Shougang Fushan Resources Group Ltd reports 229% EBITDA decline and 38.7% Revenue decline
23/03/2016 • About Shougang Fushan Resources Group Ltd (
$639) • By InTwits
Shougang Fushan Resources Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shougang Fushan Resources Group Ltd is a company in decline: 2015 revenue growth was -38.7%, 5 years revenue CAGR was -18.5%
- EBITDA Margin is declining: -18.0% in 2015 vs. 8.6% in 2014 vs. 59.2% in 2011
- EBITDA Margin is quite volatile: -18.0% in 2015, 8.6% in 2014, 49.1% in 2013, 57.8% in 2012, 59.2% in 2011
- Shougang Fushan Resources Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 5.8%.
- CAPEX is quite volatile: 129 in 2015, 239 in 2014, 236 in 2013, 120 in 2012, 88.1 in 2011
- The company has unprofitable business model: ROIC is at -3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shougang Fushan Resources Group Ltd ($639) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 7,139 | 5,651 | 4,268 | 3,255 | 1,997 | -38.7% |
| Gross Profit | 5,029 | 3,586 | 2,173 | 1,304 | 488 | -62.6% |
| SG&A | 1,242 | 640 | 461 | 558 | 391 | -30.0% |
| EBITDA | 4,229 | 3,268 | 2,094 | 280 | -360 | -228.6% |
| Net Income | 2,256 | 1,800 | 1,115 | -425 | -416 | -2.1% |
Balance Sheet
|
|---|
| Cash | 4,517 | 2,981 | 137 | 88 | 52 | -40.6% |
| Short Term Debt | 896 | 1,073 | 578 | 74 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 346 | 474 | 283 | 290 | 245 | -15.7% |
Ratios
|
|---|
| Revenue growth | 28.8% | -20.8% | -24.5% | -23.7% | -38.7% | |
| EBITDA growth | 26.5% | -22.7% | -35.9% | -86.6% | -228.6% | |
| Gross Margin | 70.4% | 63.5% | 50.9% | 40.1% | 24.5% | -15.6% |
| EBITDA Margin | 59.2% | 57.8% | 49.1% | 8.6% | -18.0% | -26.6% |
| Net Income Margin | 31.6% | 31.9% | 26.1% | -13.1% | -20.9% | -7.8% |
| SG&A, % of revenue | 17.4% | 11.3% | 10.8% | 17.1% | 19.6% | 2.4% |
| CAPEX, % of revenue | 4.8% | 8.4% | 6.6% | 8.9% | 12.3% | 3.3% |
| ROIC | 15.4% | 11.2% | 6.2% | -1.1% | -3.9% | -2.8% |
| ROE | 12.2% | 9.4% | 5.7% | -2.2% | -2.5% | -0.2% |
| Net Debt/EBITDA | -0.9x | -0.6x | 0.2x | -0.0x | | 0.0x |
Revenue and profitability
Shougang Fushan Resources Group Ltd's Revenue dropped on 38.7% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 26.6 pp from 8.6% to -18.0% in 2015.
Gross Margin dropped on 15.6 pp from 40.1% to 24.5% in 2015. SG&A as a % of Revenue increased on 2.4 pp from 17.1% to 19.6% in 2015.
Net Income marign decreased on 7.8 pp from -13.1% to -20.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 12.3% in 2015. Shougang Fushan Resources Group Ltd showed CAPEX/Revenue growth of 3.9 pp from 8.4% in 2012 to 12.3% in 2015. Average CAPEX/Revenue for the last three years was 9.3%.
Return on investment
The company operates at negative ROIC (-3.88%) and ROE (-2.47%). ROIC decreased on 2.8 pp from -1.1% to -3.9% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash dropped on 40.6% in 2015.
