Shougang Concord Century Holdings Ltd reports 164% EBITDA decline and 9.2 pp EBITDA Margin decline from 5.2% to -4.0%
23/03/2016 • About Shougang Concord Century Holdings Ltd (
$103) • By InTwits
Shougang Concord Century Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shougang Concord Century Holdings Ltd is a company in decline: 2015 revenue growth was -17.2%, 5 years revenue CAGR was -2.3%
- The company operates at negative EBITDA Margin: -4.0%
- EBITDA Margin is quite volatile: -4.0% in 2015, 5.2% in 2014, 11.2% in 2013, -0.2% in 2012, 8.8% in 2011
- Shougang Concord Century Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 6.4%.
- CAPEX is quite volatile: 5.1 in 2015, 19.3 in 2014, 9.9 in 2013, 106 in 2012, 139 in 2011
- The company has unprofitable business model: ROIC is at -6.7%
- It operates with high leverage: Net Debt/EBITDA is 16.7x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shougang Concord Century Holdings Ltd ($103) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,776 | 1,688 | 1,858 | 1,787 | 1,481 | -17.2% |
| Gross Profit | 165 | 16 | 214 | 134 | 19 | -85.8% |
| SG&A | 134 | 124 | 123 | 125 | 119 | -4.2% |
| EBITDA | 156 | -4 | 209 | 93 | -60 | -164.0% |
| Net Income | 4 | -300 | -17 | -276 | -377 | 36.7% |
Balance Sheet
|
|---|
| Cash | 155 | 176 | 124 | 69 | 210 | 205.1% |
| Short Term Debt | 838 | 948 | 1,100 | 1,294 | 919 | -29.0% |
| Long Term Debt | 500 | 437 | 322 | 0 | 199 | |
Cash flow
|
|---|
| Capex | 139 | 106 | 10 | 19 | 5 | -73.5% |
Ratios
|
|---|
| Revenue growth | 6.7% | -4.9% | 10.0% | -3.8% | -17.2% | |
| EBITDA growth | -56.2% | -102.5% | -5,370.5% | -55.4% | -164.0% | |
| Gross Margin | 9.3% | 1.0% | 11.5% | 7.5% | 1.3% | -6.2% |
| EBITDA Margin | 8.8% | -0.2% | 11.2% | 5.2% | -4.0% | -9.2% |
| Net Income Margin | 0.2% | -17.8% | -0.9% | -15.4% | -25.5% | -10.0% |
| SG&A, % of revenue | 7.6% | 7.3% | 6.6% | 7.0% | 8.1% | 1.1% |
| CAPEX, % of revenue | 7.8% | 6.3% | 0.5% | 1.1% | 0.3% | -0.7% |
| ROIC | 0.6% | -4.8% | 1.6% | -1.9% | -6.7% | -4.9% |
| ROE | 0.2% | -13.6% | -0.8% | -13.8% | -23.1% | -9.3% |
| Net Debt/EBITDA | 7.6x | | 6.2x | 13.2x | | -13.2x |
Revenue and profitability
Shougang Concord Century Holdings Ltd's Revenue dropped on 17.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.9 pp from -16.5% to -4.7% in 2015.
Gross Margin decreased on 6.2 pp from 7.5% to 1.3% in 2015. SG&A as a % of Revenue increased slightly on 1.1 pp from 7.0% to 8.1% in 2015.
Net Income marign dropped on 10.0 pp from -15.4% to -25.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
Shougang Concord Century Holdings Ltd's CAPEX/Revenue was 0.35% in 2015. The company showed decline in CAPEX/Revenue of 5.9 pp from 6.3% in 2012 to 0.35% in 2015. It's average level of CAPEX/Revenue for the last three years was 0.65%.
Return on investment
The company operates at negative ROIC (-6.72%) and ROE (-23.14%). ROIC decreased on 4.9 pp from -1.9% to -6.7% in 2015. ROE decreased on 9.3 pp from -13.8% to -23.1% in 2015.
Leverage (Debt)
Debt level is 16.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 13.2x from 13.2x to in 2015. Debt dropped on 13.6% in 2015 while cash jumped on 205% in 2015.
