China Molybdenum Co Ltd reports 58.3% Net Income decline and 5.9 pp EBITDA Margin decline from 41.4% to 35.4%
24/03/2016 • About China Molybdenum Co Ltd (
$3993) • By InTwits
China Molybdenum Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Molybdenum Co Ltd is a company in decline: 2015 revenue growth was -37.4%, 5 years revenue CAGR was -2.1%
- China Molybdenum Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.1%. At the same time it's in pair with industry average of 8.9%.
- CAPEX is quite volatile: 277 in 2015, 337 in 2014, 123 in 2013, 228 in 2012, 94.2 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Molybdenum Co Ltd ($3993) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,002 | 5,442 | 5,266 | 6,312 | 3,954 | -37.4% |
| Gross Profit | 1,928 | 1,433 | 1,532 | 2,441 | 1,332 | -45.4% |
| SG&A | 295 | 288 | 542 | 352 | 306 | -12.9% |
| EBITDA | 1,902 | 1,357 | 1,191 | 2,611 | 1,402 | -46.3% |
| Net Income | 1,123 | 1,050 | 1,174 | 1,824 | 761 | -58.3% |
Balance Sheet
|
|---|
| Cash | 2,779 | 2,710 | 1,826 | 9,326 | 10,414 | 11.7% |
| Short Term Debt | 2,419 | 348 | 642 | 1,029 | 6,684 | 549.7% |
| Long Term Debt | 0 | 2,000 | 6,664 | 9,600 | 3,942 | -58.9% |
Cash flow
|
|---|
| Capex | 699 | 426 | 594 | 602 | 593 | -1.4% |
Ratios
|
|---|
| Revenue growth | 36.5% | -9.3% | -3.2% | 19.9% | -37.4% | |
| EBITDA growth | 22.2% | -28.7% | -12.2% | 119.2% | -46.3% | |
| Gross Margin | 32.1% | 26.3% | 29.1% | 38.7% | 33.7% | -5.0% |
| EBITDA Margin | 31.7% | 24.9% | 22.6% | 41.4% | 35.4% | -5.9% |
| Net Income Margin | 18.7% | 19.3% | 22.3% | 28.9% | 19.2% | -9.7% |
| SG&A, % of revenue | 4.9% | 5.3% | 10.3% | 5.6% | 7.7% | 2.2% |
| CAPEX, % of revenue | 11.6% | 7.8% | 11.3% | 9.5% | 15.0% | 5.5% |
| ROIC | 11.0% | 6.7% | 4.3% | 7.8% | 2.4% | -5.4% |
| ROE | 10.1% | 9.4% | 9.9% | 13.6% | 4.8% | -8.8% |
| Net Debt/EBITDA | -0.2x | -0.3x | 4.6x | 0.5x | 0.2x | -0.3x |
Revenue and profitability
China Molybdenum Co Ltd's Revenue dropped on 37.4% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.9 pp from 41.4% to 35.4% in 2015.
Gross Margin decreased on 5.0 pp from 38.7% to 33.7% in 2015. SG&A as a % of Revenue increased on 2.2 pp from 5.6% to 7.7% in 2015.
Net Income marign decreased on 9.7 pp from 28.9% to 19.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 15.0%. The company's CAPEX/Revenue increased on 7.2 pp from 7.8% in 2012 to 15.0% in 2015. It's average CAPEX/Revenue for the last three years was 11.9%.
Return on investment
The company operates at low ROIC (2.45%) and ROE (4.76%). ROIC decreased on 5.4 pp from 7.8% to 2.4% in 2015. ROE decreased on 8.8 pp from 13.6% to 4.8% in 2015.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 7.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 0.5x to 0.2x in 2015. Debt showed almost no change in 2015 while cash surged on 11.7% in 2015.
Appendix 1: Peers in Mining
Below we provide China Molybdenum Co Ltd benchmarking against other companies in Mining industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 24.0% | 4.8% | -44.7% | 303.0% | |
| Huili Resources Group Ltd ($1303) | -47.8% | -33.6% | -91.6% | 219.4% | |
| North Mining Shares Co Ltd ($433) | | -5.5% | -57.1% | 187.0% | -45.9% |
| China Kingstone Mining Holdings Ltd ($1380) | 4,275.3% | -94.5% | -55.6% | 155.2% | |
| |
|---|
| Median (48 companies) | 40.1% | 5.4% | 2.4% | -5.9% | -7.5% |
|---|
| China Molybdenum Co Ltd ($3993) | | -9.3% | -3.2% | 19.9% | -37.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| China Polymetallic Mining Ltd ($2133) | 76.9% | 81.8% | 74.2% | 51.8% | 38.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 64.7% | 63.9% | 54.9% | 51.2% | |
| Hengshi Mining Investments Ltd ($1370) | 54.6% | 32.4% | 55.3% | 50.1% | |
| |
|---|
| Median (48 companies) | 19.1% | 13.4% | 13.8% | 15.4% | 20.3% |
|---|
| China Molybdenum Co Ltd ($3993) | 32.1% | 26.3% | 29.1% | 38.7% | 33.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | |
| China Polymetallic Mining Ltd ($2133) | -322.0% | 62.8% | 58.5% | 54.1% | 2.8% |
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Gold International Resources Corp Ltd ($2099) | | 41.7% | 38.3% | 47.3% | 33.7% |
| Hengshi Mining Investments Ltd ($1370) | 45.7% | 22.8% | 52.0% | 45.4% | |
| |
|---|
| Median (48 companies) | 5.9% | 4.7% | 7.5% | 4.7% | 8.7% |
|---|
| China Molybdenum Co Ltd ($3993) | 31.7% | 24.9% | 22.6% | 41.4% | 35.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Huili Resources Group Ltd ($1303) | 3.9% | 181.0% | 1,508.6% | 279.5% | |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| China Gold International Resources Corp Ltd ($2099) | | 64.7% | 156.1% | 95.6% | 81.4% |
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | |
| |
|---|
| Median (48 companies) | 16.3% | 17.4% | 16.8% | 15.8% | 11.0% |
|---|
| China Molybdenum Co Ltd ($3993) | 11.6% | 7.8% | 11.3% | 9.5% | 15.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Silver Group Ltd ($815) | 48.0% | 57.6% | 31.6% | 35.8% | |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| |
|---|
| Median (49 companies) | 2.9% | 0.9% | 2.7% | 0.0% | -0.1% |
|---|
| China Molybdenum Co Ltd ($3993) | 11.0% | 6.7% | 4.3% | 7.8% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 10.5x | 2.2x |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 0.9x | 8.4x | 39.4x | 10.3x | |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x |
| |
|---|
| Median (27 companies) | 1.4x | 2.1x | 1.9x | 4.6x | 3.4x |
|---|
| China Molybdenum Co Ltd ($3993) | -0.2x | -0.3x | 4.6x | 0.5x | 0.2x |
