China Aerospace International Holdings Ltd reports 137% Net Income growth while 2.5 pp EBITDA Margin decline from 12.4% to 9.9%
24/03/2016 • About China Aerospace International Holdings Ltd (
$31) • By InTwits
China Aerospace International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Aerospace International Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.6%
- China Aerospace International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.0%. At the same time it's in pair with industry average of 8.4%.
- CAPEX is quite volatile: 59.5 in 2015, 124 in 2014, 196 in 2013, 12.5 in 2012, 213 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Aerospace International Holdings Ltd ($31) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,187 | 2,615 | 2,535 | 2,788 | 2,766 | -0.8% |
| Gross Profit | 444 | 514 | 531 | 610 | 560 | -8.1% |
| SG&A | 310 | 345 | 342 | 358 | 357 | -0.4% |
| EBITDA | 206 | 239 | 305 | 347 | 274 | -20.9% |
| Net Income | 387 | 247 | 617 | 416 | 985 | 136.9% |
Balance Sheet
|
|---|
| Cash | 1,151 | 1,022 | 1,768 | 1,726 | 2,046 | 18.5% |
| Short Term Debt | 234 | 124 | 132 | 37 | 1,340 | 3,483.0% |
| Long Term Debt | 47 | 200 | 1,240 | 1,712 | 590 | -65.5% |
Cash flow
|
|---|
| Capex | 86 | 133 | 161 | 183 | 218 | 18.9% |
Ratios
|
|---|
| Revenue growth | 16.3% | 19.6% | -3.1% | 10.0% | -0.8% | |
| EBITDA growth | -14.3% | 15.9% | 27.4% | 13.8% | -20.9% | |
| Gross Margin | 20.3% | 19.7% | 20.9% | 21.9% | 20.3% | -1.6% |
| EBITDA Margin | 9.4% | 9.1% | 12.0% | 12.4% | 9.9% | -2.5% |
| Net Income Margin | 17.7% | 9.4% | 24.3% | 14.9% | 35.6% | 20.7% |
| SG&A, % of revenue | 14.2% | 13.2% | 13.5% | 12.9% | 12.9% | 0.0% |
| CAPEX, % of revenue | 3.9% | 5.1% | 6.3% | 6.6% | 7.9% | 1.3% |
| ROIC | 2.7% | 2.3% | 2.6% | 2.8% | 1.6% | -1.3% |
| ROE | 10.4% | 6.2% | 14.0% | 8.6% | 18.4% | 9.8% |
| Net Debt/EBITDA | -4.2x | -2.9x | -1.3x | 0.1x | -0.4x | -0.5x |
Revenue and profitability
China Aerospace International Holdings Ltd's Revenue decreased slightly on 0.79% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.5 pp from 12.4% to 9.9% in 2015.
Gross Margin decreased slightly on 1.6 pp from 21.9% to 20.3% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign surged on 20.7 pp from 14.9% to 35.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 7.9%. CAPEX/Revenue increased on 2.8 pp from 5.1% in 2012 to 7.9% in 2015. Average CAPEX/Revenue for the last three years was 6.9%.Battling declining revenue China Aerospace International Holdings Ltd invested a large share of EBITDA (79.4%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at good ROE (18.41%) while ROIC is low (1.57%). ROIC decreased slightly on 1.3 pp from 2.8% to 1.6% in 2015. ROE increased on 9.8 pp from 8.6% to 18.4% in 2015.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 7.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 0.1x to -0.4x in 2015. Debt surged on 10.4% in 2015 while cash surged on 18.5% in 2015.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find China Aerospace International Holdings Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| CSR Corp Ltd ($1766) | 24.0% | 12.0% | 9.7% | 123.7% | |
| Sunny Optical Technology Group Co Ltd ($2382) | | 59.5% | 45.9% | 45.0% | 26.9% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 1.5% | 22.2% | 43.2% | |
