Xingda International Holdings Ltd reports 47.0% Net Income decline and 5.6 pp EBITDA Margin decline from 19.1% to 13.6%
22/03/2016 • About Xingda International Holdings Ltd (
$1899) • By InTwits
Xingda International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Xingda International Holdings Ltd is a company in decline: 2015 revenue growth was -15.3%, 5 years revenue CAGR was -2.7%
- Xingda International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's in pair with industry average of 50.9%.
- CAPEX is quite volatile: 418 in 2015, 355 in 2014, 313 in 2013, 405 in 2012, 698 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Xingda International Holdings Ltd ($1899) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,551 | 5,247 | 5,585 | 5,595 | 4,737 | -15.3% |
| Gross Profit | 1,298 | 1,070 | 1,385 | 1,273 | 850 | -33.2% |
| SG&A | 573 | 580 | 626 | 634 | 657 | 3.6% |
| EBITDA | 1,200 | 909 | 1,237 | 1,070 | 643 | -40.0% |
| Net Income | 418 | 189 | 415 | 328 | 174 | -47.0% |
Balance Sheet
|
|---|
| Cash | 731 | 521 | 414 | 531 | 733 | 38.1% |
| Short Term Debt | 1,850 | 1,190 | 1,016 | 1,234 | 515 | -58.3% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 698 | 405 | 313 | 355 | 418 | 17.7% |
Ratios
|
|---|
| Revenue growth | 2.2% | -5.5% | 6.4% | 0.2% | -15.3% | |
| EBITDA growth | -19.8% | -24.3% | 36.2% | -13.5% | -40.0% | |
| Gross Margin | 23.4% | 20.4% | 24.8% | 22.8% | 17.9% | -4.8% |
| EBITDA Margin | 21.6% | 17.3% | 22.2% | 19.1% | 13.6% | -5.6% |
| Net Income Margin | 7.5% | 3.6% | 7.4% | 5.9% | 3.7% | -2.2% |
| SG&A, % of revenue | 10.3% | 11.1% | 11.2% | 11.3% | 13.9% | 2.5% |
| CAPEX, % of revenue | 12.6% | 7.7% | 5.6% | 6.4% | 8.8% | 2.5% |
| ROIC | 10.5% | 6.2% | 10.3% | 7.8% | 2.0% | -5.8% |
| ROE | 8.8% | 3.9% | 8.4% | 6.4% | 3.4% | -3.1% |
| Net Debt/EBITDA | 0.9x | 0.7x | 0.5x | 0.7x | -0.3x | -1.0x |
Revenue and profitability
Xingda International Holdings Ltd's Revenue dropped on 15.3% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.6 pp from 19.1% to 13.6% in 2015.
Gross Margin decreased on 4.8 pp from 22.8% to 17.9% in 2015. SG&A as a % of Revenue increased on 2.5 pp from 11.3% to 13.9% in 2015.
