China First Chemical Holdings Ltd reports 76.7% CAPEX growth and 72.5% Revenue growth
24/03/2016 • About China First Chemical Holdings Ltd (
$2121) • By InTwits
China First Chemical Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China First Chemical Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.9%. At the same time it's in pair with industry average of 21.2%.
- CAPEX is quite volatile: 384 in 2015, 217 in 2014, 214 in 2013, 339 in 2012, 135 in 2011
- The company has business model with low profitability: ROIC is at 7.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China First Chemical Holdings Ltd ($2121) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,525 | 1,620 | 1,510 | 1,238 | 2,136 | 72.5% |
| Gross Profit | 493 | 465 | 467 | 371 | 395 | 6.6% |
| SG&A | | 105 | 108 | 104 | 151 | 45.7% |
| EBITDA | 452 | 431 | 453 | 366 | 406 | 11.0% |
| Net Income | 268 | 250 | 250 | 171 | 129 | -24.4% |
Balance Sheet
|
|---|
| Cash | 926 | 779 | 784 | 725 | 471 | -35.1% |
| Short Term Debt | 477 | 559 | 451 | 616 | 1,026 | 66.5% |
| Long Term Debt | 137 | 91 | 68 | 347 | 383 | 10.4% |
Cash flow
|
|---|
| Capex | 135 | 339 | 214 | 217 | 384 | 76.7% |
Ratios
|
|---|
| Revenue growth | 25.8% | 6.2% | -6.8% | -18.0% | 72.5% | |
| EBITDA growth | 51.1% | -4.7% | 5.0% | -19.2% | 11.0% | |
| Gross Margin | 32.3% | 28.7% | 30.9% | 29.9% | 18.5% | -11.4% |
| EBITDA Margin | 29.7% | 26.6% | 30.0% | 29.6% | 19.0% | -10.5% |
| Net Income Margin | 17.6% | 15.4% | 16.6% | 13.8% | 6.0% | -7.8% |
| SG&A, % of revenue | | 6.5% | 7.2% | 8.4% | 7.1% | -1.3% |
| CAPEX, % of revenue | 8.9% | 20.9% | 14.2% | 17.5% | 18.0% | 0.4% |
| ROIC | 23.9% | 16.6% | 15.3% | 9.9% | 7.5% | -2.4% |
| ROE | 25.8% | 16.4% | 14.3% | 8.8% | 6.3% | -2.6% |
| Net Debt/EBITDA | -0.7x | -0.3x | -0.6x | 0.7x | 2.3x | 1.7x |
Revenue and profitability
The company's Revenue surged on 72.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 23.7 pp from 7.4% to -16.3% in FY2015.
Gross Margin dropped on 11.4 pp from 29.9% to 18.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.3 pp from 8.4% to 7.1% in 2015.
Net Income marign decreased on 7.8 pp from 13.8% to 6.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 18.0%. The company showed decline in CAPEX/Revenue of 2.9 pp from 20.9% in 2012 to 18.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 16.6%.To fuel this fast growth China First Chemical Holdings Ltd invested a large share of EBITDA (94.5%) to CAPEX.
Return on investment
The company operates at low ROIC (7.55%) and ROE (6.26%). ROIC decreased on 2.4 pp from 9.9% to 7.5% in 2015. ROE decreased on 2.6 pp from 8.8% to 6.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 3.5x. Net Debt / EBITDA surged on 1.7x from 0.7x to 2.3x in 2015. Debt jumped on 46.3% in 2015 while cash dropped on 35.1% in 2015.
Appendix 1: Peers in Chemicals
Below you can find China First Chemical 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) | 32.5% | 2.0% | 9.7% | 2.2% | -0.6% |
|---|
| China First Chemical Holdings Ltd ($2121) | | 6.2% | -6.8% | -18.0% | 72.5% |
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) | 19.8% | 18.9% | 17.3% | 16.8% | 22.4% |
|---|
| China First Chemical Holdings Ltd ($2121) | 32.3% | 28.7% | 30.9% | 29.9% | 18.5% |
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% |
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | 26.1% |
| Tiande Chemical Holdings Ltd ($609) | 21.7% | 25.5% | 27.3% | 25.1% | 27.8% |
| |
|---|
| Median (32 companies) | 15.2% | 12.3% | 11.8% | 10.7% | 11.8% |
|---|
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | 19.0% |
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) | 8.3% | 6.8% | 8.5% | 5.4% | 8.2% |
|---|
| China First Chemical Holdings Ltd ($2121) | 8.9% | 20.9% | 14.2% | 17.5% | 18.0% |
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% | 6.9% | 7.7% | 5.6% | 5.9% |
|---|
| China First Chemical Holdings Ltd ($2121) | 23.9% | 16.6% | 15.3% | 9.9% | 7.5% |
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 | 13.5x |
| 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 (25 companies) | 1.3x | 1.6x | 2.2x | 1.4x | 1.7x |
|---|
| China First Chemical Holdings Ltd ($2121) | -0.7x | -0.3x | -0.6x | 0.7x | 2.3x |