| Time Watch Investments Ltd ($2033) | | 28.2% | 25.4% | 25.6% | 10.4% |
| China International Marine Containers Group Co Ltd ($2039) | 23.4% | -15.6% | 6.6% | 21.4% | |
| |
|---|
| Median (25 companies) | 20.0% | -7.1% | 0.1% | 6.7% | -8.2% |
|---|
| China Aerospace International Holdings Ltd ($31) | | 19.6% | -3.1% | 10.0% | -0.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Time Watch Investments Ltd ($2033) | 58.5% | 60.2% | 60.6% | 65.0% | 68.1% |
| Man Sang International Ltd ($938) | 34.7% | 42.4% | 32.8% | 60.3% | 78.6% |
| Lee & Man Chemical Co Ltd ($746) | 46.7% | 34.3% | 35.7% | 41.9% | 39.6% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 35.0% | 33.2% | 35.1% | 37.4% | |
| Launch Tech Co Ltd ($2488) | 39.2% | 27.4% | 33.6% | 33.6% | |
| |
|---|
| Median (24 companies) | 21.0% | 19.8% | 19.7% | 24.9% | 22.4% |
|---|
| China Aerospace International Holdings Ltd ($31) | 20.3% | 19.7% | 20.9% | 21.9% | 20.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 42.8% | 30.4% | 31.3% | 38.4% | 37.6% |
| Man Sang International Ltd ($938) | 18.7% | 24.9% | 15.4% | 37.0% | 33.8% |
| IPE Group Ltd ($929) | 24.9% | 25.6% | 22.5% | 29.5% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 19.5% | 18.4% | 19.8% | 20.6% | |
| Time Watch Investments Ltd ($2033) | 16.8% | 17.6% | 16.8% | 19.4% | 20.5% |
| |
|---|
| Median (25 companies) | 10.7% | 8.0% | 8.2% | 9.5% | 3.5% |
|---|
| China Aerospace International Holdings Ltd ($31) | 9.4% | 9.1% | 12.0% | 12.4% | 9.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 1.4% | 5.8% | 51.1% | 33.7% | 22.8% |
| KEE Holdings Co Ltd ($2011) | 20.9% | 21.8% | 43.7% | 24.9% | |
| China International Marine Containers Group Co Ltd ($2039) | 4.7% | 3.9% | 12.1% | 18.5% | |
| China Environmental Energy Investment Ltd ($986) | 77.7% | 6.1% | 0.4% | 17.9% | 47.6% |
| TK Group Holdings Ltd ($2283) | 8.9% | 13.3% | 8.1% | 13.7% | 7.6% |
| |
|---|
| Median (25 companies) | 5.2% | 4.7% | 4.2% | 4.2% | 4.2% |
|---|
| China Aerospace International Holdings Ltd ($31) | 3.9% | 5.1% | 6.3% | 6.6% | 7.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TK Group Holdings Ltd ($2283) | 34.0% | 36.8% | 31.1% | 29.4% | 27.6% |
| Time Watch Investments Ltd ($2033) | 30.5% | 34.5% | 27.1% | 27.8% | 27.9% |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 21.4% | 16.9% | 17.7% | 20.0% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 12.2% | 19.7% | 17.8% | 16.5% | 19.4% |
| CSR Corp Ltd ($1766) | 13.4% | 11.1% | 11.2% | 15.3% | |
| |
|---|
| Median (25 companies) | 8.0% | 4.4% | 4.4% | 4.4% | 1.3% |
|---|
| China Aerospace International Holdings Ltd ($31) | 2.7% | 2.3% | 2.6% | 2.8% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South China China Ltd ($413) | 2.3x | | 37.5x | 2,842.3x | 27.3x |
| Continental Holdings Ltd ($513) | 8.3x | | 20.1x | 92.9x | 4,203.6x |
| China International Marine Containers Group Co Ltd ($2039) | 2.8x | 4.0x | 4.7x | 5.8x | |
| VS International Group Ltd ($1002) | 8.6x | 5.1x | 6.5x | 4.4x | 3.3x |
| Launch Tech Co Ltd ($2488) | -0.4x | 7.6x | 2.4x | 3.9x | |
| |
|---|
| Median (21 companies) | 0.1x | -0.2x | -0.2x | -0.2x | 0.2x |
|---|
| China Aerospace International Holdings Ltd ($31) | -4.2x | -2.9x | -1.3x | 0.1x | -0.4x |
