China Zhongwang Holdings Ltd Debt surged on 54.4% in 2015 and Revenue increased slightly on 1.3%
24/03/2016 • About China Zhongwang Holdings Ltd (
$1333) • By InTwits
China Zhongwang Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Zhongwang Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 48.2%. At the same time it's a lot of higher than industry average of 19.2%.
- CAPEX is quite volatile: 10,197 in 2015, 8,760 in 2014, 5,958 in 2013, 7,605 in 2012, 2,584 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.9%
- It operates with high leverage: Net Debt/EBITDA is 6.2x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Zhongwang Holdings Ltd ($1333) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,306 | 13,497 | 14,307 | 15,971 | 16,171 | 1.3% |
| Gross Profit | 2,222 | 3,260 | 3,841 | 4,467 | 5,320 | 19.1% |
| SG&A | 395 | 925 | 760 | 909 | 1,086 | 19.5% |
| EBITDA | 2,267 | 3,014 | 3,477 | 3,863 | 4,709 | 21.9% |
| Net Income | 1,105 | 1,807 | 2,127 | 2,477 | 2,805 | 13.2% |
Balance Sheet
|
|---|
| Cash | 10,122 | 7,890 | 9,317 | 9,463 | 10,200 | 7.8% |
| Short Term Debt | 4,846 | 6,551 | 9,800 | 13,438 | 17,408 | 29.5% |
| Long Term Debt | 3,510 | 5,279 | 8,392 | 11,988 | 21,861 | 82.4% |
Cash flow
|
|---|
| Capex | 2,584 | 7,605 | 5,958 | 8,760 | 10,197 | 16.4% |
Ratios
|
|---|
| Revenue growth | -2.1% | 31.0% | 6.0% | 11.6% | 1.3% | |
| EBITDA growth | -46.4% | 33.0% | 15.3% | 11.1% | 21.9% | |
| Gross Margin | 21.6% | 24.2% | 26.8% | 28.0% | 32.9% | 4.9% |
| EBITDA Margin | 22.0% | 22.3% | 24.3% | 24.2% | 29.1% | 4.9% |
| Net Income Margin | 10.7% | 13.4% | 14.9% | 15.5% | 17.3% | 1.8% |
| SG&A, % of revenue | 3.8% | 6.9% | 5.3% | 5.7% | 6.7% | 1.0% |
| CAPEX, % of revenue | 25.1% | 56.3% | 41.6% | 54.8% | 63.1% | 8.2% |
| ROIC | 7.8% | 9.5% | 8.8% | 7.4% | 6.9% | -0.5% |
| ROE | 7.1% | 10.9% | 11.4% | 11.3% | 11.2% | -0.1% |
| Net Debt/EBITDA | -0.8x | 1.3x | 2.6x | 4.1x | 6.2x | 2.0x |
Revenue and profitability
China Zhongwang Holdings Ltd's Revenue increased slightly on 1.3% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.9 pp from 24.2% to 29.1% in 2015.
Gross Margin increased on 4.9 pp from 28.0% to 32.9% in 2015. SG&A as a % of Revenue increased slightly on 1.0 pp from 5.7% to 6.7% in 2015.
Net Income marign increased slightly on 1.8 pp from 15.5% to 17.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 63.1%. CAPEX/Revenue increased on 6.7 pp from 56.3% in 2012 to 63.1% in 2015. It's average CAPEX/Revenue for the last three years was 53.2%.China Zhongwang Holdings Ltd maintained rich investment policy and has spent a lot to CAPEX (217% of EBITDA).
Return on investment
The company operates at low ROIC (6.94%) and ROE (11.21%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 6.2x Net Debt / EBITDA and 8.3x Debt / EBITDA. Net Debt / EBITDA jumped on 2.0x from 4.1x to 6.2x in 2015. Debt jumped on 54.4% in 2015 while cash increased on 7.8% in 2015.
