Hilong Holding Ltd reports 80.7% CAPEX decline and 3.6% Revenue decline
18/03/2016 • About Hilong Holding Ltd (
$1623) • By InTwits
Hilong Holding Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hilong Holding Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.1%. At the same time it's a lot of higher than industry average of 13.9%.
- CAPEX is quite volatile: 239 in 2015, 1,239 in 2014, 463 in 2013, 377 in 2012, 313 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.3x while industry average is 2.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hilong Holding Ltd ($1623) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,834 | 2,264 | 2,452 | 2,576 | 2,484 | -3.6% |
| Gross Profit | 751 | 895 | 988 | 1,021 | 810 | -20.6% |
| SG&A | 307 | 334 | 328 | 409 | 403 | -1.7% |
| EBITDA | 522 | 586 | 682 | 742 | 564 | -24.1% |
| Net Income | 302 | 345 | 345 | 398 | 161 | -59.5% |
Balance Sheet
|
|---|
| Cash | 326 | 404 | 391 | 548 | 821 | 49.9% |
| Short Term Debt | 583 | 646 | 654 | 833 | 1,592 | 91.3% |
| Long Term Debt | 179 | 293 | 507 | 1,630 | 1,084 | -33.5% |
Cash flow
|
|---|
| Capex | 313 | 377 | 463 | 1,239 | 239 | -80.7% |
Ratios
|
|---|
| Revenue growth | 35.2% | 23.5% | 8.3% | 5.0% | -3.6% | |
| EBITDA growth | 37.8% | 12.2% | 16.3% | 8.8% | -24.1% | |
| Gross Margin | 41.0% | 39.5% | 40.3% | 39.6% | 32.6% | -7.0% |
| EBITDA Margin | 28.5% | 25.9% | 27.8% | 28.8% | 22.7% | -6.1% |
| Net Income Margin | 16.5% | 15.2% | 14.1% | 15.4% | 6.5% | -9.0% |
| SG&A, % of revenue | 16.7% | 14.7% | 13.4% | 15.9% | 16.2% | 0.3% |
| CAPEX, % of revenue | 17.1% | 16.7% | 18.9% | 48.1% | 9.6% | -38.5% |
| ROIC | 19.0% | 15.5% | 14.8% | 12.0% | 6.0% | -6.0% |
| ROE | 23.8% | 17.3% | 14.4% | 14.3% | 5.4% | -8.9% |
| Net Debt/EBITDA | 0.8x | 0.9x | 1.1x | 2.6x | 3.3x | 0.7x |
Revenue and profitability
Hilong Holding Ltd's Revenue decreased on 3.6% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 6.1 pp from 28.8% to 22.7% in 2015.
Gross Margin decreased on 7.0 pp from 39.6% to 32.6% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 9.0 pp from 15.4% to 6.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 9.6% in 2015. CAPEX/Revenue decreased on 7.0 pp from 16.7% in 2012 to 9.6% in 2015. For the last three years the average CAPEX/Revenue was 25.5%.
Return on investment
The company operates at low ROIC (6.05%) and ROE (5.42%). ROIC decreased on 6.0 pp from 12.0% to 6.0% in 2015. ROE decreased on 8.9 pp from 14.3% to 5.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is 4.7x. Net Debt / EBITDA surged on 0.7x from 2.6x to 3.3x in 2015. Debt increased on 8.7% in 2015 while cash surged on 49.9% in 2015.
Management team
Zhang Jun is a the company's CEO. Zhang Jun has spent 7 years at the company.
