Billion Industrial Holdings Ltd reports 67.1% CAPEX growth while 13.3% Revenue decline
18/03/2016 • About Billion Industrial Holdings Ltd (
$2299) • By InTwits
Billion Industrial Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 11.1% in 2015, 8.5% in 2014, 10.5% in 2013, 17.0% in 2012, 19.8% in 2011
- Billion Industrial Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.9%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: 449 in 2015, 269 in 2014, 790 in 2013, 1,422 in 2012, 1,569 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.9%
- It operates with high leverage: Net Debt/EBITDA is 3.5x 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.
Billion Industrial Holdings Ltd ($2299) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,054 | 6,092 | 6,153 | 6,301 | 5,461 | -13.3% |
| Gross Profit | 1,324 | 1,108 | 727 | 586 | 591 | 0.8% |
| SG&A | 299 | 313 | 356 | 364 | 314 | -13.7% |
| EBITDA | 1,199 | 1,035 | 648 | 539 | 606 | 12.4% |
| Net Income | 904 | 750 | 358 | 204 | 202 | -0.8% |
Balance Sheet
|
|---|
| Cash | 1,093 | 644 | 220 | 882 | 519 | -41.2% |
| Short Term Debt | 484 | 1,119 | 1,973 | 3,065 | 2,640 | -13.9% |
| Long Term Debt | 235 | 21 | 18 | 17 | 16 | -3.8% |
Cash flow
|
|---|
| Capex | 1,569 | 1,422 | 790 | 269 | 449 | 67.1% |
Ratios
|
|---|
| Revenue growth | 40.5% | 0.6% | 1.0% | 2.4% | -13.3% | |
| EBITDA growth | 79.9% | -13.7% | -37.3% | -16.9% | 12.4% | |
| Gross Margin | 21.9% | 18.2% | 11.8% | 9.3% | 10.8% | 1.5% |
| EBITDA Margin | 19.8% | 17.0% | 10.5% | 8.5% | 11.1% | 2.5% |
| Net Income Margin | 14.9% | 12.3% | 5.8% | 3.2% | 3.7% | 0.5% |
| SG&A, % of revenue | 4.9% | 5.1% | 5.8% | 5.8% | 5.8% | -0.0% |
| CAPEX, % of revenue | 25.9% | 23.4% | 12.8% | 4.3% | 8.2% | 4.0% |
| ROIC | 23.2% | 13.7% | 6.1% | 3.3% | 3.9% | 0.5% |
| ROE | 24.2% | 14.2% | 6.8% | 3.9% | 3.9% | -0.0% |
| Net Debt/EBITDA | -0.3x | 0.5x | 2.7x | 4.1x | 3.5x | -0.6x |
Revenue and profitability
Billion Industrial Holdings Ltd's Revenue dropped on 13.3% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.5 pp from 8.5% to 11.1% in 2015.
Gross Margin increased slightly on 1.5 pp from 9.3% to 10.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 8.2%. Billion Industrial Holdings Ltd showed big decline in CAPEX/Revenue of 15.1 pp from 23.4% in 2012 to 8.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 8.4%.Battling declining revenue the company invested a large share of EBITDA (74.1%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (3.86%) and ROE (3.88%). ROIC increased slightly on 0.53 pp from 3.3% to 3.9% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 3.5x Net Debt / EBITDA and 4.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 4.1x to 3.5x in 2015. Debt dropped on 13.8% in 2015 while cash dropped on 41.2% in 2015.
