Dongjiang Environmental Co Ltd Debt surged on 61.2% in 2015 and Revenue jumped on 17.1%
24/03/2016 • About Dongjiang Environmental Co Ltd (
$895) • By InTwits
Dongjiang Environmental Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dongjiang Environmental Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.3%. At the same time it's in pair with industry average of 24.9%.
- CAPEX is quite volatile: 476 in 2015, 501 in 2014, 318 in 2013, 191 in 2012, 213 in 2011
- The company has business model with low profitability: ROIC is at 8.2%
- It operates with high leverage: Net Debt/EBITDA is 2.5x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dongjiang Environmental Co Ltd ($895) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,485 | 1,507 | 1,574 | 2,038 | 2,386 | 17.1% |
| Gross Profit | 506 | 547 | 473 | 656 | 761 | 16.1% |
| SG&A | 236 | 242 | 260 | 317 | 352 | 10.8% |
| EBITDA | 322 | 382 | 302 | 477 | 615 | 28.9% |
| Net Income | 204 | 267 | 208 | 252 | 333 | 32.2% |
Balance Sheet
|
|---|
| Cash | 252 | 1,028 | 947 | 1,028 | 858 | -16.5% |
| Short Term Debt | 197 | 208 | 333 | 733 | 1,635 | 123.2% |
| Long Term Debt | 383 | 155 | 157 | 740 | 739 | -0.2% |
Cash flow
|
|---|
| Capex | 213 | 191 | 318 | 501 | 476 | -5.0% |
Ratios
|
|---|
| Revenue growth | 29.8% | 1.5% | 4.4% | 29.5% | 17.1% | |
| EBITDA growth | 26.2% | 18.6% | -21.0% | 58.0% | 28.9% | |
| Gross Margin | 34.1% | 36.3% | 30.1% | 32.2% | 31.9% | -0.3% |
| EBITDA Margin | 21.7% | 25.4% | 19.2% | 23.4% | 25.8% | 2.4% |
| Net Income Margin | 13.7% | 17.7% | 13.2% | 12.3% | 13.9% | 1.6% |
| SG&A, % of revenue | 15.9% | 16.0% | 16.5% | 15.6% | 14.7% | -0.8% |
| CAPEX, % of revenue | 14.3% | 12.6% | 20.2% | 24.6% | 19.9% | -4.6% |
| ROIC | 17.0% | 14.3% | 7.4% | 9.4% | 8.2% | -1.3% |
| ROE | 24.1% | 17.5% | 9.6% | 10.7% | 12.8% | 2.1% |
| Net Debt/EBITDA | 1.0x | -1.7x | -1.5x | 0.9x | 2.5x | 1.5x |
Revenue and profitability
Dongjiang Environmental Co Ltd's Revenue jumped on 17.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.59 pp from 13.1% to 13.7% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased slightly on 0.83 pp from 15.6% to 14.7% in 2015.
Net Income marign increased slightly on 1.6 pp from 12.3% to 13.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 19.9% in 2015. Dongjiang Environmental Co Ltd showed CAPEX/Revenue growth of 7.3 pp from 12.6% in 2012 to 19.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 21.6%.The company invested a big chunk of EBITDA (77.4%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROE (12.80%) while ROIC is low (8.17%). ROIC decreased slightly on 1.3 pp from 9.4% to 8.2% in 2015. ROE increased on 2.1 pp from 10.7% to 12.8% in 2015.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.5x from 0.9x to 2.5x in 2015. Debt jumped on 61.2% in 2015 while cash dropped on 16.5% in 2015.
Management team
Dongjiang Environmental Co Ltd's CEO is Chen Shusheng. Chen Shusheng has 6 years tenure at the company.