Appendix 1: Peers in Metal Fabricate/Hardware
Below you can find China Zhongwang Holdings Ltd benchmarking vs. other companies in Metal Fabricate/Hardware 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 |
|---|
| Burwill Holdings Ltd ($24) | 25.4% | -35.5% | -9.2% | 39.2% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 100.8% | 16.3% | -48.4% | 32.2% | |
| EVA Precision Industrial Holdings Ltd ($838) | | 19.7% | 12.2% | 30.1% | 2.3% |
| Lung Kee Bermuda Holdings ($255) | | -5.2% | -7.5% | 8.2% | -5.2% |
| Shougang Concord Century Holdings Ltd ($103) | | -4.9% | 10.0% | -3.8% | -17.2% |
| |
|---|
| Median (8 companies) | 65.7% | 2.8% | 11.1% | 2.2% | -4.0% |
|---|
| China Zhongwang Holdings Ltd ($1333) | | 31.0% | 6.0% | 11.6% | 1.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVA Precision Industrial Holdings Ltd ($838) | 24.7% | 21.6% | 24.1% | 26.2% | 26.5% |
| New Times Energy Corp Ltd ($166) | 1.0% | -2.7% | 0.8% | 22.6% | |
| Ka Shui International Holdings Ltd ($822) | 19.4% | 22.5% | 22.1% | 19.6% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 15.1% | 17.0% | 15.4% | 11.6% | |
| Shougang Concord Century Holdings Ltd ($103) | 9.3% | 1.0% | 11.5% | 7.5% | 1.3% |
| |
|---|
| Median (7 companies) | 9.3% | 3.7% | 11.5% | 11.6% | 2.0% |
|---|
| China Zhongwang Holdings Ltd ($1333) | 21.6% | 24.2% | 26.8% | 28.0% | 32.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVA Precision Industrial Holdings Ltd ($838) | 16.8% | 10.4% | 9.9% | 16.7% | 14.9% |
| Ka Shui International Holdings Ltd ($822) | 12.6% | 14.3% | 9.5% | 12.0% | |
| Lung Kee Bermuda Holdings ($255) | 19.3% | 15.3% | 14.8% | 11.7% | 15.2% |
| Shougang Concord Century Holdings Ltd ($103) | 8.8% | -0.2% | 11.2% | 5.2% | -4.0% |
| Burwill Holdings Ltd ($24) | 0.6% | -0.8% | -0.6% | -0.4% | |
| |
|---|
| Median (8 companies) | 9.9% | 8.9% | 7.7% | 2.4% | 5.4% |
|---|
| China Zhongwang Holdings Ltd ($1333) | 22.0% | 22.3% | 24.3% | 24.2% | 29.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| New Times Energy Corp Ltd ($166) | 9.0% | 11.4% | 1.7% | 52.1% | |
| Chu Kong Petroleum & Natural Gas Steel Pipe Holdings Ltd ($1938) | 20.3% | 25.9% | 71.7% | 31.4% | |
| Ka Shui International Holdings Ltd ($822) | 5.0% | 9.3% | 7.4% | 11.1% | |
| Lung Kee Bermuda Holdings ($255) | 21.9% | 11.6% | 9.6% | 11.0% | 4.5% |
| EVA Precision Industrial Holdings Ltd ($838) | 15.3% | 9.2% | 6.3% | 6.3% | 8.0% |
| |
|---|
| Median (8 companies) | 12.1% | 10.3% | 6.8% | 8.6% | 3.5% |
|---|
| China Zhongwang Holdings Ltd ($1333) | 25.1% | 56.3% | 41.6% | 54.8% | 63.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EVA Precision Industrial Holdings Ltd ($838) | 10.5% | 3.3% | 1.9% | 9.1% | 6.4% |
| Ka Shui International Holdings Ltd ($822) | 10.5% | 14.6% | 7.1% | 7.6% | |
| Lung Kee Bermuda Holdings ($255) | 12.3% | 6.7% | 4.9% | 3.2% | 4.8% |
| Burwill Holdings Ltd ($24) | 0.8% | -1.8% | -1.5% | -1.6% | |
| Shougang Concord Century Holdings Ltd ($103) | 0.6% | -4.8% | 1.6% | -1.9% | -6.7% |
| |
|---|
| Median (8 companies) | 6.1% | 2.9% | 1.8% | -1.7% | -1.0% |
|---|
| China Zhongwang Holdings Ltd ($1333) | 7.8% | 9.5% | 8.8% | 7.4% | 6.9% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shougang Concord Century Holdings Ltd ($103) | 7.6x | | 6.2x | 13.2x | |
| Ka Shui International Holdings Ltd ($822) | 0.7x | 0.9x | 1.3x | 1.7x | |
| EVA Precision Industrial Holdings Ltd ($838) | -0.4x | 1.1x | 1.8x | 1.2x | 0.7x |
| Lung Kee Bermuda Holdings ($255) | -0.7x | -1.5x | -1.6x | -0.9x | -1.4x |
| |
|---|
| Median (4 companies) | 1.9x | 1.1x | 4.0x | 1.4x | -0.4x |
|---|
| China Zhongwang Holdings Ltd ($1333) | -0.8x | 1.3x | 2.6x | 4.1x | 6.2x |
