Huadian Power International Corp Ltd reports 26.7% CAPEX decline and 12.2% Revenue decline
24/03/2016 • About Huadian Power International Corp Ltd (
$1071) • By InTwits
Huadian Power International Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 40.8% in 2015 vs. 34.1% in 2014 vs. 16.3% in 2011
- Huadian Power International Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.1%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: 695 in 2015, 1,089 in 2014, 1,323 in 2013, 4,260 in 2012, 3,481 in 2011
- The company has business model with average profitability: ROIC is at 10.0%
- It operates with high leverage: Net Debt/EBITDA is 4.0x while industry average is -0.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huadian Power International Corp Ltd ($1071) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 54,281 | 59,080 | 66,049 | 76,036 | 66,789 | -12.2% |
| Gross Profit | 4,817 | | | 20,620 | | -100.0% |
| SG&A | 1,520 | 1,830 | 2,263 | 1,977 | 3,596 | 81.8% |
| EBITDA | 8,836 | 13,266 | 19,993 | 25,934 | 27,217 | 4.9% |
| Net Income | 79 | 1,447 | 4,097 | 6,356 | 7,329 | 15.3% |
Balance Sheet
|
|---|
| Cash | 2,120 | 3,060 | 2,920 | 5,786 | 9,238 | 59.7% |
| Short Term Debt | 41,899 | 41,115 | 43,465 | 51,746 | 40,592 | -21.6% |
| Long Term Debt | 66,085 | 75,171 | 71,105 | 74,179 | 77,669 | 4.7% |
Cash flow
|
|---|
| Capex | 12,411 | 16,177 | 15,328 | 19,444 | 14,244 | -26.7% |
Ratios
|
|---|
| Revenue growth | 20.1% | 8.8% | 11.8% | 15.1% | -12.2% | |
| EBITDA growth | 38.0% | 50.1% | 50.7% | 29.7% | 4.9% | |
| Gross Margin | 8.9% | | | 27.1% | | -27.1% |
| EBITDA Margin | 16.3% | 22.5% | 30.3% | 34.1% | 40.8% | 6.6% |
| Net Income Margin | 0.1% | 2.4% | 6.2% | 8.4% | 11.0% | 2.6% |
| SG&A, % of revenue | 2.8% | 3.1% | 3.4% | 2.6% | 5.4% | 2.8% |
| CAPEX, % of revenue | 22.9% | 27.4% | 23.2% | 25.6% | 21.3% | -4.2% |
| ROIC | 2.7% | 5.0% | 8.4% | 10.4% | 10.0% | -0.3% |
| ROE | 0.5% | 8.1% | 19.3% | 22.2% | 18.8% | -3.4% |
| Net Debt/EBITDA | 12.0x | 8.5x | 5.6x | 4.6x | 4.0x | -0.6x |
Revenue and profitability
Huadian Power International Corp Ltd's Revenue dropped on 12.2% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.6 pp from 34.1% to 40.8% in 2015.
SG&A as a % of Revenue increased on 2.8 pp from 2.6% to 5.4% in 2015.
Net Income marign increased on 2.6 pp from 8.4% to 11.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Huadian Power International Corp Ltd had CAPEX/Revenue of 21.3%. The company showed decline in CAPEX/Revenue of 6.1 pp from 27.4% in 2012 to 21.3% in 2015. For the last three years the average CAPEX/Revenue was 23.4%.Huadian Power International Corp Ltd invested a big chunk of EBITDA (52.3%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROE (18.83%) while ROIC is low (10.05%). ROIC showed almost no change in 2015. ROE decreased on 3.4 pp from 22.2% to 18.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.0x and Debt / EBITDA is 4.3x. Net Debt / EBITDA dropped on 0.6x from 4.6x to 4.0x in 2015. Debt decreased on 6.1% in 2015 while cash jumped on 59.7% in 2015.
