MTR Corp Ltd CAPEX surged on 75.3% in 2015 and Revenue increased on 3.8%
11/03/2016 • About MTR Corp Ltd (
$66) • By InTwits
MTR Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- MTR Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 35.7%. At the same time it's a lot of higher than industry average of 20.8%.
- CAPEX is quite volatile: 548 in 2015, 1,287 in 2014, 1,797 in 2013, 1,975 in 2012, 1,325 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
MTR Corp Ltd ($66) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 33,423 | 35,739 | 38,707 | 40,156 | 41,701 | 3.8% |
| SG&A | 429 | 479 | 515 | 640 | 610 | -4.7% |
| EBITDA | 16,411 | 15,250 | 14,548 | 18,169 | 17,366 | -4.4% |
| Net Income | 15,556 | 13,375 | 13,025 | 15,606 | 12,994 | -16.7% |
Balance Sheet
|
|---|
| Cash | 3,427 | 5,105 | 7,209 | 15,413 | 6,227 | -59.6% |
| Short Term Debt | 0 | 355 | 47 | 546 | 1,649 | 202.0% |
| Long Term Debt | 34,046 | 34,069 | 35,257 | 30,699 | 29,836 | -2.8% |
Cash flow
|
|---|
| Capex | 10,043 | 11,125 | 13,356 | 12,359 | 21,670 | 75.3% |
Ratios
|
|---|
| Revenue growth | 13.2% | 6.9% | 8.3% | 3.7% | 3.8% | |
| EBITDA growth | 10.1% | -7.1% | -4.6% | 24.9% | -4.4% | |
| EBITDA Margin | 49.1% | 42.7% | 37.6% | 45.2% | 41.6% | -3.6% |
| Net Income Margin | 46.5% | 37.4% | 33.7% | 38.9% | 31.2% | -7.7% |
| SG&A, % of revenue | 1.3% | 1.3% | 1.3% | 1.6% | 1.5% | -0.1% |
| CAPEX, % of revenue | 30.0% | 31.1% | 34.5% | 30.8% | 52.0% | 21.2% |
| ROIC | 7.7% | 6.6% | 5.8% | 7.2% | 6.4% | -0.8% |
| ROE | 12.4% | 9.6% | 8.8% | 9.9% | 7.8% | -2.1% |
| Net Debt/EBITDA | 1.9x | 1.9x | 1.9x | 0.9x | 1.5x | 0.6x |
Revenue and profitability
MTR Corp Ltd's Revenue increased on 3.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.1 pp from 8.1% to -2.0% in 2015.
SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 7.7 pp from 38.9% to 31.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
MTR Corp Ltd's CAPEX/Revenue was 52.0% in 2015. CAPEX/Revenue surged on 20.8 pp from 31.1% in 2012 to 52.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 39.1%.The company maintained rich investment policy and has spent a lot to CAPEX (125% of EBITDA).
Return on investment
The company operates at low ROIC (6.43%) and ROE (7.80%). ROIC decreased slightly on 0.82 pp from 7.2% to 6.4% in 2015. ROE decreased on 2.1 pp from 9.9% to 7.8% in 2015.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 0.9x to 1.5x in 2015. Debt increased slightly on 0.77% in 2015 while cash dropped on 59.6% in 2015.
Management team
Leong Lincoln is a the company's CEO. Leong Lincoln has spent 4 years at the company.
