Great Wall Motor Co Ltd reports 21.3% revenue growth in 2015 and 2.4 pp EBITDA Margin decline from 17.8% to 15.5%
24/03/2016 • About Great Wall Motor Co Ltd (
$2333) • By InTwits
Great Wall Motor Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Great Wall Motor Co Ltd is a fast growth stock: 2015 revenue growth was 21.3%, 5 year revenue CAGR was 27.0% at 2015 ROIC 22.5%
- Great Wall Motor Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.3%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: 4,345 in 2015, 3,310 in 2014, 1,468 in 2013, 2,219 in 2012, 3,421 in 2011
- The company has highly profitable business model: ROIC is at 22.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Great Wall Motor Co Ltd ($2333) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 29,037 | 41,565 | 54,727 | 60,317 | 73,147 | 21.3% |
| Gross Profit | 6,443 | 10,004 | 14,189 | 15,066 | 16,276 | 8.0% |
| SG&A | 1,788 | 2,366 | 2,863 | 3,157 | 3,988 | 26.3% |
| EBITDA | 4,666 | 7,488 | 10,690 | 10,766 | 11,303 | 5.0% |
| Net Income | 3,426 | 5,692 | 8,224 | 8,042 | 8,059 | 0.2% |
Balance Sheet
|
|---|
| Cash | 6,306 | 5,596 | 5,523 | 3,082 | 2,458 | -20.2% |
| Short Term Debt | 4,004 | 4,393 | 4,791 | 4,214 | 5,864 | 39.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | 50 | |
Cash flow
|
|---|
| Capex | 3,759 | 4,445 | 7,133 | 7,229 | 5,857 | -19.0% |
Ratios
|
|---|
| Revenue growth | 30.9% | 43.1% | 31.7% | 10.2% | 21.3% | |
| EBITDA growth | | 60.5% | 42.8% | 0.7% | 5.0% | |
| Gross Margin | 22.2% | 24.1% | 25.9% | 25.0% | 22.3% | -2.7% |
| EBITDA Margin | 16.1% | 18.0% | 19.5% | 17.8% | 15.5% | -2.4% |
| Net Income Margin | 11.8% | 13.7% | 15.0% | 13.3% | 11.0% | -2.3% |
| SG&A, % of revenue | 6.2% | 5.7% | 5.2% | 5.2% | 5.5% | 0.2% |
| CAPEX, % of revenue | 12.9% | 10.7% | 13.0% | 12.0% | 8.0% | -4.0% |
| ROIC | 22.9% | 27.7% | 32.2% | 25.5% | 22.5% | -3.0% |
| ROE | 25.6% | 29.8% | 33.2% | 26.2% | 22.5% | -3.7% |
| Net Debt/EBITDA | -0.5x | -0.2x | -0.1x | 0.1x | 0.3x | 0.2x |
Revenue and profitability
The company's Revenue surged on 21.3% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 17.8% to 15.5% in 2015.
Gross Margin decreased on 2.7 pp from 25.0% to 22.3% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 2.3 pp from 13.3% to 11.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 8.0%. Great Wall Motor Co Ltd showed decline in CAPEX/Revenue of 2.7 pp from 10.7% in 2012 to 8.0% in 2015. Average CAPEX/Revenue for the last three years was 11.0%.To maintain this fast growth the company invested a large share of EBITDA (51.8%) to CAPEX.
Return on investment
The company operates at high and attractive ROIC (22.50%) and ROE (22.45%). ROIC decreased on 3.0 pp from 25.5% to 22.5% in 2015. ROE decreased on 3.7 pp from 26.2% to 22.5% in 2015.
Leverage (Debt)
Debt level is 0.3x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 0.1x to 0.3x in 2015. Debt jumped on 40.3% in 2015 while cash dropped on 20.2% in 2015.
