Want Want China Holdings Ltd reports 35.1% CAPEX decline and 7.4% Revenue decline
15/03/2016 • About Want Want China Holdings Ltd (
$151) • By InTwits
Want Want China Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Want Want China Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's in pair with industry average of 45.0%.
- CAPEX is quite volatile: 9,311 in 2015, 5,063 in 2014, 2,758 in 2013, 3,611 in 2012, 12,444 in 2011
- The company has highly profitable business model: ROIC is at 21.8%
- It operates with high leverage: Net Debt/EBITDA is -0.2x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Want Want China Holdings Ltd ($151) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,044 | 21,193 | 23,472 | 23,262 | 21,541 | -7.4% |
| Gross Profit | 6,624 | 8,380 | 9,751 | 9,361 | 9,453 | 1.0% |
| SG&A | 3,486 | 4,000 | 4,595 | 4,784 | 5,080 | 6.2% |
| EBITDA | 3,830 | 5,046 | 6,057 | 5,540 | 5,437 | -1.9% |
| Net Income | 2,711 | 3,495 | 4,226 | 3,823 | 3,407 | -10.9% |
Balance Sheet
|
|---|
| Cash | 9,053 | 9,348 | 12,467 | 10,242 | 9,364 | -8.6% |
| Short Term Debt | 4,880 | 2,182 | 2,484 | 3,217 | 1,671 | -48.0% |
| Long Term Debt | 1,575 | 4,071 | 5,128 | 5,574 | 6,478 | 16.2% |
Cash flow
|
|---|
| Capex | 1,444 | 1,536 | 1,678 | 2,180 | 1,415 | -35.1% |
Ratios
|
|---|
| Revenue growth | 25.4% | 11.3% | 10.8% | -0.9% | -7.4% | |
| EBITDA growth | 13.1% | 31.7% | 20.0% | -8.5% | -1.9% | |
| Gross Margin | 34.8% | 39.5% | 41.5% | 40.2% | 43.9% | 3.6% |
| EBITDA Margin | 20.1% | 23.8% | 25.8% | 23.8% | 25.2% | 1.4% |
| Net Income Margin | 14.2% | 16.5% | 18.0% | 16.4% | 15.8% | -0.6% |
| SG&A, % of revenue | 18.3% | 18.9% | 19.6% | 20.6% | 23.6% | 3.0% |
| CAPEX, % of revenue | 7.6% | 7.2% | 7.2% | 9.4% | 6.6% | -2.8% |
| ROIC | 24.9% | 27.9% | 29.4% | 22.8% | 21.8% | -1.0% |
| ROE | 34.9% | 37.9% | 38.8% | 31.1% | 27.7% | -3.4% |
| Net Debt/EBITDA | -0.7x | -0.6x | -0.8x | -0.3x | -0.2x | 0.0x |
Revenue and profitability
Want Want China Holdings Ltd's Revenue decreased on 7.4% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.4 pp from 23.8% to 25.2% in 2015.
Gross Margin increased on 3.6 pp from 40.2% to 43.9% in 2015. SG&A as a % of Revenue increased on 3.0 pp from 20.6% to 23.6% in 2015.
Net Income marign decreased slightly on 0.62 pp from 16.4% to 15.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 6.6%. Want Want China Holdings Ltd showed small CAPEX/Revenue decline of 0.68 pp from 7.2% in 2012 to 6.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 7.7%.
Return on investment
The company operates at high and attractive ROIC (21.77%) and ROE (27.69%). ROIC decreased slightly on 1.0 pp from 22.8% to 21.8% in 2015. ROE decreased on 3.4 pp from 31.1% to 27.7% in 2015.
Leverage (Debt)
Debt level is -0.2x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA increased on 0.039x from -0.3x to -0.2x in 2015. Debt decreased on 7.3% in 2015 while cash decreased on 8.6% in 2015.
Management team
Want Want China Holdings Ltd's CEO Tsai Eng-Meng has spent 31 years at the company. Want Want China Holdings Ltd's CFO Chu Chi-Wen "Everett" has spent 6 years at the company.
