Zijin Mining Group Co Ltd revenue jumped on 26.9% in 2015 while EBITDA Margin decreased on 3.8 pp from 10.1% to 6.4%
25/03/2016 • About Zijin Mining Group Co Ltd (
$2899) • By InTwits
Zijin Mining Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 6.4% in 2015 vs. 10.1% in 2014 vs. 27.2% in 2011
- EBITDA Margin is quite volatile: 6.4% in 2015, 10.1% in 2014, 14.2% in 2013, 21.6% in 2012, 27.2% in 2011
- Zijin Mining Group Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.1%. At the same time it's a lot of higher than industry average of 6.0%.
- 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 potentially unprofitable business model: ROIC is at 2.6%
- It operates with high leverage: Net Debt/EBITDA is 5.4x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zijin Mining Group Co Ltd ($2899) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 39,382 | 47,874 | 49,052 | 57,922 | 73,494 | 26.9% |
| Gross Profit | 11,845 | 11,499 | 8,206 | 7,040 | 5,486 | -22.1% |
| SG&A | 1,823 | 2,175 | 2,405 | 2,740 | 2,693 | -1.7% |
| EBITDA | 10,698 | 10,327 | 6,979 | 5,871 | 4,669 | -20.5% |
| Net Income | 5,713 | 5,211 | 2,125 | 2,345 | 1,656 | -29.4% |
Balance Sheet
|
|---|
| Cash | 4,791 | 6,467 | 3,878 | 3,320 | 4,792 | 44.3% |
| Short Term Debt | 4,032 | 7,249 | 4,434 | 6,182 | 12,684 | 105.2% |
| Long Term Debt | 5,348 | 9,642 | 12,404 | 16,263 | 17,551 | 7.9% |
Cash flow
|
|---|
| Capex | 7,476 | 7,996 | 8,621 | 6,221 | 4,858 | -21.9% |
Ratios
|
|---|
| Revenue growth | 41.8% | 21.6% | 2.5% | 18.1% | 26.9% | |
| EBITDA growth | 27.4% | -3.5% | -32.4% | -15.9% | -20.5% | |
| Gross Margin | 30.1% | 24.0% | 16.7% | 12.2% | 7.5% | -4.7% |
| EBITDA Margin | 27.2% | 21.6% | 14.2% | 10.1% | 6.4% | -3.8% |
| Net Income Margin | 14.5% | 10.9% | 4.3% | 4.0% | 2.3% | -1.8% |
| SG&A, % of revenue | 4.6% | 4.5% | 4.9% | 4.7% | 3.7% | -1.1% |
| CAPEX, % of revenue | 19.0% | 16.7% | 17.6% | 10.7% | 6.6% | -4.1% |
| ROIC | 25.3% | 18.8% | 9.2% | 6.5% | 2.6% | -3.8% |
| ROE | 24.4% | 19.6% | 7.6% | 8.4% | 6.0% | -2.5% |
| Net Debt/EBITDA | 0.4x | 1.0x | 1.9x | 3.3x | 5.4x | 2.2x |
Revenue and profitability
Zijin Mining Group Co Ltd's Revenue surged on 26.9% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.3 pp from 1.4% to 4.7% in FY2015.
Gross Margin decreased on 4.7 pp from 12.2% to 7.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 4.7% to 3.7% in 2015.
Net Income marign decreased slightly on 1.8 pp from 4.0% to 2.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 6.6%. The company showed big decline in CAPEX/Revenue of 10.1 pp from 16.7% in 2012 to 6.6% in 2015. For the last three years the average CAPEX/Revenue was 11.6%.The company has spent a lot to CAPEX (104% of EBITDA) to secure its growth.
Return on investment
The company operates at low ROIC (2.65%) and ROE (5.96%). ROIC decreased on 3.8 pp from 6.5% to 2.6% in 2015. ROE decreased on 2.5 pp from 8.4% to 6.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.4x and Debt / EBITDA is 6.5x. Net Debt / EBITDA surged on 2.2x from 3.3x to 5.4x in 2015. Debt surged on 34.7% in 2015 while cash surged on 44.3% in 2015.
Appendix 1: Peers in Mining
Below we provide Zijin Mining Group Co Ltd benchmarking against other companies in Mining 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 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 24.0% | 4.8% | -44.7% | 303.0% | |
| Huili Resources Group Ltd ($1303) | -47.8% | -33.6% | -91.6% | 219.4% | |
| North Mining Shares Co Ltd ($433) | | -5.5% | -57.1% | 187.0% | -45.9% |
| China Kingstone Mining Holdings Ltd ($1380) | 4,275.3% | -94.5% | -55.6% | 155.2% | |
| |
|---|
| Median (48 companies) | 36.6% | 5.0% | 0.6% | -5.9% | -8.1% |
|---|
| Zijin Mining Group Co Ltd ($2899) | | 21.6% | 2.5% | 18.1% | 26.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| China Polymetallic Mining Ltd ($2133) | 76.9% | 81.8% | 74.2% | 51.8% | 38.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 64.7% | 63.9% | 54.9% | 51.2% | |
| Hengshi Mining Investments Ltd ($1370) | 54.6% | 32.4% | 55.3% | 50.1% | |
| |
|---|
| Median (48 companies) | 19.1% | 13.4% | 13.8% | 15.5% | 23.6% |
|---|
| Zijin Mining Group Co Ltd ($2899) | 30.1% | 24.0% | 16.7% | 12.2% | 7.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | |
| China Polymetallic Mining Ltd ($2133) | -322.0% | 62.8% | 58.5% | 54.1% | 2.8% |
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Gold International Resources Corp Ltd ($2099) | | 41.7% | 38.3% | 47.3% | 33.7% |
| Hengshi Mining Investments Ltd ($1370) | 45.7% | 22.8% | 52.0% | 45.4% | |
| |
|---|
| Median (48 companies) | 5.9% | 4.7% | 7.5% | 4.7% | 14.3% |
|---|
| Zijin Mining Group Co Ltd ($2899) | 27.2% | 21.6% | 14.2% | 10.1% | 6.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Huili Resources Group Ltd ($1303) | 3.9% | 181.0% | 1,508.6% | 279.5% | |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| China Gold International Resources Corp Ltd ($2099) | | 64.7% | 156.1% | 95.6% | 81.4% |
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | |
| |
|---|
| Median (48 companies) | 14.3% | 17.4% | 15.7% | 15.8% | 11.9% |
|---|
| Zijin Mining Group Co Ltd ($2899) | 19.0% | 16.7% | 17.6% | 10.7% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Silver Group Ltd ($815) | 48.0% | 57.6% | 31.6% | 35.8% | |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| |
|---|
| Median (49 companies) | 2.9% | 0.9% | 2.7% | 0.0% | 0.8% |
|---|
| Zijin Mining Group Co Ltd ($2899) | 25.3% | 18.8% | 9.2% | 6.5% | 2.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 10.5x | 2.2x |
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 0.9x | 8.4x | 39.4x | 10.3x | |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | 8.0x |
| |
|---|
| Median (27 companies) | 1.4x | 2.1x | 2.0x | 4.6x | 2.8x |
|---|
| Zijin Mining Group Co Ltd ($2899) | 0.4x | 1.0x | 1.9x | 3.3x | 5.4x |
