Anhui Conch Cement Co Ltd ($914) | 38.8% | 27.1% | 31.1% | 32.1% | |
| TCC International Holdings Ltd ($1136) | 26.5% | 19.2% | 26.1% | 29.0% | |
| Asia Cement China Holdings Corp ($743) | 30.3% | 20.6% | 24.9% | 27.0% | |
| China Tianrui Group Cement Co Ltd ($1252) | 32.4% | 28.5% | 23.7% | 26.7% | |
| |
|---|
| Median (24 companies) | 18.3% | 15.1% | 16.9% | 17.4% | -2.6% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 26.9% | 20.4% | 21.2% | 25.3% | 17.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Singyes Solar Technologies Holdings Ltd ($750) | 40.4% | 11.9% | 32.1% | 23.6% | |
| West China Cement Ltd ($2233) | 54.8% | 17.2% | 13.9% | 15.9% | |
| China Glass Holdings Ltd ($3300) | 37.2% | 19.6% | 12.5% | 12.4% | |
| China Shanshui Cement Group Ltd ($691) | 13.5% | 18.9% | 21.1% | 12.1% | |
| China Lesso Group Holdings Ltd ($2128) | 12.0% | 13.6% | 9.1% | 11.8% | |
| |
|---|
| Median (24 companies) | 6.3% | 9.7% | 8.3% | 5.4% | 6.0% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 32.7% | 14.5% | 11.4% | 10.8% | 11.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dongpeng Holdings Co Ltd ($3386) | 49.7% | 37.1% | 35.8% | 27.2% | |
| Anhui Conch Cement Co Ltd ($914) | 27.2% | 12.7% | 17.5% | 18.4% | |
| China Lesso Group Holdings Ltd ($2128) | 26.8% | 20.5% | 19.4% | 18.2% | |
| China Wood Optimization Holding Ltd ($8099) | | 33.5% | 27.3% | 17.7% | 17.7% |
| China Singyes Solar Technologies Holdings Ltd ($750) | 21.1% | 18.6% | 19.9% | 16.0% | |
| |
|---|
| Median (24 companies) | 12.1% | 5.0% | 6.9% | 4.8% | -2.7% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 14.0% | 8.0% | 9.6% | 13.0% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sustainable Forest Holdings Ltd ($723) | 0.9x | | | 9.6x | |
| China National Building Material Co Ltd ($3323) | 3.9x | 6.7x | 6.8x | 6.3x | |
| BBMG Corp ($2009) | 4.4x | 4.6x | 5.0x | 6.1x | |
| China Tianrui Group Cement Co Ltd ($1252) | 3.0x | 4.2x | 5.1x | 5.2x | |
| China Shanshui Cement Group Ltd ($691) | 1.8x | 3.0x | 4.1x | 4.8x | |
| |
|---|
| Median (20 companies) | 0.9x | 2.4x | 1.1x | 1.9x | -0.3x |
|---|
| China Resources Cement Holdings Ltd ($1313) | 2.8x | 3.6x | 2.8x | 2.0x | 3.6x |
