CNQC International Holdings Ltd reports 807% revenue growth in 2015 and 8.8 pp EBITDA Margin decline from 19.6% to 10.8%
23/03/2016 • About CNQC International Holdings Ltd (
$1240) • By InTwits
CNQC International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNQC International Holdings Ltd is a fast growth stock: 2015 revenue growth was 807%, 5 year revenue CAGR was 193% at 2015 ROIC 21.8%
- EBITDA Margin is declining: 10.8% in 2015 vs. 19.6% in 2014 vs. 23.7% in 2011
- CNQC International Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.3%. At the same time it's a lot of higher than industry average of 6.3%.
- CAPEX is quite volatile: 38.7 in 2015, 128 in 2014, 73.8 in 2013, 42.6 in 2012, 76.7 in 2011
- The company has highly profitable business model: ROIC is at 21.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 5.3x while industry average is 5.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNQC International Holdings Ltd ($1240) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 258 | 313 | 598 | 1,218 | 11,053 | 807.4% |
| Gross Profit | 71 | 60 | 114 | 228 | 1,806 | 690.9% |
| SG&A | | | | | 719 | |
| EBITDA | 61 | 62 | 118 | 239 | 1,191 | 398.9% |
| Net Income | 35 | 26 | 65 | 156 | 577 | 270.6% |
Balance Sheet
|
|---|
| Cash | 45 | 47 | 58 | 189 | 1,626 | 760.7% |
| Short Term Debt | 29 | 29 | 54 | 119 | 3,437 | 2,798.8% |
| Long Term Debt | 62 | 80 | 88 | 78 | 4,486 | 5,618.9% |
Cash flow
|
|---|
| Capex | 77 | 43 | 74 | 128 | 39 | -69.9% |
Ratios
|
|---|
| Revenue growth | 401.9% | 21.6% | 91.0% | 103.7% | 807.4% | |
| EBITDA growth | 186.8% | 1.8% | 89.8% | 102.8% | 398.9% | |
| Gross Margin | 27.5% | 19.1% | 19.1% | 18.7% | 16.3% | -2.4% |
| EBITDA Margin | 23.7% | 19.8% | 19.7% | 19.6% | 10.8% | -8.8% |
| Net Income Margin | 13.7% | 8.2% | 10.9% | 12.8% | 5.2% | -7.6% |
| SG&A, % of revenue | | | | | 6.5% | 6.5% |
| CAPEX, % of revenue | 29.8% | 13.6% | 12.3% | 10.5% | 0.4% | -10.2% |
| ROIC | 23.1% | 12.2% | 22.3% | 40.4% | 21.8% | -18.7% |
| ROE | 34.7% | 16.4% | 29.9% | 59.2% | 66.1% | 6.9% |
| Net Debt/EBITDA | 0.8x | 1.0x | 0.7x | 0.0x | 5.3x | 5.3x |
Revenue and profitability
The company's Revenue surged on 807% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 24.7% to 26.7% in 2015.
Gross Margin decreased on 2.4 pp from 18.7% to 16.3% in 2015.
Net Income marign decreased on 7.6 pp from 12.8% to 5.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.35% in 2015. CAPEX/Revenue dropped on 13.3 pp from 13.6% in 2012 to 0.35% in 2015. Average CAPEX/Revenue for the last three years was 7.7%.
Return on investment
The company operates at high and attractive ROIC (21.78%) and ROE (66.10%). ROIC dropped on 18.7 pp from 40.4% to 21.8% in 2015. ROE increased on 6.9 pp from 59.2% to 66.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.3x and Debt / EBITDA is 6.7x. Net Debt / EBITDA jumped on 5.3x from 0.034x to 5.3x in 2015. Debt jumped on 3,922% in 2015 while cash surged on 761% in 2015.
Appendix 1: Peers in Engineering&Construction
Below we provide CNQC International Holdings Ltd benchmarking against other companies in Engineering&Construction 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 |
|---|
| Richly Field China Development Ltd ($313) | | | -45.0% | 464.2% | -65.7% |
| Junefield Department Store Group Ltd ($758) | 22.9% | -20.3% | -24.9% | 126.6% | |
| Wison Engineering Services Co Ltd ($2236) | 1.2% | -2.9% | -24.9% | 90.3% | |
| China Resources and Transportation Group Ltd ($269) | | 939.8% | 3,196.3% | 87.9% | -41.6% |
| Broad Greenstate International Co Ltd ($1253) | | 25.2% | 30.8% | 82.9% | 17.5% |
| |
|---|
| Median (42 companies) | 8.2% | 9.7% | 21.0% | 14.0% | 12.6% |
|---|
| CNQC International Holdings Ltd ($1240) | | 21.6% | 91.0% | 103.7% | 807.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | 2.2% | 43.6% | 65.6% | 64.0% | |
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% |
| Kingbo Strike Ltd ($1421) | 22.9% | 32.4% | 44.4% | 40.3% | 30.7% |
| Broad Greenstate International Co Ltd ($1253) | 16.7% | 20.1% | 28.7% | 35.8% | 36.7% |
| |
|---|
| Median (37 companies) | 11.0% | 12.4% | 12.1% | 12.9% | 13.3% |
|---|
| CNQC International Holdings Ltd ($1240) | 27.5% | 19.1% | 19.1% | 18.7% | 16.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | -0.5% | 46.2% | 73.8% | 77.1% | |
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | 51.6% |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | 60.9% |
| Grand Ming Group Holdings Ltd ($1271) | 17.5% | 10.0% | 15.8% | 31.0% | 19.0% |
| |
|---|
| Median (43 companies) | 8.5% | 9.2% | 7.8% | 6.8% | 8.1% |
|---|
| CNQC International Holdings Ltd ($1240) | 23.7% | 19.8% | 19.7% | 19.6% | 10.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| Shun Cheong Holdings ($650) | 7.2% | 16.4% | 8.0% | 23.9% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 6.1% | 4.2% | 7.7% | 20.2% | 3.2% |
| KFM Kingdom Holdings Ltd ($3816) | 6.5% | 4.6% | 11.5% | 14.9% | 9.6% |
| |
|---|
| Median (43 companies) | 4.3% | 2.3% | 2.5% | 1.6% | 2.4% |
|---|
| CNQC International Holdings Ltd ($1240) | 29.8% | 13.6% | 12.3% | 10.5% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| Broad Greenstate International Co Ltd ($1253) | | 33.2% | 85.1% | 51.2% | 26.0% |
| Kingbo Strike Ltd ($1421) | | 56.9% | 125.4% | 48.9% | 11.4% |
| Ngai Shun Holdings Ltd ($1246) | | 68.8% | 77.2% | 45.2% | 31.0% |
| China Saite Group Co Ltd ($153) | 46.3% | 64.0% | 53.2% | 35.3% | |
| |
|---|
| Median (44 companies) | 6.9% | 5.8% | 5.3% | 4.1% | 2.7% |
|---|
| CNQC International Holdings Ltd ($1240) | 23.1% | 12.2% | 22.3% | 40.4% | 21.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| Chun Wo Development Holdings Ltd ($711) | | 14.3x | 8.1x | 12.6x | 15.9x |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | |
| |
|---|
| Median (36 companies) | 0.5x | 1.5x | 1.7x | 2.4x | 2.2x |
|---|
| CNQC International Holdings Ltd ($1240) | 0.8x | 1.0x | 0.7x | 0.0x | 5.3x |
