Asia Cement China Holdings Corp Net Income dropped on 138% in 2015 and Revenue dropped on 22.0%
18/03/2016 • About Asia Cement China Holdings Corp (
$743) • By InTwits
Asia Cement China Holdings Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Asia Cement China Holdings Corp doesn't have a profitable business model yet: 2015 ROIC is 1.4%
- Asia Cement China Holdings Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.5%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 420 in 2015, 697 in 2014, 1,656 in 2013, 615 in 2012, 467 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.4%
- It operates with high leverage: Net Debt/EBITDA is 5.1x 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.
Asia Cement China Holdings Corp ($743) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,207 | 6,684 | 7,331 | 8,194 | 6,391 | -22.0% |
| Gross Profit | 2,286 | 1,122 | 1,617 | 1,911 | 956 | -50.0% |
| SG&A | 611 | 597 | 631 | 754 | 738 | -2.2% |
| EBITDA | 2,488 | 1,375 | 1,822 | 2,215 | 1,154 | -47.9% |
| Net Income | 1,341 | 395 | 823 | 790 | -299 | -137.8% |
Balance Sheet
|
|---|
| Cash | 1,731 | 1,620 | 1,968 | 2,325 | 1,105 | -52.5% |
| Short Term Debt | 1,336 | 2,740 | 3,473 | 4,804 | 3,379 | -29.7% |
| Long Term Debt | 5,216 | 3,294 | 3,483 | 3,814 | 3,566 | -6.5% |
Cash flow
|
|---|
| Capex | 467 | 615 | 1,656 | 697 | 420 | -39.8% |
Ratios
|
|---|
| Revenue growth | 43.8% | -18.6% | 9.7% | 11.8% | -22.0% | |
| EBITDA growth | 82.4% | -44.7% | 32.5% | 21.6% | -47.9% | |
| Gross Margin | 27.9% | 16.8% | 22.1% | 23.3% | 15.0% | -8.4% |
| EBITDA Margin | 30.3% | 20.6% | 24.9% | 27.0% | 18.1% | -9.0% |
| Net Income Margin | 16.3% | 5.9% | 11.2% | 9.6% | -4.7% | -14.3% |
| SG&A, % of revenue | 7.4% | 8.9% | 8.6% | 9.2% | 11.5% | 2.3% |
| CAPEX, % of revenue | 5.7% | 9.2% | 22.6% | 8.5% | 6.6% | -1.9% |
| ROIC | 12.1% | 4.1% | 6.8% | 7.0% | 1.4% | -5.5% |
| ROE | 17.0% | 4.6% | 9.2% | 8.3% | -3.1% | -11.4% |
| Net Debt/EBITDA | 1.9x | 3.2x | 2.7x | 2.8x | 5.1x | 2.2x |
Revenue and profitability
The company's Revenue dropped on 22.0% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 9.0 pp from 27.0% to 18.1% in 2015.
Gross Margin decreased on 8.4 pp from 23.3% to 15.0% in 2015. SG&A as a % of Revenue increased on 2.3 pp from 9.2% to 11.5% in 2015.
Net Income marign dropped on 14.3 pp from 9.6% to -4.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.6% in 2015. Asia Cement China Holdings Corp showed decline in CAPEX/Revenue of 2.6 pp from 9.2% in 2012 to 6.6% in 2015. For the last three years the average CAPEX/Revenue was 12.6%.
Return on investment
The company operates at low but positive ROIC (1.43%) and negative ROE (-3.13%). ROIC decreased on 5.5 pp from 7.0% to 1.4% in 2015. ROE dropped on 11.4 pp from 8.3% to -3.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.1x and Debt / EBITDA is 6.0x. Net Debt / EBITDA jumped on 2.2x from 2.8x to 5.1x in 2015. Debt dropped on 19.4% in 2015 while cash dropped on 52.5% in 2015.
Management team
The company's CEO is Wu Chung-Lih. Wu Chung-Lih has 10 years tenure at the company.
Appendix 1: Peers in Building Materials
Below we provide Asia Cement China Holdings Corp 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Summit Ascent Holdings Ltd ($102) | | -86.4% | -19.6% | 177.1% | -14.1% |
| Pacific Plywood Hldg Ltd ($767) | | -34.9% | -14.5% | 119.5% | |
| Luoyang Glass Co Ltd ($1108) | | -40.3% | -32.3% | 76.2% | 0.7% |
| 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) | 35.0% | -1.3% | 10.6% | 5.1% | -12.0% |
|---|
| Asia Cement China Holdings Corp ($743) | | -18.6% | 9.7% | 11.8% | -22.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 24.0% |
| |
|---|
| Median (24 companies) | 26.0% | 21.8% | 22.5% | 20.8% | 14.3% |
|---|
| Asia Cement China Holdings Corp ($743) | 27.9% | 16.8% | 22.1% | 23.3% | 15.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 14.0% |
| China Tianrui Group Cement Co Ltd ($1252) | 32.4% | 28.5% | 23.7% | 26.7% | 32.8% |
| West China Cement Ltd ($2233) | 36.4% | 30.0% | 28.5% | 25.5% | 23.5% |
| |
|---|
| Median (24 companies) | 18.3% | 15.1% | 16.9% | 17.4% | 8.1% |
|---|
| Asia Cement China Holdings Corp ($743) | 30.3% | 20.6% | 24.9% | 27.0% | 18.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 10.1% |
| 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% | 8.1% |
| |
|---|
| Median (24 companies) | 8.2% | 10.1% | 8.3% | 5.4% | 5.6% |
|---|
| Asia Cement China Holdings Corp ($743) | 5.7% | 9.2% | 22.6% | 8.5% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | 17.2% |
| China Wood Optimization Holding Ltd ($8099) | | 33.5% | 27.3% | 17.7% | 17.7% |
| China Singyes Solar Technologies Holdings Ltd ($750) | 21.1% | 18.6% | 19.9% | 16.0% | |
| |
|---|
| Median (24 companies) | 13.3% | 6.6% | 7.0% | 4.8% | 0.9% |
|---|
| Asia Cement China Holdings Corp ($743) | 12.1% | 4.1% | 6.8% | 7.0% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | 7.9x |
| China Shanshui Cement Group Ltd ($691) | 1.8x | 3.0x | 4.1x | 4.8x | |
| |
|---|
| Median (20 companies) | 0.9x | 2.4x | 1.1x | 1.9x | 3.9x |
|---|
| Asia Cement China Holdings Corp ($743) | 1.9x | 3.2x | 2.7x | 2.8x | 5.1x |
