China Power New Energy Development Co Ltd reports 60.6% Net Income decline and 0.61 pp EBITDA Margin growth from 54.5% to 55.1%
23/03/2016 • About China Power New Energy Development Co Ltd (
$735) • By InTwits
China Power New Energy Development Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Power New Energy Development Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 80.5%. At the same time it's a lot of higher than industry average of 58.6%.
- CAPEX is quite volatile: 2,380 in 2015, 2,801 in 2014, 1,752 in 2013, 1,496 in 2012, 401 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.6%
- It operates with high leverage: Net Debt/EBITDA is 7.9x while industry average is 0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Power New Energy Development Co Ltd ($735) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,861 | 1,819 | 2,188 | 2,344 | 2,405 | 2.6% |
| Gross Profit | 1,062 | 1,333 | 1,549 | 1,687 | 1,801 | 6.7% |
| EBITDA | 775 | 993 | 1,129 | 1,277 | 1,325 | 3.7% |
| Net Income | 181 | 193 | 257 | 275 | 108 | -60.6% |
Balance Sheet
|
|---|
| Cash | 645 | 2,693 | 1,735 | 776 | 1,000 | 28.9% |
| Short Term Debt | 403 | 1,155 | 1,667 | 1,554 | 1,547 | -0.4% |
| Long Term Debt | 4,786 | 6,267 | 6,268 | 7,456 | 9,976 | 33.8% |
Cash flow
|
|---|
| Capex | 401 | 1,496 | 1,752 | 2,801 | 2,380 | -15.0% |
Ratios
|
|---|
| Revenue growth | 17.0% | -2.3% | 20.3% | 7.2% | 2.6% | |
| EBITDA growth | 39.0% | 28.2% | 13.7% | 13.1% | 3.7% | |
| Gross Margin | 57.1% | 73.3% | 70.8% | 72.0% | 74.9% | 2.9% |
| EBITDA Margin | 41.6% | 54.6% | 51.6% | 54.5% | 55.1% | 0.6% |
| Net Income Margin | 9.7% | 10.6% | 11.8% | 11.7% | 4.5% | -7.2% |
| CAPEX, % of revenue | 21.5% | 82.2% | 80.1% | 119.5% | 99.0% | -20.5% |
| ROIC | 4.2% | 4.7% | 4.3% | 4.6% | 3.6% | -1.0% |
| ROE | 3.6% | 3.2% | 3.6% | 3.6% | 1.4% | -2.3% |
| Net Debt/EBITDA | 5.9x | 4.8x | 5.5x | 6.4x | 7.9x | 1.5x |
Revenue and profitability
The company's Revenue increased on 2.6% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.61 pp from 54.5% to 55.1% in 2015.
Gross Margin increased on 2.9 pp from 72.0% to 74.9% in 2015.
Net Income marign decreased on 7.2 pp from 11.7% to 4.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 99.0%. CAPEX/Revenue jumped on 16.8 pp from 82.2% in 2012 to 99.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 99.5%.China Power New Energy Development Co Ltd investments to CAPEX were large: 180% of EBITDA.
Return on investment
The company operates at low ROIC (3.56%) and ROE (1.38%). ROIC decreased slightly on 1.0 pp from 4.6% to 3.6% in 2015. ROE decreased on 2.3 pp from 3.6% to 1.4% in 2015.
Leverage (Debt)
Debt level is 7.9x Net Debt / EBITDA and 8.7x Debt / EBITDA. Net Debt / EBITDA surged on 1.5x from 6.4x to 7.9x in 2015. Debt surged on 27.9% in 2015 while cash surged on 28.9% in 2015.
Appendix 1: Peers in Electric
Below you can find China Power New Energy Development Co Ltd 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 |
|---|
| Huaneng Renewables Corp Ltd ($958) | | 26.0% | 46.7% | 4.1% | 19.6% |
| CGN Power Co Ltd ($1816) | | 10.7% | -1.2% | 19.3% | 12.3% |
| Huadian Fuxin Energy Corp Ltd ($816) | | 56.0% | 16.7% | 4.9% | 10.4% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | | 2.1% | -1.8% | 2.9% | 6.7% |
| China Resources Power Holdings Co Ltd ($836) | | 2.8% | 11.4% | 1.6% | 1.1% |
| |
|---|
| Median (13 companies) | 20.1% | 8.8% | 11.3% | 4.8% | -3.5% |
|---|
| China Power New Energy Development Co Ltd ($735) | | -2.3% | 20.3% | 7.2% | 2.6% |
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% |
| 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% | |
| Huaneng Power International Inc ($902) | | | | 24.8% | 28.4% |
| |
|---|
| Median (7 companies) | 28.6% | 27.8% | 46.9% | 27.1% | 47.9% |
|---|
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | 74.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | 71.2% |
| CGN Power Co Ltd ($1816) | 64.2% | 66.0% | 62.6% | 60.5% | 59.4% |
| China Power International Development Ltd ($2380) | 25.3% | 32.1% | 39.0% | 42.3% | 53.6% |
| |
|---|
| Median (13 companies) | 22.3% | 25.5% | 32.1% | 33.7% | 41.9% |
|---|
| China Power New Energy Development Co Ltd ($735) | 41.6% | 54.6% | 51.6% | 54.5% | 55.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Enerchina Holdings Ltd ($622) | 54.3% | 24.1% | 28.3% | 3.8% | 321.6% |
| Huaneng Renewables Corp Ltd ($958) | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% |
| Huadian Fuxin Energy Corp Ltd ($816) | 78.6% | 62.2% | 54.3% | 91.8% | 96.0% |
| CGN Power Co Ltd ($1816) | 78.4% | 47.5% | 57.2% | 94.5% | 50.0% |
| China Resources Power Holdings Co Ltd ($836) | 20.4% | 16.6% | 33.4% | 34.6% | 23.5% |
| |
|---|
| Median (13 companies) | 24.3% | 26.2% | 25.1% | 16.9% | 19.0% |
|---|
| China Power New Energy Development Co Ltd ($735) | 21.5% | 82.2% | 80.1% | 119.5% | 99.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| Huaneng Power International Inc ($902) | 4.0% | 7.3% | 10.3% | 11.3% | 10.9% |
| China Power International Development Ltd ($2380) | 4.0% | 5.7% | 7.5% | 8.0% | 10.1% |
| Amber Energy Ltd ($90) | 7.6% | 5.4% | 4.6% | 3.6% | 8.6% |
| |
|---|
| Median (13 companies) | 5.2% | 5.4% | 6.8% | 6.7% | 6.1% |
|---|
| China Power New Energy Development Co Ltd ($735) | 4.2% | 4.7% | 4.3% | 4.6% | 3.6% |
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 | 7.4x |
| |
|---|
| Median (15 companies) | 5.9x | 5.8x | 5.6x | 4.6x | 5.1x |
|---|
| China Power New Energy Development Co Ltd ($735) | 5.9x | 4.8x | 5.5x | 6.4x | 7.9x |
