Shenguan Holdings Group Ltd reports 185% CAPEX growth while 24.8% Revenue decline
18/03/2016 • About Shenguan Holdings Group Ltd (
$829) • By InTwits
Shenguan Holdings Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shenguan Holdings Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.0%. At the same time it's in pair with industry average of 14.0%.
- CAPEX is quite volatile: 129 in 2015, 45.2 in 2014, 208 in 2013, 349 in 2012, 235 in 2011
- The company has business model with low profitability: ROIC is at 10.0%
- It operates with high leverage: Net Debt/EBITDA is 0.7x 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.
Shenguan Holdings Group Ltd ($829) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,502 | 1,648 | 1,654 | 1,403 | 1,055 | -24.8% |
| Gross Profit | 930 | 959 | 967 | 770 | 466 | -39.5% |
| SG&A | 124 | 102 | 100 | 117 | 147 | 25.4% |
| EBITDA | 859 | 968 | 979 | 765 | 459 | -39.9% |
| Net Income | 689 | 748 | 771 | 547 | 291 | -46.8% |
Balance Sheet
|
|---|
| Cash | 488 | 720 | 641 | 400 | 211 | -47.2% |
| Short Term Debt | 43 | 167 | 200 | 783 | 545 | -30.5% |
| Long Term Debt | 20 | 60 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 235 | 349 | 208 | 45 | 129 | 185.0% |
Ratios
|
|---|
| Revenue growth | 30.3% | 9.8% | 0.4% | -15.2% | -24.8% | |
| EBITDA growth | 30.5% | 12.7% | 1.1% | -21.9% | -39.9% | |
| Gross Margin | 61.9% | 58.2% | 58.5% | 54.9% | 44.2% | -10.7% |
| EBITDA Margin | 57.2% | 58.7% | 59.2% | 54.5% | 43.6% | -10.9% |
| Net Income Margin | 45.9% | 45.4% | 46.6% | 39.0% | 27.6% | -11.4% |
| SG&A, % of revenue | 8.3% | 6.2% | 6.0% | 8.4% | 14.0% | 5.6% |
| CAPEX, % of revenue | 15.7% | 21.2% | 12.5% | 3.2% | 12.2% | 9.0% |
| ROIC | 40.6% | 40.0% | 33.2% | 21.4% | 10.0% | -11.4% |
| ROE | 36.8% | 35.2% | 30.9% | 20.7% | 10.8% | -10.0% |
| Net Debt/EBITDA | -0.5x | -0.5x | -0.5x | 0.5x | 0.7x | 0.2x |
Revenue and profitability
Shenguan Holdings Group Ltd's Revenue dropped on 24.8% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 10.9 pp from 54.5% to 43.6% in 2015.
Gross Margin dropped on 10.7 pp from 54.9% to 44.2% in 2015. SG&A as a % of Revenue increased on 5.6 pp from 8.4% to 14.0% in 2015.
Net Income marign dropped on 11.4 pp from 39.0% to 27.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 12.2% in 2015. CAPEX/Revenue decreased on 9.0 pp from 21.2% in 2012 to 12.2% in 2015. It's average CAPEX/Revenue for the last three years was 9.3%.
Return on investment
The company operates at low ROIC (9.99%) and ROE (10.76%). ROIC dropped on 11.4 pp from 21.4% to 10.0% in 2015. ROE decreased on 10.0 pp from 20.7% to 10.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 1.2x. Net Debt / EBITDA jumped on 0.2x from 0.5x to 0.7x in 2015. Debt dropped on 30.5% in 2015 while cash dropped on 47.2% in 2015.