Appendix 1: Peers in Oil&Gas Services
Below you can find Hilong Holding Ltd benchmarking vs. other companies in Oil&Gas Services 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 |
|---|
| Yuan Heng Gas Holdings Ltd ($332) | | 196.3% | 207.4% | 105.9% | -36.4% |
| CIMC Enric Holdings Ltd ($3899) | 70.8% | 18.4% | -0.3% | 39.7% | |
| TSC Group Holdings Ltd ($206) | -2.8% | 31.7% | 9.9% | 34.0% | |
| China Oilfield Services Ltd ($2883) | 4.9% | 20.0% | 23.8% | 20.6% | |
| Sinopec Engineering Group Co Ltd ($2386) | 2.4% | 25.9% | 13.1% | 13.3% | |
| |
|---|
| Median (12 companies) | 15.3% | 28.8% | 11.5% | 1.4% | -36.4% |
|---|
| Hilong Holding Ltd ($1623) | | 23.5% | 8.3% | 5.0% | -3.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Anton Oilfield Services Group/Hong Kong ($3337) | 41.5% | 45.0% | 44.3% | 31.2% | |
| TSC Group Holdings Ltd ($206) | 38.0% | 30.7% | 31.6% | 27.8% | |
| Jutal Offshore Oil Services Ltd ($3303) | 20.3% | 21.7% | 25.1% | 19.6% | |
| CIMC Enric Holdings Ltd ($3899) | 18.7% | 19.5% | 20.4% | 18.8% | |
| Sinopec Engineering Group Co Ltd ($2386) | 16.6% | 14.3% | 14.7% | 12.7% | |
| |
|---|
| Median (9 companies) | 18.7% | 14.3% | 14.7% | 12.7% | 3.0% |
|---|
| Hilong Holding Ltd ($1623) | 41.0% | 39.5% | 40.3% | 39.6% | 32.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hans Energy Co Ltd ($554) | -38.3% | 40.4% | 45.0% | 42.8% | |
| China Oilfield Services Ltd ($2883) | 43.7% | 39.8% | 40.0% | 37.0% | |
| SPT Energy Group Inc ($1251) | 24.7% | 23.8% | 19.8% | 14.1% | |
| TSC Group Holdings Ltd ($206) | 11.7% | 11.4% | 14.0% | 13.2% | |
| Anton Oilfield Services Group/Hong Kong ($3337) | 18.6% | 24.5% | 28.0% | 12.5% | |
| |
|---|
| Median (12 companies) | 12.0% | 12.4% | 14.0% | 11.0% | 2.2% |
|---|
| Hilong Holding Ltd ($1623) | 28.5% | 25.9% | 27.8% | 28.8% | 22.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Petro-King Oilfield Services Ltd ($2178) | 8.2% | 13.3% | 13.3% | 75.4% | |
| China Oilfield Services Ltd ($2883) | 24.9% | 16.5% | 30.9% | 29.8% | |
| Anton Oilfield Services Group/Hong Kong ($3337) | 13.3% | 12.6% | 32.2% | 22.8% | |
| Jutal Offshore Oil Services Ltd ($3303) | 6.6% | 12.8% | 8.4% | 12.9% | |
| SPT Energy Group Inc ($1251) | 6.8% | 7.4% | 5.6% | 7.9% | |
| |
|---|
| Median (12 companies) | 6.7% | 6.4% | 5.2% | 6.3% | 0.8% |
|---|
| Hilong Holding Ltd ($1623) | 17.1% | 16.7% | 18.9% | 48.1% | 9.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Yuan Heng Gas Holdings Ltd ($332) | | -59.8% | -0.0% | 25.6% | 3.9% |
| CIMC Enric Holdings Ltd ($3899) | 19.4% | 20.3% | 20.0% | 21.3% | |
| Sinopec Engineering Group Co Ltd ($2386) | 59.6% | 77.5% | 33.3% | 18.6% | |
| China Oilfield Services Ltd ($2883) | 8.6% | 8.9% | 11.2% | 11.6% | |
| TSC Group Holdings Ltd ($206) | 5.2% | 6.7% | 9.1% | 10.5% | |
| |
|---|
| Median (12 companies) | 8.3% | 7.8% | 10.1% | 7.9% | 3.9% |
|---|
| Hilong Holding Ltd ($1623) | 19.0% | 15.5% | 14.8% | 12.0% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hans Energy Co Ltd ($554) | | 14.0x | 11.9x | 12.9x | |
| Anton Oilfield Services Group/Hong Kong ($3337) | -0.5x | 0.0x | 0.9x | 7.4x | |
| Yuan Heng Gas Holdings Ltd ($332) | | | | 2.7x | 8.9x |
| Sinopec Kantons Holdings Ltd ($934) | -1.2x | -7.1x | -7.4x | 2.5x | |
| Jutal Offshore Oil Services Ltd ($3303) | 1.0x | 0.4x | 1.7x | 1.8x | |
| |
|---|
| Median (11 companies) | -0.3x | 0.0x | -0.4x | 1.8x | 8.9x |
|---|
| Hilong Holding Ltd ($1623) | 0.8x | 0.9x | 1.1x | 2.6x | 3.3x |
