Strong Petrochemical Holdings Ltd Debt dropped on 63.5% in 2015
23/03/2016 • About Strong Petrochemical Holdings Ltd (
$852) • By InTwits
Strong Petrochemical Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 0.9% in 2015, -1.7% in 2014, 1.7% in 2013, 0.9% in 2012, 3.3% in 2011
- Strong Petrochemical Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 2.7%
- It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Strong Petrochemical Holdings Ltd ($852) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 7,891 | 11,112 | 20,876 | 8,181 | 11,642 | 42.3% |
| Gross Profit | 364 | 206 | 669 | 108 | 405 | 274.3% |
| SG&A | | 140 | 336 | 278 | 273 | -1.7% |
| EBITDA | 262 | 97 | 345 | -138 | 100 | -172.3% |
| Net Income | 102 | -109 | 373 | -355 | 33 | -109.3% |
Balance Sheet
|
|---|
| Cash | 401 | 156 | 345 | 267 | 242 | -9.3% |
| Short Term Debt | 727 | 852 | 1,685 | 1,644 | 579 | -64.8% |
| Long Term Debt | 0 | 0 | 48 | 90 | 54 | -40.4% |
Cash flow
|
|---|
| Capex | 1 | 58 | 179 | 71 | 42 | -40.2% |
Ratios
|
|---|
| Revenue growth | 38.1% | 40.8% | 87.9% | -60.8% | 42.3% | |
| EBITDA growth | -15.9% | -63.2% | 257.4% | -140.0% | -172.3% | |
| Gross Margin | 4.6% | 1.9% | 3.2% | 1.3% | 3.5% | 2.2% |
| EBITDA Margin | 3.3% | 0.9% | 1.7% | -1.7% | 0.9% | 2.5% |
| Net Income Margin | 1.3% | -1.0% | 1.8% | -4.3% | 0.3% | 4.6% |
| SG&A, % of revenue | | 1.3% | 1.6% | 3.4% | 2.3% | -1.1% |
| CAPEX, % of revenue | 0.0% | 0.5% | 0.9% | 0.9% | 0.4% | -0.5% |
| ROIC | 16.8% | 4.4% | 14.0% | -5.4% | 2.7% | 8.1% |
| ROE | 12.7% | -13.8% | 35.0% | -28.9% | 3.0% | 31.9% |
| Net Debt/EBITDA | 1.2x | 7.2x | 4.0x | | 3.9x | 3.9x |
Revenue and profitability
Strong Petrochemical Holdings Ltd's Revenue jumped on 42.3% 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 increased on 2.2 pp from 1.3% to 3.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 3.4% to 2.3% in 2015.
Net Income marign increased on 4.6 pp from -4.3% to 0.28% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.36% in 2015. Strong Petrochemical Holdings Ltd's CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 0.70%.
Return on investment
The company operates at low ROIC (2.74%) and ROE (3.05%). ROIC increased on 8.1 pp from -5.4% to 2.7% in 2015. ROE jumped on 31.9 pp from -28.9% to 3.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.9x and Debt / EBITDA is 6.3x. Net Debt / EBITDA jumped3.9x from to 3.9x in 2015. Debt dropped on 63.5% in 2015 while cash decreased on 9.3% in 2015.