Appendix 1: Peers in Electric
Below you can find Huadian Power International Corp Ltd benchmarking vs. other companies in Electric 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 |
|---|
| Huaneng Renewables Corp Ltd ($958) | | 26.0% | 46.7% | 4.1% | 19.6% |
| CGN Power Co Ltd ($1816) | | 10.7% | -1.2% | 19.3% | 12.3% |
| Huadian Fuxin Energy Corp Ltd ($816) | | 56.0% | 16.7% | 4.9% | 10.4% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | | 2.1% | -1.8% | 2.9% | 6.7% |
| China Power New Energy Development Co Ltd ($735) | | -2.3% | 20.3% | 7.2% | 2.6% |
| |
|---|
| Median (14 companies) | 35.0% | 8.8% | 11.3% | 4.8% | -2.4% |
|---|
| Huadian Power International Corp Ltd ($1071) | | 8.8% | 11.8% | 15.1% | -12.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Assets Holdings Ltd ($6) | 60.5% | 60.0% | 63.5% | 85.6% | 99.4% |
| China Power New Energy Development Co Ltd ($735) | 57.1% | 73.3% | 70.8% | 72.0% | 74.9% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.5% | 60.1% | 58.6% | 54.0% | 53.7% |
| CGN Power Co Ltd ($1816) | 48.3% | 46.5% | 46.9% | 48.6% | 47.9% |
| Huaneng Power International Inc ($902) | | | | 24.8% | 28.4% |
| |
|---|
| Median (7 companies) | 52.7% | 46.5% | 52.8% | 48.6% | 50.8% |
|---|
| Huadian Power International Corp Ltd ($1071) | 8.9% | | | 27.1% | |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 110.2% | 94.0% | 80.5% | 91.3% | 93.1% |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.8% | 72.6% | 77.6% | 73.3% | 71.7% |
| Power Assets Holdings Ltd ($6) | 64.6% | 66.2% | 68.0% | 2,533.1% | 71.2% |
| CGN Power Co Ltd ($1816) | 64.2% | 66.0% | 62.6% | 60.5% | 59.4% |
| China Power New Energy Development Co Ltd ($735) | 41.6% | 54.6% | 51.6% | 54.5% | 55.1% |
| |
|---|
| Median (14 companies) | 25.3% | 30.3% | 36.4% | 37.7% | 47.0% |
|---|
| Huadian Power International Corp Ltd ($1071) | 16.3% | 22.5% | 30.3% | 34.1% | 40.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Enerchina Holdings Ltd ($622) | 54.3% | 24.1% | 28.3% | 3.8% | 321.6% |
| Huaneng Renewables Corp Ltd ($958) | 240.9% | 163.4% | 124.0% | 217.8% | 171.9% |
| China Power New Energy Development Co Ltd ($735) | 21.5% | 82.2% | 80.1% | 119.5% | 99.0% |
| Huadian Fuxin Energy Corp Ltd ($816) | 78.6% | 62.2% | 54.3% | 91.8% | 96.0% |
| CGN Power Co Ltd ($1816) | 78.4% | 47.5% | 57.2% | 94.5% | 50.0% |
| |
|---|
| Median (14 companies) | 24.3% | 28.5% | 28.3% | 16.9% | 19.5% |
|---|
| Huadian Power International Corp Ltd ($1071) | 22.9% | 27.4% | 23.2% | 25.6% | 21.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CLP Holdings Ltd ($2) | 7.8% | 7.0% | 4.8% | 8.5% | 12.8% |
| China Resources Power Holdings Co Ltd ($836) | 5.9% | 7.7% | 9.7% | 8.0% | 11.0% |
| Huaneng Power International Inc ($902) | 4.0% | 7.3% | 10.3% | 11.3% | 10.9% |
| China Power International Development Ltd ($2380) | 4.0% | 5.7% | 7.5% | 8.0% | 10.1% |
| Amber Energy Ltd ($90) | 7.6% | 5.4% | 4.6% | 3.6% | 8.6% |
| |
|---|
| Median (14 companies) | 5.2% | 5.4% | 6.0% | 6.0% | 5.8% |
|---|
| Huadian Power International Corp Ltd ($1071) | 2.7% | 5.0% | 8.4% | 10.4% | 10.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CGN Meiya Power Holdings Co Ltd ($1811) | 5.7x | 9.1x | 8.1x | 4.3x | 8.6x |
| CGN Power Co Ltd ($1816) | 4.7x | 6.5x | 6.7x | 7.8x | 8.4x |
| China Power New Energy Development Co Ltd ($735) | 5.9x | 4.8x | 5.5x | 6.4x | 7.9x |
| Huadian Fuxin Energy Corp Ltd ($816) | 9.3x | 6.9x | 6.2x | 6.5x | 7.4x |
| Huaneng Renewables Corp Ltd ($958) | 6.0x | 7.7x | 6.6x | 7.3x | 7.1x |
| |
|---|
| Median (12 companies) | 5.9x | 5.6x | 5.5x | 5.1x | 5.2x |
|---|
| Huadian Power International Corp Ltd ($1071) | 12.0x | 8.5x | 5.6x | 4.6x | 4.0x |
