China Agri-Industries Holdings Ltd reports 56.4% EBITDA growth while 11.5% Revenue decline
23/03/2016 • About China Agri-Industries Holdings Ltd (
$606) • By InTwits
China Agri-Industries Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Agri-Industries Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.3%
- EBITDA Margin is quite volatile: 3.1% in 2015, 1.7% in 2014, 2.7% in 2013, 3.7% in 2012, 5.3% in 2011
- China Agri-Industries Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's in pair with industry average of 6.1%.
- CAPEX is quite volatile: 1,594 in 2015, 1,879 in 2014, 3,298 in 2013, 4,912 in 2012, 6,063 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 4.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Agri-Industries Holdings Ltd ($606) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 82,350 | 91,319 | 94,543 | 93,239 | 82,548 | -11.5% |
| Gross Profit | 6,784 | 5,864 | 5,703 | 4,329 | 4,286 | -1.0% |
| SG&A | 4,052 | 4,631 | 5,130 | 5,289 | 4,845 | -8.4% |
| EBITDA | 4,378 | 3,383 | 2,569 | 1,613 | 2,523 | 56.4% |
| Net Income | 2,368 | 1,228 | 1,568 | -775 | -333 | -57.1% |
Balance Sheet
|
|---|
| Cash | 9,176 | 9,387 | 13,944 | 12,551 | 5,439 | -56.7% |
| Short Term Debt | 24,071 | 26,434 | 30,233 | 33,754 | 25,848 | -23.4% |
| Long Term Debt | 8,844 | 5,755 | 3,157 | 1,047 | 1,794 | 71.3% |
Cash flow
|
|---|
| Capex | 6,063 | 4,912 | 3,298 | 1,879 | 1,594 | -15.2% |
Ratios
|
|---|
| Revenue growth | 53.9% | 10.9% | 3.5% | -1.4% | -11.5% | |
| EBITDA growth | 139.5% | -22.7% | -24.1% | -37.2% | 56.4% | |
| Gross Margin | 8.2% | 6.4% | 6.0% | 4.6% | 5.2% | 0.5% |
| EBITDA Margin | 5.3% | 3.7% | 2.7% | 1.7% | 3.1% | 1.3% |
| Net Income Margin | 2.9% | 1.3% | 1.7% | -0.8% | -0.4% | 0.4% |
| SG&A, % of revenue | 4.9% | 5.1% | 5.4% | 5.7% | 5.9% | 0.2% |
| CAPEX, % of revenue | 7.4% | 5.4% | 3.5% | 2.0% | 1.9% | -0.1% |
| ROIC | 6.5% | 3.5% | 1.8% | -0.1% | 1.3% | 1.4% |
| ROE | 11.5% | 5.0% | 5.6% | -2.7% | -1.2% | 1.5% |
| Net Debt/EBITDA | 5.4x | 6.7x | 7.6x | 13.8x | 8.8x | -5.0x |
Revenue and profitability
China Agri-Industries Holdings Ltd's Revenue dropped on 11.5% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.3 pp from 1.7% to 3.1% in 2015.
Gross Margin increased slightly on 0.55 pp from 4.6% to 5.2% 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
The company's CAPEX/Revenue was 1.9% in 2015. China Agri-Industries Holdings Ltd's CAPEX/Revenue decreased on 3.4 pp from 5.4% in 2012 to 1.9% in 2015. Average CAPEX/Revenue for the last three years was 2.5%.Battling declining revenue the company invested a large share of EBITDA (63.2%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (1.33%) and negative ROE (-1.22%). ROIC increased slightly on 1.4 pp from -0.091% to 1.3% in 2015. ROE increased slightly on 1.5 pp from -2.7% to -1.2% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.8x and Debt / EBITDA is 11.0x. Net Debt / EBITDA dropped on 5.0x from 13.8x to 8.8x in 2015. Debt dropped on 20.6% in 2015 while cash dropped on 56.7% in 2015.