Appendix 1: Peers in Chemicals
Below you can find Strong Petrochemical Holdings Ltd benchmarking vs. other companies in Chemicals 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 |
|---|
| Bestway International Holdings Ltd ($718) | | -25.4% | -62.1% | 330.3% | 238.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 39.7% | -33.6% | 5.5% | 29.1% | |
| China XLX Fertiliser Ltd ($1866) | | 7.0% | 0.6% | 28.0% | 13.9% |
| Century Sunshine Group Holdings Ltd ($509) | | 68.7% | 32.0% | 26.4% | 21.4% |
| Landing International Development Ltd ($582) | | 2.1% | 15.9% | 23.3% | 10.4% |
| |
|---|
| Median (32 companies) | 28.6% | 2.0% | 8.5% | 2.2% | -2.2% |
|---|
| Strong Petrochemical Holdings Ltd ($852) | | 40.8% | 87.9% | -60.8% | 42.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 74.3% | 70.5% | 69.1% | 70.8% | 69.9% |
| China Flavors & Fragrances Co Ltd ($3318) | 41.3% | 46.8% | 48.6% | 47.8% | 48.9% |
| Smartac Group China Holdings Ltd ($395) | 17.3% | -1.8% | 11.2% | 40.4% | |
| Bracell Ltd ($1768) | 40.1% | 30.5% | 37.3% | 37.3% | 38.4% |
| Yingde Gases Group Co Ltd ($2168) | 34.2% | 31.7% | 31.0% | 32.1% | 32.2% |
| |
|---|
| Median (32 companies) | 20.3% | 20.8% | 18.7% | 18.4% | 22.7% |
|---|
| Strong Petrochemical Holdings Ltd ($852) | 4.6% | 1.9% | 3.2% | 1.3% | 3.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 66.4% | 63.8% | 59.1% | 60.0% | 58.3% |
| Bracell Ltd ($1768) | 30.1% | 22.3% | 30.8% | 38.2% | 35.9% |
| Yingde Gases Group Co Ltd ($2168) | 32.3% | 29.4% | 29.8% | 32.3% | 33.4% |
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | |
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | 26.1% |
| |
|---|
| Median (32 companies) | 15.4% | 14.5% | 13.6% | 12.5% | 13.4% |
|---|
| Strong Petrochemical Holdings Ltd ($852) | 3.3% | 0.9% | 1.7% | -1.7% | 0.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Landing International Development Ltd ($582) | 27.9% | 7.2% | 29.6% | 419.5% | 247.4% |
| China Zenith Chemical Group Ltd ($362) | 36.8% | 147.3% | 55.7% | 67.4% | 152.2% |
| Smartac Group China Holdings Ltd ($395) | 22.5% | 14.0% | 4.7% | 49.3% | |
| China Flavors & Fragrances Co Ltd ($3318) | 16.4% | 15.8% | 20.1% | 42.4% | 35.8% |
| Bracell Ltd ($1768) | 24.4% | 22.3% | 64.3% | 35.4% | 11.7% |
| |
|---|
| Median (32 companies) | 8.5% | 8.4% | 8.9% | 5.8% | 8.2% |
|---|
| Strong Petrochemical Holdings Ltd ($852) | 0.0% | 0.5% | 0.9% | 0.9% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 34.6% | 28.7% | 25.2% | 26.2% | 23.3% |
| Tiande Chemical Holdings Ltd ($609) | 24.4% | 26.2% | 29.4% | 20.7% | 20.6% |
| Century Sunshine Group Holdings Ltd ($509) | 3.5% | 11.3% | 15.9% | 16.4% | 13.3% |
| Fufeng Group Ltd ($546) | 13.9% | 9.6% | 10.8% | 11.6% | 10.3% |
| Yingde Gases Group Co Ltd ($2168) | 14.7% | 10.6% | 11.5% | 11.5% | 10.9% |
| |
|---|
| Median (32 companies) | 7.8% | 7.3% | 7.7% | 5.9% | 6.5% |
|---|
| Strong Petrochemical Holdings Ltd ($852) | 16.8% | 4.4% | 14.0% | -5.4% | 2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.4x | 2.2x | 4.6x | 18.1x | |
| China XLX Fertiliser Ltd ($1866) | 2.4x | 2.6x | 5.1x | 5.8x | 5.1x |
| Ngai Hing Hong Co Ltd ($1047) | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 4.3x | 14.1x | 6.5x | 5.3x | |
| Sinofert Holdings Ltd ($297) | 4.3x | 2.9x | 32.4x | 5.0x | |
| |
|---|
| Median (26 companies) | 1.3x | 1.0x | 2.0x | 1.4x | 0.9x |
|---|
