Huaneng Power International Inc Net Income surged on 13.2% in 2015 and EBITDA Margin increased on 4.2 pp from 29.8% to 34.0%
22/03/2016 • About Huaneng Power International Inc (
$902) • By InTwits
Huaneng Power International Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 34.0% in 2015 vs. 29.8% in 2014 vs. 15.7% in 2011
- Huaneng Power International Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.9%. At the same time it's a lot of higher than industry average of 0.9%.
- CAPEX is quite volatile: 2,419 in 2015, 6,258 in 2014, 4,577 in 2013, 1,703 in 2012, 1,601 in 2011
- The company has business model with average profitability: ROIC is at 10.9%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huaneng Power International Inc ($902) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 132,937 | 133,295 | 132,789 | 138,978 | 127,747 | -8.1% |
| Gross Profit | | | | 34,446 | 36,226 | 5.2% |
| SG&A | | | | 3,733 | 3,696 | -1.0% |
| EBITDA | 20,843 | 28,213 | 35,657 | 41,455 | 43,427 | 4.8% |
| Net Income | 1,181 | 5,512 | 10,426 | 12,183 | 13,786 | 13.2% |
Balance Sheet
|
|---|
| Cash | 8,553 | 10,505 | 9,307 | 13,021 | 7,478 | -42.6% |
| Short Term Debt | 69,378 | 71,949 | 71,560 | 81,503 | 94,556 | 16.0% |
| Long Term Debt | 97,700 | 95,545 | 84,356 | 94,721 | 78,193 | -17.4% |
Cash flow
|
|---|
| Capex | 16,742 | 15,556 | 17,697 | 25,044 | 24,334 | -2.8% |
Ratios
|
|---|
| Revenue growth | 27.6% | 0.3% | -0.4% | 4.7% | -8.1% | |
| EBITDA growth | 8.2% | 35.4% | 26.4% | 16.3% | 4.8% | |
| Gross Margin | | | | 24.8% | 28.4% | 3.6% |
| EBITDA Margin | 15.7% | 21.2% | 26.9% | 29.8% | 34.0% | 4.2% |
| Net Income Margin | 0.9% | 4.1% | 7.9% | 8.8% | 10.8% | 2.0% |
| SG&A, % of revenue | | | | 2.7% | 2.9% | 0.2% |
| CAPEX, % of revenue | 12.6% | 11.7% | 13.3% | 18.0% | 19.0% | 1.0% |
| ROIC | 4.0% | 7.3% | 10.3% | 11.3% | 10.9% | -0.4% |
| ROE | 2.3% | 10.3% | 17.6% | 17.7% | 17.9% | 0.1% |
| Net Debt/EBITDA | 7.6x | 5.6x | 4.1x | 3.9x | 3.8x | -0.1x |
Revenue and profitability
The company's Revenue decreased on 8.1% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.2 pp from 29.8% to 34.0% in 2015.
Gross Margin increased on 3.6 pp from 24.8% to 28.4% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 2.0 pp from 8.8% to 10.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Huaneng Power International Inc had CAPEX/Revenue of 19.0%. CAPEX/Revenue increased on 7.4 pp from 11.7% in 2012 to 19.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 16.8%.Battling declining revenue the company invested a large share of EBITDA (56.0%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at good ROE (17.86%) while ROIC is low (10.90%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.8x and Debt / EBITDA is 4.0x. Net Debt / EBITDA dropped on 0.1x from 3.9x to 3.8x in 2015. Debt decreased slightly on 2.0% in 2015 while cash dropped on 42.6% in 2015.