Appendix 1: Peers in Coal
Below you can find Shougang Fushan Resources Group Ltd benchmarking vs. other companies in Coal 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 |
|---|
| Kinetic Mines and Energy Ltd ($1277) | | | 299.9% | 563.4% | 40.0% |
| Feishang Anthracite Resources Ltd ($1738) | 172.1% | 34.9% | 25.8% | 103.6% | |
| Loudong General Nice Resources China Holdings Ltd ($988) | 8.5% | -12.7% | 39.1% | 87.6% | |
| Rosan Resources Holdings Ltd ($578) | -19.9% | -74.1% | 71.1% | 49.1% | |
| Asia Coal Ltd ($835) | | 32.1% | -15.3% | 43.2% | 133.6% |
| |
|---|
| Median (22 companies) | 21.3% | 1.4% | -6.8% | -8.2% | 28.4% |
|---|
| Shougang Fushan Resources Group Ltd ($639) | | -20.8% | -24.5% | -23.7% | -38.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Coal Ltd ($835) | 32.4% | 56.7% | 62.6% | 76.7% | 5.8% |
| Agritrade Resources Ltd ($1131) | 7.6% | 22.9% | 29.4% | 31.8% | 30.0% |
| Kinetic Mines and Energy Ltd ($1277) | | 20.6% | 28.8% | 30.3% | 10.9% |
| China Shenhua Energy Co Ltd ($1088) | 39.9% | 31.4% | 28.7% | 29.6% | |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 44.7% | 35.2% | 33.7% | 27.4% | |
| |
|---|
| Median (22 companies) | 30.0% | 19.9% | 17.3% | 9.4% | 5.8% |
|---|
| Shougang Fushan Resources Group Ltd ($639) | 70.4% | 63.5% | 50.9% | 40.1% | 24.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 41.2% | 35.6% | 31.6% | 34.2% | |
| Agritrade Resources Ltd ($1131) | 1.4% | 41.6% | 37.3% | 33.4% | 31.1% |
| Kinetic Mines and Energy Ltd ($1277) | | -277.0% | -51.9% | 29.3% | 15.8% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 40.9% | 33.1% | 30.7% | 22.8% | |
| Feishang Anthracite Resources Ltd ($1738) | -9.2% | -13.1% | -32.9% | 19.0% | |
| |
|---|
| Median (23 companies) | 11.1% | -1.1% | -4.3% | -8.6% | -19.6% |
|---|
| Shougang Fushan Resources Group Ltd ($639) | 59.2% | 57.8% | 49.1% | 8.6% | -18.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Up Energy Development Group Ltd ($307) | | | | 279.5% | 75.2% |
| Siberian Mining Group Co Ltd ($1142) | 129.1% | 4.6% | 78.8% | 217.3% | 279.7% |
| King Stone Energy Group Ltd ($663) | 82.7% | 58.5% | 135.3% | 205.7% | |
| Asia Coal Ltd ($835) | 121.4% | 12.5% | 25.8% | 111.0% | 0.3% |
| Hidili Industry International Development Ltd ($1393) | 74.1% | 82.3% | 144.6% | 92.3% | |
| |
|---|
| Median (23 companies) | 22.1% | 18.2% | 26.0% | 20.5% | 13.5% |
|---|
| Shougang Fushan Resources Group Ltd ($639) | 4.8% | 8.4% | 6.6% | 8.9% | 12.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 21.0% | 19.5% | 17.4% | 14.6% | |
| Loudong General Nice Resources China Holdings Ltd ($988) | 11.5% | 4.1% | 8.2% | 9.6% | |
| Kinetic Mines and Energy Ltd ($1277) | -2.6% | -6.6% | -5.7% | 8.5% | 3.2% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 37.6% | 28.5% | 15.2% | 8.5% | |
| Agritrade Resources Ltd ($1131) | -2.3% | 2.7% | 5.8% | 6.4% | 6.9% |
| |
|---|
| Median (23 companies) | 0.6% | -2.6% | -2.1% | -5.2% | -0.9% |
|---|
| Shougang Fushan Resources Group Ltd ($639) | 15.4% | 11.2% | 6.2% | -1.1% | -3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Feishang Anthracite Resources Ltd ($1738) | | | | 24.3x | |
| China Coal Energy Co Ltd ($1898) | 0.5x | 1.9x | 4.9x | 9.7x | 14.4x |
| Loudong General Nice Resources China Holdings Ltd ($988) | 2.0x | 5.8x | 4.4x | 6.0x | |
| Yanzhou Coal Mining Co Ltd ($1171) | 1.1x | 2.9x | 6.2x | 4.9x | |
| Kinetic Mines and Energy Ltd ($1277) | | | | 4.5x | 5.9x |
| |
|---|
| Median (8 companies) | 1.6x | 2.9x | 4.7x | 4.7x | 3.6x |
|---|
| Shougang Fushan Resources Group Ltd ($639) | -0.9x | -0.6x | 0.2x | -0.0x | |