Appendix 1: Peers in Food
Below you can find Shenguan Holdings Group Ltd benchmarking vs. other companies in Food 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 |
|---|
| Wealth Glory Holdings Ltd ($8269) | | -16.5% | -53.8% | 555.7% | -12.4% |
| Natural Dairy NZ Holdings Ltd ($462) | 12.0% | -47.2% | 19.1% | 76.6% | |
| China Modern Dairy Holdings Ltd ($1117) | 88.8% | 50.7% | 96.1% | 52.8% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | | 256.3% | 91.5% | 38.3% | 11.1% |
| Asia Cassava Resources Holdings Ltd ($841) | | -3.0% | 99.6% | 32.6% | -28.4% |
| |
|---|
| Median (37 companies) | 22.4% | 9.4% | 6.4% | 2.7% | -3.2% |
|---|
| Shenguan Holdings Group Ltd ($829) | | 9.8% | 0.4% | -15.2% | -24.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 42.2% | 57.2% | 59.0% | 57.8% | |
| Yashili International Holdings Ltd ($1230) | 52.0% | 53.7% | 53.5% | 51.2% | |
| Natural Dairy NZ Holdings Ltd ($462) | 16.3% | -13.7% | 27.5% | 48.8% | |
| Christine International Holdings Ltd ($1210) | 51.3% | 50.2% | 49.7% | 47.2% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 34.5% | 37.8% | 42.6% | 45.7% | |
| |
|---|
| Median (37 companies) | 17.7% | 16.5% | 18.5% | 19.8% | 17.3% |
|---|
| Shenguan Holdings Group Ltd ($829) | 61.9% | 58.2% | 58.5% | 54.9% | 44.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| YuanShengTai Dairy Farm Ltd ($1431) | 147.8% | 40.3% | 48.4% | 47.1% | |
| China Huishan Dairy Holdings Co Ltd ($6863) | 109.2% | 45.1% | 47.9% | 47.1% | 37.2% |
| Honworld Group Ltd ($2226) | 28.4% | 44.4% | 42.1% | 42.0% | |
| China Modern Dairy Holdings Ltd ($1117) | 33.9% | 33.5% | 27.0% | 25.3% | |
| Want Want China Holdings Ltd ($151) | 20.1% | 23.8% | 25.8% | 23.8% | 25.2% |
| |
|---|
| Median (37 companies) | 8.5% | 7.8% | 6.5% | 7.4% | 6.5% |
|---|
| Shenguan Holdings Group Ltd ($829) | 57.2% | 58.7% | 59.2% | 54.5% | 43.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Huishan Dairy Holdings Co Ltd ($6863) | 453.6% | 98.2% | 29.8% | 132.0% | 109.8% |
| Honworld Group Ltd ($2226) | 25.3% | 6.0% | 10.8% | 50.8% | |
| YuanShengTai Dairy Farm Ltd ($1431) | 182.5% | 26.1% | 18.3% | 43.4% | |
| Yashili International Holdings Ltd ($1230) | 3.6% | 8.2% | 7.1% | 20.1% | |
| Vedan International Holdings Ltd ($2317) | 2.8% | 2.5% | 2.4% | 18.8% | |
| |
|---|
| Median (37 companies) | 3.6% | 5.9% | 5.6% | 5.1% | 3.0% |
|---|
| Shenguan Holdings Group Ltd ($829) | 15.7% | 21.2% | 12.5% | 3.2% | 12.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Honworld Group Ltd ($2226) | 22.1% | 50.4% | 44.5% | 23.6% | |
| Want Want China Holdings Ltd ($151) | 24.9% | 27.9% | 29.4% | 22.8% | 21.8% |
| Huisheng International Holdings Ltd ($1340) | 63.0% | 31.9% | 23.7% | 16.3% | |
| Asia Cassava Resources Holdings Ltd ($841) | 13.8% | 4.2% | 5.9% | 13.6% | 11.6% |
| Tenwow International Holdings Ltd ($1219) | 20.3% | 19.7% | 15.7% | 12.8% | |
| |
|---|
| Median (38 companies) | 10.4% | 6.7% | 5.9% | 5.5% | 5.3% |
|---|
| Shenguan Holdings Group Ltd ($829) | 40.6% | 40.0% | 33.2% | 21.4% | 10.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Yurun Food Group Ltd ($1068) | 0.4x | 40.7x | 6.9x | 9.4x | |
| Beijing Jingkelong Co Ltd ($814) | 3.4x | 5.0x | 4.8x | 5.3x | |
| CP Lotus Corp ($121) | 2.3x | | 6.5x | 5.1x | 3.0x |
| DaChan Food Asia Ltd ($3999) | -0.3x | 0.1x | 1.3x | 4.8x | |
| First Pacific Co Ltd/Hong Kong ($142) | 1.3x | 1.8x | 3.8x | 4.5x | |
| |
|---|
| Median (29 companies) | 0.2x | -0.3x | 0.8x | 0.8x | 1.7x |
|---|
| Shenguan Holdings Group Ltd ($829) | -0.5x | -0.5x | -0.5x | 0.5x | 0.7x |
