Sinopec Kantons Holdings Ltd reports 90.1% revenue decline in 2015 and 57.3 pp EBITDA Margin growth from 6.6% to 63.8%
22/03/2016 • About Sinopec Kantons Holdings Ltd (
$934) • By InTwits
Sinopec Kantons Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sinopec Kantons Holdings Ltd is a company in decline: 2015 revenue growth was -90.1%, 5 years revenue CAGR was -34.2%
- EBITDA Margin is quite volatile: 63.8% in 2015, 6.6% in 2014, 0.9% in 2013, 1.5% in 2012, 2.1% in 2011
- Sinopec Kantons Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 5.6%.
- CAPEX is quite volatile: 322 in 2015, 1,379 in 2014, 395 in 2013, 177 in 2012, 60.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sinopec Kantons Holdings Ltd ($934) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 19,685 | 22,042 | 23,356 | 20,670 | 2,044 | -90.1% |
| Gross Profit | 319 | 239 | 155 | 916 | 839 | -8.4% |
| SG&A | 81 | 75 | 132 | 176 | 164 | -6.8% |
| EBITDA | 412 | 336 | 218 | 1,358 | 1,305 | -3.9% |
| Net Income | 214 | 292 | 491 | 1,018 | 1,027 | 0.8% |
Balance Sheet
|
|---|
| Cash | 772 | 2,405 | 1,622 | 799 | 1,058 | 32.4% |
| Short Term Debt | 267 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 4,183 | 3,939 | -5.8% |
Cash flow
|
|---|
| Capex | 61 | 177 | 395 | 1,379 | 322 | -76.6% |
Ratios
|
|---|
| Revenue growth | 18.6% | 12.0% | 6.0% | -11.5% | -90.1% | |
| EBITDA growth | -5.5% | -18.3% | -35.1% | 521.5% | -3.9% | |
| Gross Margin | 1.6% | 1.1% | 0.7% | 4.4% | 41.1% | 36.6% |
| EBITDA Margin | 2.1% | 1.5% | 0.9% | 6.6% | 63.8% | 57.3% |
| Net Income Margin | 1.1% | 1.3% | 2.1% | 4.9% | 50.2% | 45.3% |
| SG&A, % of revenue | 0.4% | 0.3% | 0.6% | 0.9% | 8.0% | 7.2% |
| CAPEX, % of revenue | 0.3% | 0.8% | 1.7% | 6.7% | 15.8% | 9.1% |
| ROIC | 8.3% | 3.5% | 0.4% | 6.0% | 5.0% | -1.0% |
| ROE | 8.0% | 6.3% | 6.0% | 9.1% | 9.4% | 0.3% |
| Net Debt/EBITDA | -1.2x | -7.1x | -7.4x | 2.5x | 2.2x | -0.3x |
Revenue and profitability
The company's Revenue dropped on 90.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 57.3 pp from 6.6% to 63.8% in 2015.
Gross Margin jumped on 36.6 pp from 4.4% to 41.1% in 2015. SG&A as a % of Revenue increased on 7.2 pp from 0.85% to 8.0% in 2015.
Net Income marign surged on 45.3 pp from 4.9% to 50.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 15.8% in 2015. CAPEX/Revenue surged on 15.0 pp from 0.80% in 2012 to 15.8% in 2015. For the last three years the average CAPEX/Revenue was 8.0%.
Return on investment
The company operates at low ROIC (4.99%) and ROE (9.40%). ROIC decreased slightly on 1.0 pp from 6.0% to 5.0% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 3.0x. Net Debt / EBITDA dropped on 0.3x from 2.5x to 2.2x in 2015. Debt decreased on 5.8% in 2015 while cash jumped on 32.4% in 2015.
Appendix 1: Peers in Oil&Gas Services
Below you can find Sinopec Kantons Holdings Ltd benchmarking vs. other companies in Oil&Gas Services 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 |
|---|
| 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% | |
| Sinopec Engineering Group Co Ltd ($2386) | | 25.9% | 13.1% | 13.3% | -7.8% |
| |
|---|
| Median (12 companies) | 10.1% | 28.8% | 11.5% | 6.0% | -17.3% |
|---|
| Sinopec Kantons Holdings Ltd ($934) | | 12.0% | 6.0% | -11.5% | -90.1% |
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% | 13.5% |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 1.6% | 1.1% | 0.7% | 4.4% | 41.1% |
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) | 12.8% | 16.0% | 16.9% | 12.5% | 10.0% |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 2.1% | 1.5% | 0.9% | 6.6% | 63.8% |
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% | 6.9% | 3.7% |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 0.3% | 0.8% | 1.7% | 6.7% | 15.8% |
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% |
| Sinopec Engineering Group Co Ltd ($2386) | 59.6% | 77.5% | 33.3% | 18.6% | 15.3% |
| 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% | |
| |
|---|
| Median (12 companies) | 8.6% | 11.8% | 12.2% | 10.2% | 5.0% |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 8.3% | 3.5% | 0.4% | 6.0% | 5.0% |
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 |
| Jutal Offshore Oil Services Ltd ($3303) | 1.0x | 0.4x | 1.7x | 1.8x | |
| |
|---|
| Median (11 companies) | 0.2x | 0.1x | -0.0x | 1.8x | 3.3x |
|---|
| Sinopec Kantons Holdings Ltd ($934) | -1.2x | -7.1x | -7.4x | 2.5x | 2.2x |