Appendix 1: Peers in Auto Manufacturers
Below you can find Great Wall Motor Co Ltd benchmarking vs. other companies in Auto Manufacturers 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 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 7.4% | -95.4% | 511.9% | 123.0% | |
| Guangzhou Automobile Group Co Ltd ($2238) | 25.6% | 18.0% | 45.2% | 18.9% | |
| Dah Chong Hong Holdings Ltd ($1828) | | 4.1% | -12.0% | 10.0% | -3.6% |
| Sinotruk Hong Kong Ltd ($3808) | -7.7% | -23.8% | 9.0% | 7.9% | |
| Byd Co Ltd ($1211) | -3.1% | -4.2% | 16.4% | 7.2% | |
| |
|---|
| Median (9 companies) | 2.2% | -4.2% | 9.0% | 7.2% | -3.6% |
|---|
| Great Wall Motor Co Ltd ($2333) | | 43.1% | 31.7% | 10.2% | 21.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Geely Automobile Holdings Ltd ($175) | 18.2% | 18.5% | 20.1% | 18.2% | 18.2% |
| Sinotruk Hong Kong Ltd ($3808) | 15.6% | 14.9% | 16.7% | 16.9% | |
| Qingling Motors Co Ltd ($1122) | 12.4% | 12.3% | 15.2% | 15.1% | 18.7% |
| Byd Co Ltd ($1211) | 14.8% | 11.6% | 13.4% | 13.8% | |
| Dongfeng Motor Group Co Ltd ($489) | 20.1% | 5.8% | 12.6% | 13.0% | |
| |
|---|
| Median (9 companies) | 13.3% | 11.7% | 12.6% | 13.0% | 11.7% |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.2% | 24.1% | 25.9% | 25.0% | 22.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Geely Automobile Holdings Ltd ($175) | 14.4% | 14.6% | 15.8% | 15.9% | 14.4% |
| Byd Co Ltd ($1211) | 11.3% | 10.2% | 9.6% | 12.0% | |
| Qingling Motors Co Ltd ($1122) | 8.8% | 10.3% | 12.8% | 11.4% | 12.2% |
| Sinotruk Hong Kong Ltd ($3808) | 8.0% | 6.6% | 7.4% | 7.8% | |
| Dah Chong Hong Holdings Ltd ($1828) | 4.8% | 4.7% | 4.6% | 4.2% | 3.8% |
| |
|---|
| Median (9 companies) | 8.0% | 4.7% | 4.6% | 4.2% | 3.8% |
|---|
| Great Wall Motor Co Ltd ($2333) | 16.1% | 18.0% | 19.5% | 17.8% | 15.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 20.4% | 22.7% | 10.1% | 15.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 4.8% | 8.9% | 10.1% | 13.4% | 12.5% |
| Geely Automobile Holdings Ltd ($175) | 6.8% | 4.5% | 3.9% | 5.0% | 5.3% |
| Byd Co Ltd ($1211) | 16.2% | 13.0% | 11.2% | 4.2% | |
| Dongfeng Motor Group Co Ltd ($489) | 5.0% | 6.4% | 2.2% | 3.8% | |
| |
|---|
| Median (9 companies) | 4.8% | 4.5% | 2.5% | 3.8% | 1.8% |
|---|
| Great Wall Motor Co Ltd ($2333) | 12.9% | 10.7% | 13.0% | 12.0% | 8.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Geely Automobile Holdings Ltd ($175) | 15.7% | 16.2% | 19.6% | 13.4% | 15.0% |
| Wuling Motors Holdings Ltd ($305) | 6.2% | 7.2% | 7.7% | 10.0% | 11.8% |
| Dah Chong Hong Holdings Ltd ($1828) | 14.2% | 11.4% | 8.5% | 7.7% | 6.2% |
| Qingling Motors Co Ltd ($1122) | 5.5% | 4.5% | 5.7% | 5.1% | 5.8% |
| Sinotruk Hong Kong Ltd ($3808) | 5.7% | 2.5% | 3.5% | 3.9% | |
| |
|---|
| Median (9 companies) | 6.1% | 2.7% | 3.5% | 3.9% | 6.2% |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.9% | 27.7% | 32.2% | 25.5% | 22.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | | | | 13.2x | |
| Byd Co Ltd ($1211) | 2.8x | 3.4x | 6.7x | 3.9x | |
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 1.5x | 2.8x | 3.8x | 3.3x |
| Dongfeng Motor Group Co Ltd ($489) | -1.5x | | | 2.3x | |
| Wuling Motors Holdings Ltd ($305) | 2.8x | 2.0x | 1.9x | 0.8x | -0.6x |
| |
|---|
| Median (8 companies) | 2.1x | 2.0x | 2.2x | 1.6x | -1.1x |
|---|
| Great Wall Motor Co Ltd ($2333) | -0.5x | -0.2x | -0.1x | 0.1x | 0.3x |