Appendix 1: Peers in Food
Below you can find Want Want China Holdings Ltd benchmarking vs. other companies in Food 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 |
|---|
| Wealth Glory Holdings Ltd ($8269) | | -16.5% | -53.8% | 555.7% | -12.4% |
| Natural Dairy NZ Holdings Ltd ($462) | 12.0% | -47.2% | 19.1% | 76.6% | |
| China Modern Dairy Holdings Ltd ($1117) | 88.8% | 50.7% | 96.1% | 52.8% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| Asia Cassava Resources Holdings Ltd ($841) | | -3.0% | 99.6% | 32.6% | -28.4% |
| |
|---|
| Median (37 companies) | 22.5% | 9.4% | 5.6% | 2.7% | -2.3% |
|---|
| Want Want China Holdings Ltd ($151) | | 11.3% | 10.8% | -0.9% | -7.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | |
| Shenguan Holdings Group Ltd ($829) | 61.9% | 58.2% | 58.5% | 54.9% | |
| Yashili International Holdings Ltd ($1230) | 52.0% | 53.7% | 53.5% | 51.2% | |
| Natural Dairy NZ Holdings Ltd ($462) | 16.3% | -13.7% | 27.5% | 48.8% | |
| Christine International Holdings Ltd ($1210) | 51.3% | 50.2% | 49.7% | 47.2% | |
| |
|---|
| Median (37 companies) | 17.7% | 16.5% | 18.5% | 19.8% | 17.2% |
|---|
| Want Want China Holdings Ltd ($151) | 34.8% | 39.5% | 41.5% | 40.2% | 43.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenguan Holdings Group Ltd ($829) | 57.2% | 58.7% | 59.2% | 54.5% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 147.8% | 40.3% | 48.4% | 47.1% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 109.2% | 45.1% | 47.9% | 47.1% | 37.2% |
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | |
| China Modern Dairy Holdings Ltd ($1117) | 33.9% | 33.5% | 27.0% | 25.3% | |
| |
|---|
| Median (37 companies) | 8.5% | 7.8% | 6.5% | 7.4% | 4.9% |
|---|
| Want Want China Holdings Ltd ($151) | 20.1% | 23.8% | 25.8% | 23.8% | 25.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 453.6% | 98.2% | 29.8% | 132.0% | 109.8% |
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 182.5% | 26.1% | 18.3% | 43.4% | |
| Yashili International Holdings Ltd ($1230) | 3.6% | 8.2% | 7.1% | 20.1% | |
| Vedan International Holdings Ltd ($2317) | 2.8% | 2.5% | 2.4% | 18.8% | |
| |
|---|
| Median (37 companies) | 3.6% | 5.9% | 5.6% | 5.1% | 2.9% |
|---|
| Want Want China Holdings Ltd ($151) | 7.6% | 7.2% | 7.2% | 9.4% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | |
| Shenguan Holdings Group Ltd ($829) | 40.6% | 40.0% | 33.2% | 21.4% | |
| Huisheng International Holdings Ltd ($1340) | 63.0% | 31.9% | 23.7% | 16.3% | |
| Asia Cassava Resources Holdings Ltd ($841) | 13.8% | 4.2% | 5.9% | 13.6% | 11.6% |
| Tenwow International Holdings Ltd ($1219) | 20.3% | 19.7% | 15.7% | 12.8% | |
| |
|---|
| Median (38 companies) | 10.4% | 6.7% | 5.9% | 5.5% | 4.8% |
|---|
| Want Want China Holdings Ltd ($151) | 24.9% | 27.9% | 29.4% | 22.8% | 21.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Yurun Food Group Ltd ($1068) | 0.4x | 40.7x | 6.9x | 9.4x | |
| Beijing Jingkelong Co Ltd ($814) | 3.4x | 5.0x | 4.8x | 5.3x | |
| CP Lotus Corp ($121) | 2.3x | | 6.5x | 5.1x | 3.0x |
| DaChan Food Asia Ltd ($3999) | -0.3x | 0.1x | 1.3x | 4.8x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.3x | 1.8x | 3.8x | 4.5x | |
| |
|---|
| Median (29 companies) | 0.2x | -0.3x | 0.8x | 0.8x | 2.7x |
|---|
| Want Want China Holdings Ltd ($151) | -0.7x | -0.6x | -0.8x | -0.3x | -0.2x |
