Huaneng Renewables Corp Ltd Net Income jumped on 65.9% in 2015 and EBITDA Margin increased slightly on 1.8 pp from 91.3% to 93.1%
15/03/2016 • About Huaneng Renewables Corp Ltd (
$958) • By InTwits
Huaneng Renewables Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Huaneng Renewables Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 183.6%. At the same time it's a lot of higher than industry average of 44.1%.
- CAPEX is quite volatile: 172 in 2015, 139 in 2014, 181 in 2013, 42.4 in 2012, 178 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.1%
- It operates with high leverage: Net Debt/EBITDA is 7.1x while industry average is 3.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huaneng Renewables Corp Ltd ($958) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,196 | 4,027 | 5,909 | 6,151 | 7,357 | 19.6% |
| SG&A | 118 | 127 | 151 | 187 | 189 | 1.1% |
| EBITDA | 3,521 | 3,784 | 4,755 | 5,616 | 6,851 | 22.0% |
| Net Income | 1,023 | 558 | 913 | 1,121 | 1,860 | 65.9% |
Balance Sheet
|
|---|
| Cash | 7,506 | 3,768 | 4,322 | 6,385 | 3,470 | -45.7% |
| Short Term Debt | 7,042 | 8,638 | 10,832 | 17,740 | 19,223 | 8.4% |
| Long Term Debt | 21,641 | 24,262 | 25,096 | 29,611 | 32,695 | 10.4% |
Cash flow
|
|---|
| Capex | 7,699 | 6,580 | 7,327 | 13,394 | 12,644 | -5.6% |
Ratios
|
|---|
| Revenue growth | 80.7% | 26.0% | 46.7% | 4.1% | 19.6% | |
| EBITDA growth | 99.1% | 7.5% | 25.6% | 18.1% | 22.0% | |
| EBITDA Margin | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% | 1.8% |
| Net Income Margin | 32.0% | 13.9% | 15.4% | 18.2% | 25.3% | 7.1% |
| SG&A, % of revenue | 3.7% | 3.1% | 2.6% | 3.0% | 2.6% | -0.5% |
| CAPEX, % of revenue | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% | -45.9% |
| ROIC | 7.0% | 5.0% | 5.8% | 5.8% | 6.1% | 0.3% |
| ROE | 12.3% | 4.8% | 7.1% | 7.4% | 11.0% | 3.5% |
| Net Debt/EBITDA | 6.0x | 7.7x | 6.6x | 7.3x | 7.1x | -0.2x |
Revenue and profitability
Huaneng Renewables Corp Ltd's Revenue surged on 19.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.5 pp from 45.2% to 55.7% in 2015.
SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 7.1 pp from 18.2% to 25.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
Huaneng Renewables Corp Ltd's CAPEX/Revenue was 172% in 2015. Huaneng Renewables Corp Ltd's CAPEX/Revenue increased on 8.5 pp from 163% in 2012 to 172% in 2015. It's average CAPEX/Revenue for the last three years was 171%.The company has spent a lot to CAPEX (185% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (6.10%) and ROE (10.97%). ROIC showed almost no change in 2015. ROE increased on 3.5 pp from 7.4% to 11.0% in 2015.
Leverage (Debt)
Debt level is 7.1x Net Debt / EBITDA and 7.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 7.3x to 7.1x in 2015. Debt increased on 9.6% in 2015 while cash dropped on 45.7% in 2015.
Appendix 1: Peers in Electric
Below we provide Huaneng Renewables Corp Ltd benchmarking against other companies in Electric 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 |
|---|
| Tianjin Development Hldgs Ltd ($882) | 9.1% | 10.6% | 27.3% | 37.6% | |
| Enerchina Holdings Ltd ($622) | 193.3% | -15.4% | 6.8% | 28.5% | |
| Amber Energy Ltd ($90) | 10.1% | -14.7% | 21.2% | 20.1% | |
| CGN Power Co Ltd ($1816) | | 10.7% | -1.2% | 19.3% | 12.3% |
| Huadian Power International Corp Ltd ($1071) | 20.1% | 8.8% | 11.8% | 15.1% | |
| |
|---|
| Median (15 companies) | 17.0% | 5.8% | 11.4% | 4.9% | 6.7% |
|---|
| Huaneng Renewables Corp Ltd ($958) | | 26.0% | 46.7% | 4.1% | 19.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 60.5% | 60.0% | 63.5% | 85.6% | |
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% |
| CGN Power Co Ltd ($1816) | 48.3% | 46.5% | 46.9% | 48.6% | 47.9% |
| Huadian Power International Corp Ltd ($1071) | 8.9% | | | 27.1% | |
| |
|---|
| Median (8 companies) | 48.3% | 46.5% | 52.8% | 37.9% | 50.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 100.2% | 90.5% | 82.8% | 87.0% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
| CGN Power Co Ltd ($1816) | 64.2% | 66.0% | 62.6% | 60.5% | 59.4% |
| Huadian Fuxin Energy Corp Ltd ($816) | 43.8% | 46.5% | 49.6% | 54.8% | |
| |
|---|
| Median (15 companies) | 23.8% | 28.5% | 33.9% | 34.1% | 59.4% |
|---|
| Huaneng Renewables Corp Ltd ($958) | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Power New Energy Development Co Ltd ($735) | 21.5% | 82.2% | 80.1% | 119.5% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 273.4% | 157.1% | 81.7% | 106.3% | |
| CGN Power Co Ltd ($1816) | 78.4% | 47.5% | 57.2% | 94.5% | 50.0% |
| Huadian Fuxin Energy Corp Ltd ($816) | 78.6% | 62.2% | 54.3% | 91.8% | |
| China Resources Power Holdings Co Ltd ($836) | 20.4% | 16.6% | 33.4% | 34.6% | |
| |
|---|
| Median (15 companies) | 23.6% | 25.0% | 24.1% | 18.0% | 20.0% |
|---|
| Huaneng Renewables Corp Ltd ($958) | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 5.4% | 5.5% | 6.1% | 46.5% | |
| Huaneng Power International Inc ($902) | 4.0% | 7.3% | 10.3% | 11.3% | |
| Huadian Power International Corp Ltd ($1071) | 2.7% | 5.0% | 8.4% | 10.4% | |
| CLP Holdings Ltd ($2) | 7.8% | 7.0% | 4.8% | 8.5% | 12.8% |
| China Resources Power Holdings Co Ltd ($836) | 5.9% | 7.7% | 9.7% | 8.0% | |
| |
|---|
| Median (15 companies) | 4.6% | 5.5% | 7.5% | 7.3% | 5.1% |
|---|
| Huaneng Renewables Corp Ltd ($958) | 7.0% | 5.0% | 5.8% | 5.8% | 6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Datang Corp Renewable Power Co Ltd ($1798) | 8.1x | 9.1x | 8.2x | 8.7x | |
| CGN Power Co Ltd ($1816) | 4.7x | 6.5x | 6.7x | 7.8x | 8.4x |
| Amber Energy Ltd ($90) | 3.0x | 5.8x | 6.4x | 7.3x | |
| Huadian Fuxin Energy Corp Ltd ($816) | 9.3x | 6.9x | 6.2x | 6.5x | |
| China Power New Energy Development Co Ltd ($735) | 5.9x | 4.8x | 5.5x | 6.4x | |
| |
|---|
| Median (14 companies) | 5.9x | 5.2x | 5.1x | 4.9x | 5.1x |
|---|
| Huaneng Renewables Corp Ltd ($958) | 6.0x | 7.7x | 6.6x | 7.3x | 7.1x |