Appendix 1: Peers in Metal Fabricate/Hardware
Below we provide Shougang Concord Century Holdings Ltd benchmarking against other companies in Metal Fabricate/Hardware 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 |
|---|
| Burwill Holdings Ltd ($24) | 25.4% | -35.5% | -9.2% | 39.2% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 100.8% | 16.3% | -48.4% | 32.2% | |
| EVA Precision Industrial Holdings Ltd ($838) | 16.1% | 19.7% | 12.2% | 30.1% | |
| China Zhongwang Holdings Ltd ($1333) | -2.1% | 31.0% | 6.0% | 11.6% | |
| Lung Kee Bermuda Holdings ($255) | | -5.2% | -7.5% | 8.2% | -5.2% |
| |
|---|
| Median (8 companies) | 27.9% | 10.8% | 9.1% | 9.9% | -4.0% |
|---|
| Shougang Concord Century Holdings Ltd ($103) | | -4.9% | 10.0% | -3.8% | -17.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Zhongwang Holdings Ltd ($1333) | 21.6% | 24.2% | 26.8% | 28.0% | |
| EVA Precision Industrial Holdings Ltd ($838) | 24.7% | 21.6% | 24.1% | 26.2% | |
| New Times Energy Corp Ltd ($166) | 1.0% | -2.7% | 0.8% | 22.6% | |
| Ka Shui International Holdings Ltd ($822) | 19.4% | 22.5% | 22.1% | 19.6% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 15.1% | 17.0% | 15.4% | 11.6% | |
| |
|---|
| Median (7 companies) | 15.1% | 17.0% | 15.4% | 19.6% | 2.0% |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 9.3% | 1.0% | 11.5% | 7.5% | 1.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Zhongwang Holdings Ltd ($1333) | 22.0% | 22.3% | 24.3% | 24.2% | |
| EVA Precision Industrial Holdings Ltd ($838) | 16.8% | 10.4% | 9.9% | 16.7% | |
| Ka Shui International Holdings Ltd ($822) | 12.6% | 14.3% | 9.5% | 12.0% | |
| Lung Kee Bermuda Holdings ($255) | 19.3% | 15.3% | 14.8% | 11.7% | 15.2% |
| Burwill Holdings Ltd ($24) | 0.6% | -0.8% | -0.6% | -0.4% | |
| |
|---|
| Median (8 companies) | 11.8% | 11.7% | 7.7% | 5.6% | 3.7% |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 8.8% | -0.2% | 11.2% | 5.2% | -4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Zhongwang Holdings Ltd ($1333) | 25.1% | 56.3% | 41.6% | 54.8% | |
| New Times Energy Corp Ltd ($166) | 9.0% | 11.4% | 1.7% | 52.1% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 20.3% | 25.9% | 71.7% | 31.4% | |
| Ka Shui International Holdings Ltd ($822) | 5.0% | 9.3% | 7.4% | 11.1% | |
| Lung Kee Bermuda Holdings ($255) | 21.9% | 11.6% | 9.6% | 11.0% | 4.5% |
| |
|---|
| Median (8 companies) | 15.3% | 11.5% | 8.1% | 11.0% | 3.5% |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 7.8% | 6.3% | 0.5% | 1.1% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVA Precision Industrial Holdings Ltd ($838) | 10.5% | 3.3% | 1.9% | 9.1% | |
| Ka Shui International Holdings Ltd ($822) | 10.5% | 14.6% | 7.1% | 7.6% | |
| China Zhongwang Holdings Ltd ($1333) | 7.8% | 9.5% | 8.8% | 7.4% | |
| Lung Kee Bermuda Holdings ($255) | 12.3% | 6.7% | 4.9% | 3.2% | 4.8% |
| Burwill Holdings Ltd ($24) | 0.8% | -1.8% | -1.5% | -1.6% | |
| |
|---|
| Median (8 companies) | 8.0% | 5.0% | 1.9% | 0.8% | -1.8% |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 0.6% | -4.8% | 1.6% | -1.9% | -6.7% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Zhongwang Holdings Ltd ($1333) | -0.8x | 1.3x | 2.6x | 4.1x | |
| Ka Shui International Holdings Ltd ($822) | 0.7x | 0.9x | 1.3x | 1.7x | |
| EVA Precision Industrial Holdings Ltd ($838) | -0.4x | 1.1x | 1.8x | 1.2x | |
| Lung Kee Bermuda Holdings ($255) | -0.7x | -1.5x | -1.6x | -0.9x | -1.4x |
| |
|---|
| Median (4 companies) | 0.7x | 1.2x | 2.2x | 1.4x | -1.4x |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 7.6x | | 6.2x | 13.2x | |