Net Income marign decreased on 2.2 pp from 5.9% to 3.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.8% in 2015. Xingda International Holdings Ltd's CAPEX/Revenue increased slightly on 1.1 pp from 7.7% in 2012 to 8.8% in 2015. Average CAPEX/Revenue for the last three years was 6.9%.Xingda International Holdings Ltd invested a big chunk of EBITDA (65.1%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (1.99%) and ROE (3.37%). ROIC decreased on 5.8 pp from 7.8% to 2.0% in 2015. ROE decreased on 3.1 pp from 6.4% to 3.4% in 2015.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 0.7x to -0.3x in 2015. Debt dropped on 58.3% in 2015 while cash jumped on 38.1% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Xingda International Holdings Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| Pan Asia Mining Ltd ($8173) | | 3,079.7% | -17.1% | 48.9% | -97.4% |
| CAA Resources Ltd ($2112) | | 99.6% | 103.2% | 38.0% | 261.2% |
| Tiangong International Co Ltd ($826) | 32.5% | 0.2% | 8.9% | 33.5% | |
| Da Ming International Holdings Ltd ($1090) | 33.1% | -2.1% | 29.3% | 29.8% | |
| Xiwang Special Steel Co Ltd ($1266) | 58.5% | -19.3% | 2.0% | 22.9% | |
| |
|---|
| Median (19 companies) | 33.1% | -9.7% | -1.1% | -6.0% | -16.0% |
|---|
| Xingda International Holdings Ltd ($1899) | | -5.5% | 6.4% | 0.2% | -15.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 51.1% | 47.4% | 50.7% | 39.6% | |
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | |
| Vale SA ($6210) | 58.4% | 45.4% | 48.3% | 33.1% | 19.6% |
| China Metal International Holdings Inc ($319) | 21.0% | 20.9% | 24.3% | 24.8% | |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | |
| |
|---|
| Median (19 companies) | 18.6% | 14.8% | 12.7% | 11.3% | 9.6% |
|---|
| Xingda International Holdings Ltd ($1899) | 23.4% | 20.4% | 24.8% | 22.8% | 17.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 46.5% | 39.7% | 36.2% | 31.3% | |
| China Hanking Holdings Ltd ($3788) | 63.1% | 40.4% | 40.9% | 30.6% | |
| Vale SA ($6210) | 55.9% | 24.2% | 40.8% | 30.1% | -16.9% |
| China Metal International Holdings Inc ($319) | 17.8% | 19.7% | 21.3% | 21.0% | |
| Fosun International Ltd ($656) | 15.8% | 16.7% | 23.0% | 20.9% | |
| |
|---|
| Median (19 companies) | 7.6% | 12.6% | 11.7% | 7.1% | -89.9% |
|---|
| Xingda International Holdings Ltd ($1899) | 21.6% | 17.3% | 22.2% | 19.1% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 690.4% | | 926.9% | 1,395.7% | |
| Wanguo International Mining Group Ltd ($3939) | 13.2% | 24.0% | 39.3% | 32.5% | |
| Vale SA ($6210) | 25.8% | 34.0% | 28.1% | 29.8% | 34.5% |
| Xiwang Special Steel Co Ltd ($1266) | 14.9% | 22.6% | 31.5% | 21.5% | |
| Chongqing Iron & Steel Co Ltd ($1053) | 10.8% | 12.5% | 12.0% | 20.9% | |
| |
|---|
| Median (19 companies) | 7.3% | 9.0% | 10.9% | 8.1% | 24.2% |
|---|
| Xingda International Holdings Ltd ($1899) | 12.6% | 7.7% | 5.6% | 6.4% | 8.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 74.9% | 38.4% | 24.4% | 15.0% | |
| China Metal International Holdings Inc ($319) | 11.5% | 11.0% | 12.0% | 12.7% | |
| Xiwang Special Steel Co Ltd ($1266) | 33.5% | 7.8% | 8.7% | 11.5% | |
| Tiangong International Co Ltd ($826) | 14.8% | 14.5% | 13.4% | 10.7% | |
| Golik Holdings Ltd ($1118) | 9.0% | 7.0% | 7.4% | 10.0% | |
| |
|---|
| Median (19 companies) | 11.5% | 6.7% | 7.5% | 3.1% | -8.8% |
|---|
| Xingda International Holdings Ltd ($1899) | 10.5% | 6.2% | 10.3% | 7.8% | 2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fosun International Ltd ($656) | 4.6x | 4.4x | 4.8x | 5.5x | |
| Maanshan Iron & Steel Co Ltd ($323) | 5.0x | 55.2x | 7.3x | 5.3x | |
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | |
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | |
| |
|---|
| Median (13 companies) | 2.2x | 2.3x | 3.0x | 3.2x | 0.7x |
|---|
| Xingda International Holdings Ltd ($1899) | 0.9x | 0.7x | 0.5x | 0.7x | -0.3x |
