Shanghai Prime Machinery Co Ltd EBITDA surged on 83.6% in 2015 and Revenue surged on 52.8%
20/03/2016 • About Shanghai Prime Machinery Co Ltd (
$2345) • By InTwits
Shanghai Prime Machinery Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.2% in 2015 vs. 7.7% in 2014 vs. 9.6% in 2011
- Shanghai Prime Machinery Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: 253 in 2015, 196 in 2014, 146 in 2013, 158 in 2012, 382 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.8%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shanghai Prime Machinery Co Ltd ($2345) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,634 | 3,729 | 3,398 | 4,665 | 7,127 | 52.8% |
| Gross Profit | 702 | 677 | 652 | 934 | 1,488 | 59.4% |
| SG&A | 429 | 480 | 466 | 710 | 933 | 31.4% |
| EBITDA | 349 | 290 | 304 | 359 | 658 | 83.6% |
| Net Income | 218 | 99 | 67 | 81 | 186 | 130.4% |
Balance Sheet
|
|---|
| Cash | 867 | 1,284 | 885 | 1,035 | 909 | -12.2% |
| Short Term Debt | 471 | 630 | 469 | 647 | 191 | -70.5% |
| Long Term Debt | 380 | 493 | 495 | 2,534 | 2,837 | 11.9% |
Cash flow
|
|---|
| Capex | 382 | 158 | 146 | 196 | 253 | 29.5% |
Ratios
|
|---|
| Revenue growth | 30.3% | 2.6% | -8.9% | 37.3% | 52.8% | |
| EBITDA growth | 23.9% | -17.0% | 4.8% | 18.1% | 83.6% | |
| Gross Margin | 19.3% | 18.2% | 19.2% | 20.0% | 20.9% | 0.9% |
| EBITDA Margin | 9.6% | 7.8% | 8.9% | 7.7% | 9.2% | 1.6% |
| Net Income Margin | 6.0% | 2.7% | 2.0% | 1.7% | 2.6% | 0.9% |
| SG&A, % of revenue | 11.8% | 12.9% | 13.7% | 15.2% | 13.1% | -2.1% |
| CAPEX, % of revenue | 10.5% | 4.2% | 4.3% | 4.2% | 3.6% | -0.6% |
| ROIC | 5.4% | 2.5% | 2.8% | 2.5% | 5.8% | 3.2% |
| ROE | 7.1% | 3.1% | 2.1% | 2.5% | 5.9% | 3.4% |
| Net Debt/EBITDA | -0.0x | -0.6x | 0.3x | 6.0x | 3.2x | -2.8x |
Revenue and profitability
Shanghai Prime Machinery Co Ltd's Revenue jumped on 52.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.2 pp from -1.4% to -15.6% in 2015.
Gross Margin increased slightly on 0.86 pp from 20.0% to 20.9% in 2015. SG&A as a % of Revenue decreased on 2.1 pp from 15.2% to 13.1% in 2015.
