Eye on Zhejiang Expressway Co as a growth stock: its revenue grew 21.8% and EBITDA 28.3% annually over the last three years
24/03/2016 • About Zhejiang Expressway Co (
$576) • By InTwits
Zhejiang Expressway Co is a growth stock in Industrial Transportation industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Zhejiang Expressway Co showed growth in the last financial year. The company's revenue surged on 32.2% in FY2015. EBITDA also increased considerably: 43.3% for the same period.
In the last 3 years Zhejiang Expressway Co showed fast revenue growth of 21.8% from 2012 to 2015 annualy. EBITDA surged on 28.3% from 2012 to 2015 annualy.
Zhejiang Expressway Co ($576) financials for the last 5 years
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 6,781 | 6,927 | 7,851 | 9,460 | 12,507 |
|---|
| Revenue growth, % | | 2.2% | 13.3% | 20.5% | 32.2% |
|---|
| Gross margin, % | 39.9% | 34.0% | 36.9% | 37.7% | 43.6% |
|---|
| SG&A, % | 1.24% | 1.25% | 1.08% | 1.12% | 0.869% |
|---|
| EBITDA | 3,583 | 3,435 | 4,009 | 5,064 | 7,258 |
|---|
| EBITDA growth, % | | -4.1% | 16.7% | 26.3% | 43.3% |
|---|
| EBITDA margin, % | 52.8% | 49.6% | 51.1% | 53.5% | 58.0% |
|---|
| Net Income | 1,805 | 1,649 | 1,907 | 2,265 | 2,990 |
|---|
| Net Income margin, % | 26.6% | 23.8% | 24.3% | 23.9% | 23.9% |
|---|
| |
| CAPEX | 449 | 365 | 252 | 1,270 | 327 |
|---|
| CAPEX/Revenue, % | 6.62% | 5.27% | 3.21% | 13.4% | 2.61% |
|---|
| Debt | 1,463 | 2,340 | 2,150 | 13,973 | 20,169 |
|---|
| Cash | 3,120 | 3,392 | 1,807 | 3,357 | 4,983 |
|---|
| Net Debt/EBITDA | -0.5x | -0.3x | 0.1x | 2.1x | 2.1x |
|---|
| |
| ROIC, % | 13.3% | 11.2% | 13.3% | 13.2% | 15.3% |
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| ROE, % | 12.1% | 10.6% | 11.9% | 13.7% | 17.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Zhejiang Expressway Co's EBITDA margin increased on 4.50 pp from 53.5% to 58% in 2015. If we look for the longer period EBITDA margin surged on 8.40 pp from 49.6% in 2012 to 58% in 2015.
We call Zhejiang Expressway Co an attractive growth stock as together with the growth it delivers high ROIC at 15.3%. During the last three years it surged - it was 11.2% in FY2012. It's average level of ROIC for the last three years was 14.0%.
The company showed no change in Net Income margin of 0 pp from 23.9% to 23.9% in 2015. In the last 3 years Net Income margin showed almost no change on 0.100 pp from 23.8% in 2012 to 23.9% in 2015.
Zhejiang Expressway Co operates at ROE of 17.7%. It's average ROE for the last three years was 14.5%.
Capital expenditures (CAPEX)
In FY2015 Zhejiang Expressway Co had CAPEX/Revenue of 2.61%. The company's CAPEX/Revenue dropped on 2.66 pp from 5.27% in 2012 to 2.61% in 2015. Average CAPEX/Revenue for the last three years was 6.42%.
Leverage (Debt)
Zhejiang Expressway Co has medium debt level at 2.1x Net Debt/EBITDA to maintain high growth. In the longer period the company's leverage surged on 2.40x from -0.31x in 2012 to 2.09x in 2015.
