Shenzhen Expressway Co Ltd EBITDA dropped on 34.7% in 2015 and Revenue decreased on 5.5%
18/03/2016 • About Shenzhen Expressway Co Ltd (
$548) • By InTwits
Shenzhen Expressway Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shenzhen Expressway Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.2%. At the same time it's a lot of higher than industry average of 8.6%.
- CAPEX is quite volatile: 128 in 2015, 313 in 2014, 611 in 2013, 545 in 2012, 873 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.7%
- It operates with high leverage: Net Debt/EBITDA is 0.3x while industry average is -21.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shenzhen Expressway Co Ltd ($548) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,846 | 3,022 | 3,163 | 3,489 | 3,298 | -5.5% |
| Gross Profit | 1,664 | 1,511 | 1,637 | 1,784 | 1,619 | -9.2% |
| SG&A | 81 | 74 | 80 | 86 | 141 | 63.6% |
| EBITDA | 2,288 | 2,245 | 2,511 | 2,674 | 1,747 | -34.7% |
| Net Income | 875 | 685 | 720 | 2,187 | 1,553 | -29.0% |
Balance Sheet
|
|---|
| Cash | 2,168 | 1,954 | 1,091 | 1,255 | 6,181 | 392.4% |
| Short Term Debt | 949 | 2,540 | 1,071 | 1,046 | 1,836 | 75.5% |
| Long Term Debt | 10,254 | 8,299 | 8,346 | 7,189 | 4,892 | -32.0% |
Cash flow
|
|---|
| Capex | 873 | 545 | 611 | 313 | 128 | -59.0% |
Ratios
|
|---|
| Revenue growth | 6.5% | 6.2% | 4.7% | 10.3% | -5.5% | |
| EBITDA growth | 17.5% | -1.9% | 11.8% | 6.5% | -34.7% | |
| Gross Margin | 58.5% | 50.0% | 51.8% | 51.1% | 49.1% | -2.0% |
| EBITDA Margin | 80.4% | 74.3% | 79.4% | 76.6% | 53.0% | -23.7% |
| Net Income Margin | 30.7% | 22.7% | 22.8% | 62.7% | 47.1% | -15.6% |
| SG&A, % of revenue | 2.9% | 2.4% | 2.5% | 2.5% | 4.3% | 1.8% |
| CAPEX, % of revenue | 30.7% | 18.1% | 19.3% | 9.0% | 3.9% | -5.1% |
| ROIC | 7.3% | 6.3% | 7.0% | 7.7% | 3.7% | -4.0% |
| ROE | 9.8% | 7.3% | 7.4% | 20.1% | 12.8% | -7.2% |
| Net Debt/EBITDA | 3.9x | 4.0x | 3.3x | 2.6x | 0.3x | -2.3x |
Revenue and profitability
The company's Revenue decreased on 5.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.7 pp from 76.6% to 53.0% in 2015.
Gross Margin decreased on 2.0 pp from 51.1% to 49.1% in 2015. SG&A as a % of Revenue increased slightly on 1.8 pp from 2.5% to 4.3% in 2015.
Net Income marign dropped on 15.6 pp from 62.7% to 47.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.9%. Shenzhen Expressway Co Ltd's CAPEX/Revenue dropped on 14.2 pp from 18.1% in 2012 to 3.9% in 2015. For the last three years the average CAPEX/Revenue was 10.7%.
Return on investment
The company operates at good ROE (12.85%) while ROIC is low (3.72%). ROIC decreased on 4.0 pp from 7.7% to 3.7% in 2015. ROE decreased on 7.2 pp from 20.1% to 12.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 3.9x. Net Debt / EBITDA dropped on 2.3x from 2.6x to 0.3x in 2015. Debt dropped on 18.3% in 2015 while cash surged on 392% in 2015.
Appendix 1: Peers in Commercial Services
Below we provide Shenzhen Expressway Co Ltd benchmarking against other companies in Commercial Services 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 |
|---|
| Global Energy Resources International Group Ltd ($8192) | 429.3% | -61.9% | -27.8% | 2,912.9% | |
| Dingyi Group Investment Ltd ($508) | | 8.8% | -95.9% | 1,361.2% | -32.6% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Goldpac Group Ltd ($3315) | | 52.3% | 64.4% | 36.8% | 10.8% |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | | 21.3% | 4.5% | 33.5% | 14.2% |
| |
|---|
| Median (60 companies) | 19.5% | 8.9% | 4.7% | 8.0% | 10.1% |
|---|
| Shenzhen Expressway Co Ltd ($548) | | 6.2% | 4.7% | 10.3% | -5.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| China Communication Telecom Services Co Ltd ($8206) | -56.6% | 61.6% | 58.6% | 69.1% | 70.2% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 67.1% | 66.2% | 66.8% | 62.8% | 65.2% |
| |
|---|
| Median (56 companies) | 32.9% | 31.0% | 29.2% | 30.8% | 28.7% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 58.5% | 50.0% | 51.8% | 51.1% | 49.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| Anhui Expressway Co Ltd ($995) | 62.7% | 56.9% | 54.1% | 60.4% | |
| Dragon Crown Group Holdings Ltd ($935) | 57.8% | 67.3% | 62.9% | 60.2% | |
| Jiangsu Expressway Co Ltd ($177) | 60.8% | 57.0% | 60.7% | 59.3% | |
| |
|---|
| Median (60 companies) | 16.4% | 16.0% | 13.4% | 10.9% | 6.7% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 80.4% | 74.3% | 79.4% | 76.6% | 53.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 16.8% | 3.9% | 7.0% | 59.8% | |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | |
| Finet Group Ltd ($8317) | 3.9% | 10.3% | 9.1% | 26.0% | 8.4% |
| HC International Inc ($2280) | 15.1% | 8.5% | 28.7% | 24.7% | |
| Dragon Crown Group Holdings Ltd ($935) | 2.5% | 37.2% | 52.0% | 23.0% | |
| |
|---|
| Median (59 companies) | 3.8% | 3.2% | 4.0% | 4.0% | 2.5% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 30.7% | 18.1% | 19.3% | 9.0% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mega Expo Holdings Ltd ($1360) | | 270.5% | 481.1% | 54.4% | 10.1% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| PPS International Holdings Ltd ($8201) | | 101.6% | 35.6% | 23.8% | -13.7% |
| 1010 Printing Group Ltd ($1127) | 14.4% | 13.5% | 20.8% | 17.8% | 19.9% |
| |
|---|
| Median (60 companies) | 5.0% | 5.9% | 4.2% | 3.2% | 6.0% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 7.3% | 6.3% | 7.0% | 7.7% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | |
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | |
| Anxian Yuan China Holdings Ltd ($922) | | | 4.6x | 3.8x | 0.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| |
|---|
| Median (39 companies) | -0.1x | -0.1x | -0.8x | -1.0x | -2.0x |
|---|
| Shenzhen Expressway Co Ltd ($548) | 3.9x | 4.0x | 3.3x | 2.6x | 0.3x |
