Aluminum Corp of China Ltd revenue decline decelerated from 16.2% in 2014 to 13.3% in 2015
17/03/2016 • About Aluminum Corp of China Ltd (
$2600) • By InTwits
Aluminum Corp of China Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Aluminum Corp of China Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.2%
- EBITDA Margin is quite volatile: 4.4% in 2015, -2.4% in 2014, 7.5% in 2013, 0.5% in 2012, 6.4% in 2011
- Aluminum Corp of China Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 0.9%.
- CAPEX is quite volatile: 3,132 in 2015, 3,121 in 2014, 814 in 2013, 387 in 2012, 6,549 in 2011
- The company has unprofitable business model: ROIC is at -1.2%
- It operates with high leverage: Net Debt/EBITDA is 18.0x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aluminum Corp of China Ltd ($2600) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 145,874 | 143,437 | 169,431 | 142,000 | 123,095 | -13.3% |
| Gross Profit | 7,763 | 11 | 2,751 | 671 | 3,881 | 478.5% |
| SG&A | 4,177 | 4,273 | 4,304 | 6,151 | 3,602 | -41.4% |
| EBITDA | 9,387 | 686 | 12,725 | -3,382 | 5,356 | -258.4% |
| Net Income | 238 | -8,234 | 975 | -16,208 | 149 | -100.9% |
Balance Sheet
|
|---|
| Cash | 10,591 | 9,064 | 11,382 | 16,269 | 20,807 | 27.9% |
| Short Term Debt | 46,738 | 67,915 | 73,348 | 75,359 | 63,246 | -16.1% |
| Long Term Debt | 35,969 | 36,636 | 46,295 | 44,769 | 54,001 | 20.6% |
Cash flow
|
|---|
| Capex | 8,661 | 9,150 | 8,519 | 8,334 | 9,372 | 12.5% |
Ratios
|
|---|
| Revenue growth | 20.6% | -1.7% | 18.1% | -16.2% | -13.3% | |
| EBITDA growth | -0.3% | -92.7% | 1,755.2% | -126.6% | -258.4% | |
| Gross Margin | 5.3% | 0.0% | 1.6% | 0.5% | 3.2% | 2.7% |
| EBITDA Margin | 6.4% | 0.5% | 7.5% | -2.4% | 4.4% | 6.7% |
| Net Income Margin | 0.2% | -5.7% | 0.6% | -11.4% | 0.1% | 11.5% |
| SG&A, % of revenue | 2.9% | 3.0% | 2.5% | 4.3% | 2.9% | -1.4% |
| CAPEX, % of revenue | 5.9% | 6.4% | 5.0% | 5.9% | 7.6% | 1.7% |
| ROIC | 2.7% | -2.7% | 3.3% | -6.4% | -1.2% | 5.2% |
| ROE | 0.5% | -17.2% | 2.2% | -44.6% | 0.4% | 45.1% |
| Net Debt/EBITDA | 7.7x | 139.2x | 8.5x | | 18.0x | 18.0x |
Revenue and profitability
The company's Revenue dropped on 13.3% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.7 pp from -2.4% to 4.4% in 2015.
Gross Margin increased on 2.7 pp from 0.47% to 3.2% in 2015. SG&A as a % of Revenue decreased slightly on 1.4 pp from 4.3% to 2.9% in 2015.
Net Income marign surged on 11.5 pp from -11.4% to 0.12% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.6% in 2015. The company's CAPEX/Revenue increased slightly on 1.2 pp from 6.4% in 2012 to 7.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 6.2%.Battling declining revenue the company made large investments to CAPEX (175% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-1.17%) and low but positive ROE (0.44%). ROIC increased on 5.2 pp from -6.4% to -1.2% in 2015. ROE jumped on 45.1 pp from -44.6% to 0.44% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 18.0x and Debt / EBITDA is 21.9x. Net Debt / EBITDA surged18.0x from to 18.0x in 2015. Debt decreased on 2.4% in 2015 while cash jumped on 27.9% in 2015.
Appendix 1: Peers in Mining
Below you can find Aluminum Corp of China 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) | | -5.5% | -57.1% | 187.0% | -45.9% |
| 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) | 36.5% | 5.4% | 0.6% | -5.3% | -7.5% |
|---|
| Aluminum Corp of China Ltd ($2600) | | -1.7% | 18.1% | -16.2% | -13.3% |
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) | 19.2% | 14.4% | 14.7% | 15.6% | 26.9% |
|---|
| Aluminum Corp of China Ltd ($2600) | 5.3% | 0.0% | 1.6% | 0.5% | 3.2% |
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) | 6.4% | 4.9% | 8.3% | 4.9% | 8.7% |
|---|
| Aluminum Corp of China Ltd ($2600) | 6.4% | 0.5% | 7.5% | -2.4% | 4.4% |
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) | 16.3% | 17.4% | 16.0% | 15.8% | 23.3% |
|---|
| Aluminum Corp of China Ltd ($2600) | 5.9% | 6.4% | 5.0% | 5.9% | 7.6% |
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% | 10.6% |
| 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) | 3.7% | 2.2% | 3.0% | 1.7% | -0.1% |
|---|
| Aluminum Corp of China Ltd ($2600) | 2.7% | -2.7% | 3.3% | -6.4% | -1.2% |
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 | 20.2x |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x |
| Lingbao Gold Co Ltd ($3330) | 3.5x | 5.3x | | 8.3x | |
| |
|---|
| Median (27 companies) | 0.9x | 1.5x | 1.9x | 4.4x | 3.9x |
|---|