Appendix 1: Peers in Chemicals
Below we provide Billion Industrial Holdings Ltd benchmarking against other companies in Chemicals 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 |
|---|
| Bestway International Holdings Ltd ($718) | | -25.4% | -62.1% | 330.3% | 238.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 39.7% | -33.6% | 5.5% | 29.1% | |
| China XLX Fertiliser Ltd ($1866) | | 7.0% | 0.6% | 28.0% | 13.9% |
| Century Sunshine Group Holdings Ltd ($509) | 49.2% | 68.7% | 32.0% | 26.4% | |
| Landing International Development Ltd ($582) | | 2.1% | 15.9% | 23.3% | 10.4% |
| |
|---|
| Median (31 companies) | 31.3% | 2.1% | 10.1% | 1.4% | -0.6% |
|---|
| Billion Industrial Holdings Ltd ($2299) | | 0.6% | 1.0% | 2.4% | -13.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 74.3% | 70.5% | 69.1% | 70.8% | 69.9% |
| China Flavors & Fragrances Co Ltd ($3318) | 41.3% | 46.8% | 48.6% | 47.8% | 48.9% |
| Smartac Group China Holdings Ltd ($395) | 17.3% | -1.8% | 11.2% | 40.4% | |
| Bracell Ltd ($1768) | 40.1% | 30.5% | 37.3% | 37.3% | 38.4% |
| Yingde Gases Group Co Ltd ($2168) | 34.2% | 31.7% | 31.0% | 32.1% | |
| |
|---|
| Median (31 companies) | 19.8% | 19.5% | 18.5% | 17.7% | 22.6% |
|---|
| Billion Industrial Holdings Ltd ($2299) | 21.9% | 18.2% | 11.8% | 9.3% | 10.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 66.4% | 63.8% | 59.1% | 60.0% | 58.3% |
| Bracell Ltd ($1768) | 30.1% | 22.3% | 30.8% | 38.2% | 35.9% |
| Yingde Gases Group Co Ltd ($2168) | 32.3% | 29.4% | 29.8% | 32.3% | |
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | |
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | |
| |
|---|
| Median (31 companies) | 15.2% | 13.2% | 14.5% | 13.8% | 13.4% |
|---|
| Billion Industrial Holdings Ltd ($2299) | 19.8% | 17.0% | 10.5% | 8.5% | 11.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Landing International Development Ltd ($582) | 27.9% | 7.2% | 29.6% | 419.5% | 247.4% |
| China Zenith Chemical Group Ltd ($362) | 36.8% | 147.3% | 55.7% | 67.4% | 152.2% |
| Smartac Group China Holdings Ltd ($395) | 22.5% | 14.0% | 4.7% | 49.3% | |
| China Flavors & Fragrances Co Ltd ($3318) | 16.4% | 15.8% | 20.1% | 42.4% | 35.8% |
| Bracell Ltd ($1768) | 24.4% | 22.3% | 64.3% | 35.4% | 11.7% |
| |
|---|
| Median (31 companies) | 8.3% | 7.2% | 8.3% | 5.9% | 7.0% |
|---|
| Billion Industrial Holdings Ltd ($2299) | 25.9% | 23.4% | 12.8% | 4.3% | 8.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 34.6% | 28.7% | 25.2% | 26.2% | 23.3% |
| Tiande Chemical Holdings Ltd ($609) | 24.4% | 26.2% | 29.4% | 20.7% | 20.6% |
| Century Sunshine Group Holdings Ltd ($509) | 3.5% | 11.3% | 15.9% | 16.4% | |
| Fufeng Group Ltd ($546) | 13.9% | 9.6% | 10.8% | 11.6% | 10.3% |
| Yingde Gases Group Co Ltd ($2168) | 14.7% | 10.6% | 11.5% | 11.5% | |
| |
|---|
| Median (31 companies) | 7.8% | 6.9% | 8.1% | 5.9% | 6.5% |
|---|
| Billion Industrial Holdings Ltd ($2299) | 23.2% | 13.7% | 6.1% | 3.3% | 3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.4x | 2.2x | 4.6x | 18.1x | |
| China XLX Fertiliser Ltd ($1866) | 2.4x | 2.6x | 5.1x | 5.8x | 5.1x |
| Ngai Hing Hong Co Ltd ($1047) | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 4.3x | 14.1x | 6.5x | 5.3x | |
| Sinofert Holdings Ltd ($297) | 4.3x | 2.9x | 32.4x | 5.0x | |
| |
|---|
| Median (24 companies) | 1.5x | 1.9x | 2.1x | 1.4x | 0.3x |
|---|
| Billion Industrial Holdings Ltd ($2299) | -0.3x | 0.5x | 2.7x | 4.1x | 3.5x |