Net Income marign increased slightly on 0.88 pp from 1.7% to 2.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Shanghai Prime Machinery Co Ltd had CAPEX/Revenue of 3.6%. The company's CAPEX/Revenue decreased slightly on 0.68 pp from 4.2% in 2012 to 3.6% in 2015. It's average CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at low ROIC (5.75%) and ROE (5.90%). ROIC increased on 3.2 pp from 2.5% to 5.8% in 2015. ROE increased on 3.4 pp from 2.5% to 5.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 4.6x. Net Debt / EBITDA dropped on 2.8x from 6.0x to 3.2x in 2015. Debt decreased on 4.8% in 2015 while cash dropped on 12.2% in 2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find Shanghai Prime Machinery Co Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Sun East Technology Holdings Ltd ($365) | | -25.1% | -10.7% | 39.3% | 6.4% |
| Sinoref Holdings Ltd ($1020) | 1.5% | -0.2% | -42.2% | 29.2% | |
| North Asia Strategic Holdings Ltd ($8080) | | -52.2% | -29.1% | 23.7% | 42.6% |
| Huazhang Technology Holding Ltd ($1673) | | 131.6% | 9.5% | 22.9% | 23.5% |
| Asia Tele-Net & Technology Corp Ltd ($679) | 3.5% | -36.9% | 23.0% | 18.6% | |
| |
|---|
| Median (22 companies) | 13.0% | -5.2% | -3.3% | -0.7% | 1.7% |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | | 2.6% | -8.9% | 37.3% | 52.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 38.3% | 49.1% | 51.7% | 54.9% | |
| Renheng Enterprise Holdings Ltd ($3628) | 36.4% | 44.3% | 44.8% | 45.4% | |
| Haitian International Holdings Ltd ($1882) | 29.7% | 30.1% | 31.6% | 32.4% | 33.0% |
| CHTC Fong's Industries Co Ltd ($641) | 26.5% | 24.4% | 30.0% | 32.3% | |
| Huazhang Technology Holding Ltd ($1673) | 29.0% | 28.0% | 28.5% | 27.9% | 24.7% |
| |
|---|
| Median (22 companies) | 24.0% | 24.1% | 22.1% | 18.6% | 20.0% |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 19.3% | 18.2% | 19.2% | 20.0% | 20.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 18.5% | 24.0% | 26.9% | 28.0% | |
| Haitian International Holdings Ltd ($1882) | 20.5% | 19.7% | 20.7% | 21.9% | 22.8% |
| Renheng Enterprise Holdings Ltd ($3628) | 22.9% | 24.7% | 23.9% | 20.7% | |
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | |
| Huazhang Technology Holding Ltd ($1673) | 3.1% | 11.6% | 11.2% | 12.5% | 11.3% |
| |
|---|
| Median (22 companies) | 8.7% | 9.8% | 8.5% | 8.6% | 4.0% |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 9.6% | 7.8% | 8.9% | 7.7% | 9.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China High Precision Automation Group Ltd ($591) | 33.0% | 20.5% | 9.1% | 18.4% | 0.6% |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 14.9% | 20.5% | 20.3% | 11.6% | |
| LK Technology Holdings Ltd ($558) | 7.6% | 9.3% | 10.2% | 9.1% | 5.6% |
| First Tractor Co Ltd ($38) | 6.3% | 4.9% | 4.3% | 7.3% | |
| Greens Holdings Ltd ($1318) | 9.3% | 8.9% | 3.1% | 7.1% | |
| |
|---|
| Median (22 companies) | 5.7% | 4.2% | 3.4% | 4.0% | 1.9% |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 10.5% | 4.2% | 4.3% | 4.2% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Haitian International Holdings Ltd ($1882) | 26.8% | 19.8% | 21.2% | 19.4% | 16.3% |
| Jingwei Textile Machinery ($350) | 23.3% | 19.4% | 20.9% | 17.4% | |
| Huazhang Technology Holding Ltd ($1673) | | 29.6% | 16.2% | 16.3% | 16.2% |
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | |
| China CNR Corp Ltd ($6199) | 11.1% | 7.9% | 9.3% | 10.6% | |
| |
|---|
| Median (22 companies) | 9.9% | 7.5% | 4.2% | 2.8% | 1.7% |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 5.4% | 2.5% | 2.8% | 2.5% | 5.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First Tractor Co Ltd ($38) | 1.1x | 0.5x | 2.5x | 9.2x | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.9x | 3.0x | 11.4x | 5.6x | |
| Honghua Group Ltd ($196) | 0.1x | 1.2x | 3.2x | 5.2x | |
| LK Technology Holdings Ltd ($558) | 0.9x | 2.5x | 5.1x | 4.9x | 4.6x |
| CHTC Fong's Industries Co Ltd ($641) | 3.4x | | 2.2x | 2.5x | |
| |
|---|
| Median (18 companies) | -0.6x | -1.6x | -1.5x | -0.5x | -0.5x |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | -0.0x | -0.6x | 0.3x | 6.0x | 3.2x |
