Sinopec Engineering Group Co Ltd EBITDA decreased on 8.8% in 2015 and EBITDA Margin showed almost no change
21/03/2016 • About Sinopec Engineering Group Co Ltd (
$2386) • By InTwits
Sinopec Engineering Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sinopec Engineering Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 262 in 2015, 470 in 2014, 413 in 2013, 1,345 in 2012, 360 in 2011
- The company has highly profitable business model: ROIC is at 15.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sinopec Engineering Group Co Ltd ($2386) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 30,601 | 38,526 | 43,572 | 49,346 | 45,498 | -7.8% |
| Gross Profit | 5,074 | 5,528 | 6,406 | 6,291 | 6,157 | -2.1% |
| SG&A | 829 | 967 | 1,076 | 1,114 | 1,140 | 2.3% |
| EBITDA | 4,103 | 4,537 | 5,168 | 4,646 | 4,238 | -8.8% |
| Net Income | 3,375 | 3,317 | 3,657 | 3,490 | 3,318 | -4.9% |
Balance Sheet
|
|---|
| Cash | 5,575 | 4,822 | 5,514 | 9,182 | 11,406 | 24.2% |
| Short Term Debt | 49 | 157 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 360 | 1,345 | 413 | 470 | 262 | -44.3% |
Ratios
|
|---|
| Revenue growth | 2.4% | 25.9% | 13.1% | 13.3% | -7.8% | |
| EBITDA growth | 7.6% | 10.6% | 13.9% | -10.1% | -8.8% | |
| Gross Margin | 16.6% | 14.3% | 14.7% | 12.7% | 13.5% | 0.8% |
| EBITDA Margin | 13.4% | 11.8% | 11.9% | 9.4% | 9.3% | -0.1% |
| Net Income Margin | 11.0% | 8.6% | 8.4% | 7.1% | 7.3% | 0.2% |
| SG&A, % of revenue | 2.7% | 2.5% | 2.5% | 2.3% | 2.5% | 0.2% |
| CAPEX, % of revenue | 1.2% | 3.5% | 0.9% | 1.0% | 0.6% | -0.4% |
| ROIC | 59.6% | 77.5% | 33.3% | 18.6% | 15.3% | -3.4% |
| ROE | 57.4% | 67.6% | 26.1% | 15.9% | 14.0% | -2.0% |
| Net Debt/EBITDA | -1.3x | -1.0x | -1.1x | -2.0x | -2.7x | -0.7x |
Revenue and profitability
The company's Revenue decreased on 7.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 4.0% to 4.9% in 2015.
Gross Margin increased slightly on 0.78 pp from 12.7% to 13.5% 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 0.58%. Sinopec Engineering Group Co Ltd showed decline in CAPEX/Revenue of 2.9 pp from 3.5% in 2012 to 0.58% in 2015. Average CAPEX/Revenue for the last three years was 0.83%.
Return on investment
The company operates at good ROIC (15.26%) and ROE (13.97%). ROIC decreased on 3.4 pp from 18.6% to 15.3% in 2015. ROE decreased slightly on 2.0 pp from 15.9% to 14.0% in 2015.
Leverage (Debt)
The company has no debt. Cash surged on 24.2% in 2015.
Appendix 1: Peers in Oil&Gas Services
Below we provide Sinopec Engineering Group Co Ltd benchmarking against other companies in Oil&Gas 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 |
|---|
| Yuan Heng Gas Holdings Ltd ($332) | | 196.3% | 207.4% | 105.9% | -36.4% |
| CIMC Enric Holdings Ltd ($3899) | | 18.4% | -0.3% | 39.7% | -26.9% |
| 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% | |
| Jutal Offshore Oil Services Ltd ($3303) | 15.3% | 23.4% | 46.2% | 6.9% | |
| |
|---|
| Median (12 companies) | 15.3% | 27.6% | 9.1% | 0.5% | -26.9% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | | 25.9% | 13.1% | 13.3% | -7.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hilong Holding Ltd ($1623) | 41.0% | 39.5% | 40.3% | 39.6% | 32.6% |
| 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% | 18.6% |
| |
|---|
| Median (9 companies) | 20.3% | 19.5% | 20.4% | 18.8% | 16.0% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 16.6% | 14.3% | 14.7% | 12.7% | 13.5% |
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% | 42.7% |
| China Oilfield Services Ltd ($2883) | 43.7% | 39.8% | 40.0% | 37.0% | |
| Hilong Holding Ltd ($1623) | 28.5% | 25.9% | 27.8% | 28.8% | 22.7% |
| SPT Energy Group Inc ($1251) | 24.7% | 23.8% | 19.8% | 14.1% | -36.0% |
| TSC Group Holdings Ltd ($206) | 11.7% | 11.4% | 14.0% | 13.2% | |
| |
|---|
| Median (12 companies) | 12.0% | 16.0% | 16.9% | 12.5% | 10.6% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 13.4% | 11.8% | 11.9% | 9.4% | 9.3% |
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% | |
| Hilong Holding Ltd ($1623) | 17.1% | 16.7% | 18.9% | 48.1% | 9.6% |
| 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% | |
| |
|---|
| Median (12 companies) | 6.8% | 10.0% | 6.3% | 7.3% | 4.8% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 1.2% | 3.5% | 0.9% | 1.0% | 0.6% |
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% | 8.9% |
| Hilong Holding Ltd ($1623) | 19.0% | 15.5% | 14.8% | 12.0% | 6.0% |
| 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% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 59.6% | 77.5% | 33.3% | 18.6% | 15.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hans Energy Co Ltd ($554) | | 14.0x | 11.9x | 12.9x | 11.3x |
| 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 |
| Hilong Holding Ltd ($1623) | 0.8x | 0.9x | 1.1x | 2.6x | 3.3x |
| Sinopec Kantons Holdings Ltd ($934) | -1.2x | -7.1x | -7.4x | 2.5x | |
| |
|---|
| Median (11 companies) | 0.2x | 0.1x | -0.0x | 1.8x | 6.1x |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | -1.3x | -1.0x | -1.1x | -2.0x | -2.7x |