Appendix 1: Peers in Environmental Control
Below we provide Dongjiang Environmental Co Ltd benchmarking against other companies in Environmental Control 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 |
|---|
| China Environmental Technology Holdings Ltd ($646) | -58.7% | 138.4% | -89.9% | 509.7% | |
| Capital Environment Holdings Ltd ($3989) | | -12.6% | 1,503.8% | 241.2% | -13.0% |
| CT Environmental Group Ltd ($1363) | 21.9% | -18.7% | 23.1% | 112.9% | |
| Asia Energy Logistics Group Ltd ($351) | | | | 92.2% | |
| Green Energy Group Ltd ($979) | 57.8% | -75.7% | 92.3% | 43.5% | |
| |
|---|
| Median (22 companies) | 17.3% | -2.1% | 18.1% | 16.0% | 3.2% |
|---|
| Dongjiang Environmental Co Ltd ($895) | | 1.5% | 4.4% | 29.5% | 17.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EverChina International Holdings Co Ltd ($202) | 40.2% | 51.8% | 53.4% | 95.3% | 95.4% |
| China Environmental Resources Group Ltd ($1130) | 12.3% | 17.2% | 11.3% | 73.7% | 34.1% |
| Ozner Water International Holding Ltd ($2014) | 56.7% | 64.5% | 67.8% | 65.4% | 58.9% |
| CT Environmental Group Ltd ($1363) | 57.7% | 65.8% | 63.1% | 56.4% | |
| ELL Environmental Holdings Ltd ($1395) | 76.4% | 77.9% | 75.8% | 56.3% | 34.7% |
| |
|---|
| Median (21 companies) | 37.9% | 35.9% | 30.6% | 31.3% | 35.1% |
|---|
| Dongjiang Environmental Co Ltd ($895) | 34.1% | 36.3% | 30.1% | 32.2% | 31.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 52.2% | 63.6% | 62.8% | 58.7% | |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 55.9% | 57.5% | 56.6% | 57.8% | |
| Ozner Water International Holding Ltd ($2014) | 31.1% | 54.8% | 59.0% | 48.5% | 31.6% |
| China Everbright International Ltd ($257) | 37.3% | 44.6% | 40.7% | 43.6% | 44.1% |
| New Universe International Group Ltd ($8068) | 42.0% | 40.2% | 37.8% | 39.3% | 36.6% |
| |
|---|
| Median (21 companies) | 10.3% | 8.1% | 3.8% | 2.3% | 16.2% |
|---|
| Dongjiang Environmental Co Ltd ($895) | 21.7% | 25.4% | 19.2% | 23.4% | 25.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ozner Water International Holding Ltd ($2014) | 179.8% | 94.9% | 102.2% | 148.5% | 90.9% |
| CT Environmental Group Ltd ($1363) | 31.8% | 65.0% | 27.1% | 51.4% | |
| New Universe International Group Ltd ($8068) | 103.4% | 16.4% | 16.6% | 44.9% | 33.3% |
| Green Energy Group Ltd ($979) | 7.5% | 169.0% | 270.8% | 41.9% | |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 25.4% | 13.2% | 10.6% | 41.7% | 88.1% |
| |
|---|
| Median (22 companies) | 10.8% | 14.8% | 13.0% | 8.8% | 8.1% |
|---|
| Dongjiang Environmental Co Ltd ($895) | 14.3% | 12.6% | 20.2% | 24.6% | 19.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 34.4% | 25.9% | 20.5% | 20.8% | |
| Ozner Water International Holding Ltd ($2014) | | 102.7% | 40.8% | 10.9% | 2.6% |
| Sound Global Ltd ($967) | 15.0% | 12.8% | 11.5% | 10.8% | |
| China Everbright International Ltd ($257) | 11.1% | 10.4% | 11.2% | 10.5% | 10.8% |
| New Universe International Group Ltd ($8068) | 5.8% | 6.3% | 6.8% | 8.9% | 8.1% |
| |
|---|
| Median (22 companies) | 2.3% | -0.7% | 1.1% | -0.6% | 2.7% |
|---|
| Dongjiang Environmental Co Ltd ($895) | 17.0% | 14.3% | 7.4% | 9.4% | 8.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Water Affairs Group Ltd ($855) | 2.8x | 2.6x | 2.7x | 3.2x | 3.4x |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 4.1x | 4.2x | 3.1x | 2.9x | |
| Sound Global Ltd ($967) | -0.7x | -0.1x | 0.3x | 1.9x | |
| CT Environmental Group Ltd ($1363) | 1.8x | 2.4x | 0.5x | 1.9x | |
| China Everbright International Ltd ($257) | 2.8x | 2.1x | 0.5x | 1.5x | 2.6x |
| |
|---|
| Median (11 companies) | 0.6x | 2.2x | 0.3x | -0.2x | -0.2x |
|---|
| Dongjiang Environmental Co Ltd ($895) | 1.0x | -1.7x | -1.5x | 0.9x | 2.5x |
