China Conch Venture Holdings Ltd reports 60.2% CAPEX decline while 17.7% Revenue growth
24/03/2016 • About China Conch Venture Holdings Ltd (
$586) • By InTwits
China Conch Venture Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Conch Venture Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.4%. At the same time it's a lot of higher than industry average of 8.8%.
- CAPEX is quite volatile: 155 in 2015, 390 in 2014, 90.6 in 2013, 173 in 2012, 197 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.6%
- It operates with high leverage: Net Debt/EBITDA is -2.4x while industry average is -20.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Conch Venture Holdings Ltd ($586) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,582 | 1,250 | 1,591 | 1,748 | 2,057 | 17.7% |
| Gross Profit | 521 | 402 | 493 | 574 | 782 | 36.3% |
| SG&A | 66 | 69 | 107 | 119 | 169 | 42.0% |
| EBITDA | 413 | 346 | 413 | 539 | 685 | 27.0% |
| Net Income | 2,228 | 1,299 | 1,837 | 2,239 | 1,944 | -13.1% |
Balance Sheet
|
|---|
| Cash | 317 | 276 | 3,698 | 2,058 | 2,332 | 13.3% |
| Short Term Debt | 328 | 527 | 580 | 809 | 228 | -71.8% |
| Long Term Debt | 0 | 30 | 1,104 | 130 | 480 | 269.2% |
Cash flow
|
|---|
| Capex | 197 | 173 | 91 | 390 | 155 | -60.2% |
Ratios
|
|---|
| Revenue growth | -12.7% | -21.0% | 27.3% | 9.8% | 17.7% | |
| EBITDA growth | -26.6% | -16.2% | 19.4% | 30.5% | 27.0% | |
| Gross Margin | 33.0% | 32.2% | 31.0% | 32.8% | 38.0% | 5.2% |
| EBITDA Margin | 26.1% | 27.7% | 26.0% | 30.8% | 33.3% | 2.4% |
| Net Income Margin | 140.8% | 103.9% | 115.4% | 128.1% | 94.5% | -33.6% |
| SG&A, % of revenue | 4.2% | 5.6% | 6.7% | 6.8% | 8.2% | 1.4% |
| CAPEX, % of revenue | 12.5% | 13.8% | 5.7% | 22.3% | 7.6% | -14.8% |
| ROIC | 4.9% | 3.3% | 2.9% | 3.1% | 3.6% | 0.5% |
| ROE | 30.4% | 15.1% | 16.8% | 16.2% | 12.5% | -3.7% |
| Net Debt/EBITDA | 0.0x | 0.8x | -4.9x | -2.1x | -2.4x | -0.3x |
Revenue and profitability
The company's Revenue surged on 17.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.8 pp from 21.6% to 23.4% in 2015.
Gross Margin increased on 5.2 pp from 32.8% to 38.0% in 2015. SG&A as a % of Revenue increased slightly on 1.4 pp from 6.8% to 8.2% in 2015.
Net Income marign dropped on 33.6 pp from 128% to 94.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
China Conch Venture Holdings Ltd's CAPEX/Revenue was 7.6% in 2015. CAPEX/Revenue decreased on 6.3 pp from 13.8% in 2012 to 7.6% in 2015. Average CAPEX/Revenue for the last three years was 11.9%.
Return on investment
The company operates at good ROE (12.50%) while ROIC is low (3.63%). ROIC increased slightly on 0.54 pp from 3.1% to 3.6% in 2015. ROE decreased on 3.7 pp from 16.2% to 12.5% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.3x from -2.1x to -2.4x in 2015. Debt dropped on 24.6% in 2015 while cash jumped on 13.3% in 2015.
Management team
Ji Qinying is a the company's CEO. Ji Qinying has spent 11 years at the company.
Appendix 1: Peers in Commercial Services
Below you can find China Conch Venture Holdings Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| Global Energy Resources International Group Ltd ($8192) | | -61.9% | -27.8% | 2,912.9% | 19.7% |
| Dingyi Group Investment Ltd ($508) | | 8.8% | -95.9% | 1,361.2% | -32.6% |
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | | 34.6% | 86.9% | 37.2% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Goldpac Group Ltd ($3315) | | 52.3% | 64.4% | 36.8% | 10.8% |
| |
|---|
| Median (62 companies) | 34.2% | 9.0% | 4.7% | 9.4% | 6.1% |
|---|
| China Conch Venture Holdings Ltd ($586) | | -21.0% | 27.3% | 9.8% | 17.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| U Banquet Group Holding Ltd ($8107) | | | | 76.5% | 74.5% |
| China Communication Telecom Services Co Ltd ($8206) | -56.6% | 61.6% | 58.6% | 69.1% | 70.2% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| |
|---|
| Median (57 companies) | 32.9% | 31.0% | 29.2% | 30.9% | 30.9% |
|---|
| China Conch Venture Holdings Ltd ($586) | 33.0% | 32.2% | 31.0% | 32.8% | 38.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | 73.6% |
| Shenzhen Expressway Co Ltd ($548) | 80.4% | 74.3% | 79.4% | 76.6% | 53.0% |
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | 61.6% | 84.9% | 75.9% | 80.9% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| Anhui Expressway Co Ltd ($995) | 62.7% | 56.9% | 54.1% | 60.4% | |
| |
|---|
| Median (62 companies) | 16.0% | 16.0% | 13.4% | 11.0% | 8.5% |
|---|
| China Conch Venture Holdings Ltd ($586) | 26.1% | 27.7% | 26.0% | 30.8% | 33.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 16.8% | 3.9% | 7.0% | 59.8% | |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | |
| Finet Group Ltd ($8317) | 3.9% | 10.3% | 9.1% | 26.0% | 8.4% |
| HC International Inc ($2280) | 15.1% | 8.5% | 28.7% | 24.7% | |
| Dragon Crown Group Holdings Ltd ($935) | 2.5% | 37.2% | 52.0% | 23.0% | 13.0% |
| |
|---|
| Median (61 companies) | 3.7% | 3.1% | 4.0% | 3.6% | 4.3% |
|---|
| China Conch Venture Holdings Ltd ($586) | 12.5% | 13.8% | 5.7% | 22.3% | 7.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mega Expo Holdings Ltd ($1360) | | 270.5% | 481.1% | 54.4% | 10.1% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| U Banquet Group Holding Ltd ($8107) | | 98.5% | 23.9% | 28.0% | -3.7% |
| PPS International Holdings Ltd ($8201) | | 101.6% | 35.6% | 23.8% | -13.7% |
| |
|---|
| Median (62 companies) | 5.2% | 6.2% | 5.7% | 5.5% | 3.5% |
|---|
| China Conch Venture Holdings Ltd ($586) | 4.9% | 3.3% | 2.9% | 3.1% | 3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | 4.1x |
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | |
| Anxian Yuan China Holdings Ltd ($922) | | | 4.6x | 3.8x | 0.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | 6.2x |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| |
|---|
| Median (41 companies) | -0.1x | -0.1x | -0.7x | -0.4x | -0.5x |
|---|
| China Conch Venture Holdings Ltd ($586) | 0.0x | 0.8x | -4.9x | -2.1x | -2.4x |