Appendix 1: Peers in Agriculture
Below we provide China Agri-Industries Holdings Ltd benchmarking against other companies in Agriculture 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CP Pokphand Co Ltd ($43) | | 36.9% | 9.2% | 1.7% | -6.9% |
| China Putian Food Holdings Ltd ($1699) | 16.9% | 11.7% | 7.9% | -0.3% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | | -60.8% | -27.8% | -36.0% | -9.8% |
| Cypress Jade Agricultural Holdings Ltd ($875) | 4.7% | 1,594.6% | 0.2% | -61.3% | |
| |
|---|
| Median (4 companies) | 10.8% | 24.3% | 4.1% | -18.2% | -8.3% |
|---|
| China Agri-Industries Holdings Ltd ($606) | | 10.9% | 3.5% | -1.4% | -11.5% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Putian Food Holdings Ltd ($1699) | 23.5% | 25.8% | 25.9% | 23.0% | |
| CP Pokphand Co Ltd ($43) | 15.3% | 13.6% | 12.7% | 15.5% | 17.6% |
| Chaoda Modern Agriculture Holdings Ltd ($682) | 61.8% | -7.8% | -6.2% | -18.6% | -29.1% |
| Cypress Jade Agricultural Holdings Ltd ($875) | 2.6% | 32.8% | 30.6% | -19.2% | |
| |
|---|
| Median (4 companies) | 19.4% | 19.7% | 19.3% | -1.5% | -5.8% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 8.2% | 6.4% | 6.0% | 4.6% | 5.2% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Putian Food Holdings Ltd ($1699) | 20.0% | 20.1% | 20.7% | 16.1% | |
| CP Pokphand Co Ltd ($43) | 8.3% | 7.6% | 6.1% | 8.0% | 9.9% |
| Cypress Jade Agricultural Holdings Ltd ($875) | -76.7% | 1.9% | -5.7% | -68.5% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | 46.8% | -130.5% | -101.7% | -79.4% | -458.9% |
| |
|---|
| Median (4 companies) | 14.2% | 4.7% | 0.2% | -30.2% | -224.5% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 5.3% | 3.7% | 2.7% | 1.7% | 3.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chaoda Modern Agriculture Holdings Ltd ($682) | 55.4% | 52.1% | 10.9% | 19.2% | 12.4% |
| Cypress Jade Agricultural Holdings Ltd ($875) | 0.0% | 17.7% | 16.2% | 14.6% | |
| China Putian Food Holdings Ltd ($1699) | 5.7% | 18.8% | 26.8% | 9.0% | |
| CP Pokphand Co Ltd ($43) | 2.3% | 3.6% | 5.2% | 5.9% | 6.5% |
| |
|---|
| Median (4 companies) | 4.0% | 18.2% | 13.6% | 11.8% | 9.5% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 7.4% | 5.4% | 3.5% | 2.0% | 1.9% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CP Pokphand Co Ltd ($43) | 22.3% | 19.7% | 13.5% | 15.2% | 16.7% |
| China Putian Food Holdings Ltd ($1699) | 39.3% | 27.8% | 20.4% | 11.4% | |
| Chaoda Modern Agriculture Holdings Ltd ($682) | 12.8% | -20.2% | -16.8% | -11.6% | -56.2% |
| Cypress Jade Agricultural Holdings Ltd ($875) | | -15.4% | -17.7% | -52.2% | |
| |
|---|
| Median (4 companies) | 22.3% | 2.2% | -1.6% | -0.1% | -19.8% |
|---|
| China Agri-Industries Holdings Ltd ($606) | 6.5% | 3.5% | 1.8% | -0.1% | 1.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Putian Food Holdings Ltd ($1699) | 0.6x | 0.1x | 1.1x | 2.0x | |
| CP Pokphand Co Ltd ($43) | 1.2x | 1.0x | 1.8x | 1.9x | 1.6x |
| |
|---|
| Median (2 companies) | 0.6x | 1.0x | 1.5x | 1.9x | 1.6x |
|---|
| China Agri-Industries Holdings Ltd ($606) | 5.4x | 6.7x | 7.6x | 13.8x | 8.8x |