Appendix 1: Peers in Electric
Below you can find Huaneng Power International Inc benchmarking vs. other companies in Electric 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 |
|---|
| Tianjin Development Hldgs Ltd ($882) | 9.1% | 10.6% | 27.3% | 37.6% | |
| CGN Meiya Power Holdings Co Ltd ($1811) | | 23.4% | 11.2% | 30.8% | -16.5% |
| Enerchina Holdings Ltd ($622) | | -15.4% | 6.8% | 28.5% | -3.5% |
| Amber Energy Ltd ($90) | | -14.7% | 21.2% | 20.1% | -56.4% |
| CGN Power Co Ltd ($1816) | | 10.7% | -1.2% | 19.3% | 12.3% |
| |
|---|
| Median (16 companies) | 14.2% | 8.8% | 11.6% | 6.1% | -8.0% |
|---|
| Huaneng Power International Inc ($902) | | 0.3% | -0.4% | 4.7% | -8.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 60.5% | 60.0% | 63.5% | 85.6% | 99.4% |
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% |
| CGN Power Co Ltd ($1816) | 48.3% | 46.5% | 46.9% | 48.6% | 47.9% |
| Huadian Power International Corp Ltd ($1071) | 8.9% | | | 27.1% | |
| |
|---|
| Median (7 companies) | 48.3% | 46.5% | 52.8% | 48.6% | 50.8% |
|---|
| Huaneng Power International Inc ($902) | | | | 24.8% | 28.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | 71.2% |
| Huaneng Renewables Corp Ltd ($958) | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% |
| China Datang Corp Renewable Power Co Ltd ($1798) | 100.2% | 90.5% | 82.8% | 87.0% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
| CGN Power Co Ltd ($1816) | 64.2% | 66.0% | 62.6% | 60.5% | 59.4% |
| |
|---|
| Median (16 companies) | 25.3% | 30.3% | 36.4% | 38.2% | 39.0% |
|---|
| Huaneng Power International Inc ($902) | 15.7% | 21.2% | 26.9% | 29.8% | 34.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% |
| China Power New Energy Development Co Ltd ($735) | 21.5% | 82.2% | 80.1% | 119.5% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 273.4% | 157.1% | 81.7% | 106.3% | |
| CGN Power Co Ltd ($1816) | 78.4% | 47.5% | 57.2% | 94.5% | 50.0% |
| Huadian Fuxin Energy Corp Ltd ($816) | 78.6% | 62.2% | 54.3% | 91.8% | |
| |
|---|
| Median (16 companies) | 24.3% | 29.6% | 28.3% | 17.4% | 16.7% |
|---|
| Huaneng Power International Inc ($902) | 12.6% | 11.7% | 13.3% | 18.0% | 19.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 5.4% | 5.5% | 6.1% | 46.5% | 0.7% |
| Huadian Power International Corp Ltd ($1071) | 2.7% | 5.0% | 8.4% | 10.4% | |
| CLP Holdings Ltd ($2) | 7.8% | 7.0% | 4.8% | 8.5% | 12.8% |
| China Resources Power Holdings Co Ltd ($836) | 5.9% | 7.7% | 9.7% | 8.0% | 11.0% |
| China Power International Development Ltd ($2380) | 4.0% | 5.7% | 7.5% | 8.0% | |
| |
|---|
| Median (16 companies) | 5.2% | 5.2% | 6.0% | 6.0% | 5.3% |
|---|
| Huaneng Power International Inc ($902) | 4.0% | 7.3% | 10.3% | 11.3% | 10.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Datang Corp Renewable Power Co Ltd ($1798) | 8.1x | 9.1x | 8.2x | 8.7x | |
| CGN Power Co Ltd ($1816) | 4.7x | 6.5x | 6.7x | 7.8x | 8.4x |
| Amber Energy Ltd ($90) | 3.0x | 5.8x | 6.4x | 7.3x | 5.2x |
| Huaneng Renewables Corp Ltd ($958) | 6.0x | 7.7x | 6.6x | 7.3x | 7.1x |
| Huadian Fuxin Energy Corp Ltd ($816) | 9.3x | 6.9x | 6.2x | 6.5x | |
| |
|---|
| Median (15 companies) | 5.9x | 5.8x | 5.6x | 5.1x | 5.2x |
|---|
| Huaneng Power International Inc ($902) | 7.6x | 5.6x | 4.1x | 3.9x | 3.8x |
