China Wood Optimization Holding Ltd demonstrated fast growth over the last few years. Will the growth continue?
17/03/2016 • About China Wood Optimization Holding Ltd (
$8099) • By InTwits
Have you thought about China Wood Optimization Holding Ltd as a growth stock? Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
China Wood Optimization Holding Ltd showed fast growth in the last financial year. China Wood Optimization Holding Ltd's revenue surged on 18.9% in FY2015. Together with revenue growth China Wood Optimization Holding Ltd also managed to keep EBITDA growth. EBITDA grew 22.0% for the same period.
In the longer period China Wood Optimization Holding Ltd showed fast revenue growth of 31.1% from 2012 to 2015 annualy. EBITDA surged on 15.7% from 2012 to 2015 annualy.
China Wood Optimization Holding Ltd ($8099) financials for the last 5 years
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 160 | 271 | 481 | 513 | 610 |
|---|
| Revenue growth, % | | 68.7% | 77.9% | 6.5% | 18.9% |
|---|
| Gross margin, % | 36.0% | 33.6% | 29.3% | 26.3% | 25.3% |
|---|
| SG&A, % | 14.6% | 10.9% | 12.9% | 11.7% | 9.70% |
|---|
| EBITDA | 44 | 77 | 98 | 97 | 119 |
|---|
| EBITDA growth, % | | 73.5% | 28.2% | -1.0% | 22.0% |
|---|
| EBITDA margin, % | 27.5% | 28.3% | 20.4% | 19.0% | 19.4% |
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| Net Income | 23 | 39 | 53 | 64 | 75 |
|---|
| Net Income margin, % | 14.4% | 14.5% | 11.0% | 12.4% | 12.3% |
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| |
| CAPEX | 96 | 30 | 46 | 9 | 118 |
|---|
| CAPEX/Revenue, % | 59.7% | 10.9% | 9.64% | 1.78% | 19.3% |
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| Debt | 120 | 145 | 178 | 58 | 76 |
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| Cash | 2 | 5 | 68 | 202 | 117 |
|---|
| Net Debt/EBITDA | 2.7x | 1.8x | 1.1x | -1.5x | -0.3x |
|---|
| |
| ROIC, % | | 33.5% | 27.3% | 17.7% | 17.7% |
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| ROE, % | | 81.5% | 40.3% | 19.6% | 15.4% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. The company's EBITDA margin increased slightly on 0.400 pp from 19% to 19.4% in 2015. In the last 3 years China Wood Optimization Holding Ltd's EBITDA margin dropped on 8.90 pp from 28.3% in 2012 to 19.4% in 2015.
China Wood Optimization Holding Ltd shows attractive ROIC at 17.7% for the last 12 months which assumes stable development model. Three years ago it was considerably higher at 33.5%. It's average level of ROIC for the last three years was 20.9%.
Net Income margin decreased slightly on 0.100 pp from 12.4% to 12.3% in 2015. If we look for the longer period the company showed big decline in Net Income margin of 2.20 pp from 14.5% in 2012 to 12.3% in 2015.
China Wood Optimization Holding Ltd operates at ROE of 15.4%. Average ROE for the last three years was 25.1%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.China Wood Optimization Holding Ltd's CAPEX/Revenue was 19.3% in FY2015. CAPEX/Revenue surged on 8.37 pp from 10.9% in 2012 to 19.3% in 2015. It's average CAPEX/Revenue for the last three years was 10.2%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.3x Net Debt/EBITDA. In the longer period leverage dropped on 2.18x from 1.83x in 2012 to -0.35x in 2015.
Peers in Building Materials
Below we provide China Wood Optimization Holding Ltd benchmarking against other companies in Building Materials 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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) | 33.2% | -3.5% | 9.6% | 5.1% | -34.4% |
|---|
| China Wood Optimization Holding Ltd ($8099) | | 68.7% | 77.9% | 6.5% | 18.9% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | |
| China Resources Cement Holdings Ltd ($1313) | 31.1% | 24.1% | 28.5% | 31.3% | |
| |
|---|
| Median (24 companies) | 26.0% | 20.0% | 22.0% | 20.8% | 13.0% |
|---|
| China Wood Optimization Holding Ltd ($8099) | 36.0% | 33.6% | 29.3% | 26.3% | 25.3% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | -4.6% |
|---|
| China Wood Optimization Holding Ltd ($8099) | 27.5% | 28.3% | 20.4% | 19.0% | 19.4% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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% | 6.5% | 0.4% |
|---|
| China Wood Optimization Holding Ltd ($8099) | 59.7% | 10.9% | 9.6% | 1.8% | 19.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 Singyes Solar Technologies Holdings Ltd ($750) | 21.1% | 18.6% | 19.9% | 16.0% | |
| China Resources Cement Holdings Ltd ($1313) | 14.0% | 8.0% | 9.6% | 13.0% | |
| |
|---|
| Median (24 companies) | 12.7% | 5.0% | 6.9% | 4.8% | -2.8% |
|---|
| China Wood Optimization Holding Ltd ($8099) | | 33.5% | 27.3% | 17.7% | 17.7% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 | 3.0x | 2.7x | 2.0x | |
|---|
| China Wood Optimization Holding Ltd ($8099) | 2.7x | 1.8x | 1.1x | -1.5x | -0.3x |