Appendix 1: Peers in Transportation
Below we provide MTR Corp Ltd benchmarking against other companies in Transportation 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Frontier Services Group Ltd ($500) | -90.5% | -10.8% | -49.9% | 1,021.1% | |
| China Best Group Holding Ltd ($370) | 333.1% | 202.4% | -53.6% | 459.4% | |
| Guangdong Yueyun Transportation Co Ltd-H ($3399) | 11.7% | -4.2% | -5.9% | 60.4% | |
| Tianjin Port Development Holdings Ltd ($3382) | 9.8% | 8.7% | 24.9% | 51.9% | |
| CIG Yangtze Ports PLC ($8233) | | 17.9% | 30.6% | 23.5% | 0.1% |
| |
|---|
| Median (28 companies) | 9.4% | 5.4% | 4.0% | 5.6% | -6.7% |
|---|
| MTR Corp Ltd ($66) | | 6.9% | 8.3% | 3.7% | 3.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CIG Yangtze Ports PLC ($8233) | 51.0% | 51.3% | 44.8% | 46.6% | 48.7% |
| Frontier Services Group Ltd ($500) | 80.7% | 83.8% | 65.9% | 44.8% | |
| Qinhuangdao Port Co Ltd ($3369) | 43.2% | 43.1% | 42.4% | 43.3% | |
| Chu Kong Shipping Enterprise Group Co Ltd ($560) | 21.5% | 23.1% | 25.1% | 24.1% | |
| Kwoon Chung Bus Holdings Ltd ($306) | 17.6% | 18.9% | 20.4% | 22.7% | 26.8% |
| |
|---|
| Median (26 companies) | 17.6% | 12.7% | 10.6% | 10.2% | 7.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Qinhuangdao Port Co Ltd ($3369) | 45.3% | 46.0% | 44.6% | 46.5% | |
| CIG Yangtze Ports PLC ($8233) | 29.9% | 30.2% | 27.6% | 38.5% | 39.5% |
| Great Harvest Maeta Group Holdings Ltd ($3683) | 61.3% | 56.3% | 18.7% | 32.6% | -8.5% |
| China Shipping Development Co Ltd ($1138) | 24.7% | 12.5% | 3.0% | 24.7% | |
| Kwoon Chung Bus Holdings Ltd ($306) | 15.4% | 13.3% | 16.1% | 20.7% | 26.1% |
| |
|---|
| Median (29 companies) | 15.8% | 9.9% | 7.4% | 7.8% | 9.5% |
|---|
| MTR Corp Ltd ($66) | 49.1% | 42.7% | 37.6% | 45.2% | 41.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Century Investment Holdings Ltd ($2322) | | 0.0% | | 296.6% | 1.4% |
| Frontier Services Group Ltd ($500) | 5.4% | 6.3% | 3.6% | 63.3% | |
| China Shipping Development Co Ltd ($1138) | 68.9% | 55.8% | 34.0% | 54.9% | |
| Courage Marine Group Ltd ($1145) | 78.9% | 235.0% | 37.7% | 50.4% | 9.2% |
| Qinhuangdao Port Co Ltd ($3369) | 47.2% | 57.9% | 35.8% | 46.3% | |
| |
|---|
| Median (29 companies) | 11.1% | 7.9% | 9.0% | 7.4% | 11.6% |
|---|
| MTR Corp Ltd ($66) | 30.0% | 31.1% | 34.5% | 30.8% | 52.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Changan Minsheng APLL Logistics Co Ltd ($1292) | 34.2% | 21.1% | 20.9% | 19.1% | |
| ASR Logistics Holdings Ltd ($1803) | 79.6% | 54.7% | 38.9% | 13.4% | |
| CIG Yangtze Ports PLC ($8233) | 4.3% | 4.9% | 5.7% | 11.0% | 11.1% |
| Kerry Logistics Network Ltd ($636) | 11.3% | 12.0% | 13.4% | 10.5% | |
| Guangdong Yueyun Transportation Co Ltd-H ($3399) | 8.9% | 5.6% | 7.2% | 9.6% | |
| |
|---|
| Median (29 companies) | 5.0% | 3.2% | 2.8% | 3.2% | 1.0% |
|---|
| MTR Corp Ltd ($66) | 7.7% | 6.6% | 5.8% | 7.2% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jinhui Holdings Co Ltd ($137) | 2.8x | 5.0x | 4.2x | 17.5x | 19.6x |
| China Shipping Development Co Ltd ($1138) | 7.2x | 20.2x | 92.8x | 12.8x | |
| Tianjin Binhai Teda Logistics Group Corp Ltd ($8348) | -0.5x | 9.7x | 9.3x | 9.5x | |
| China COSCO Holdings Co Ltd ($1919) | | | 18.8x | 9.0x | |
| AMS Public Transport Holdings Ltd ($77) | 0.7x | 1.2x | 11.6x | 7.7x | 4.5x |
| |
|---|
| Median (22 companies) | -0.0x | 1.2x | 1.5x | 1.6x | 3.9x |
|---|
| MTR Corp Ltd ($66) | 1.9x | 1.9x | 1.9x | 0.9x | 1.5x |
