AVIC International Holdings Ltd reports 39.3% CAPEX growth and 1.1% Revenue growth
28/03/2016 • About AVIC International Holdings Ltd (
$161) • By InTwits
AVIC International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.6% in 2015 vs. 10.3% in 2014 vs. 8.8% in 2011
- AVIC International Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 385 in 2015, 667 in 2014, 774 in 2013, 1,195 in 2012, 1,862 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.9%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AVIC International Holdings Ltd ($161) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 27,817 | 31,253 | 37,262 | 33,960 | 34,351 | 1.1% |
| Gross Profit | 3,269 | 3,909 | 5,006 | 5,619 | 5,724 | 1.9% |
| SG&A | 2,632 | 2,934 | 4,112 | 2,919 | 3,302 | 13.1% |
| EBITDA | 2,435 | 2,697 | 3,639 | 3,485 | 3,291 | -5.6% |
| Net Income | 675 | 971 | 1,031 | 642 | 1,212 | 88.8% |
Balance Sheet
|
|---|
| Cash | 3,250 | 4,038 | 5,076 | 4,834 | 11,781 | 143.7% |
| Short Term Debt | 9,565 | 11,318 | 13,205 | 9,429 | 8,772 | -7.0% |
| Long Term Debt | 5,062 | 4,045 | 6,835 | 10,477 | 10,221 | -2.4% |
Cash flow
|
|---|
| Capex | 2,417 | 1,866 | 2,164 | 2,611 | 3,638 | 39.3% |
Ratios
|
|---|
| Revenue growth | 299.4% | 12.3% | 19.2% | -8.9% | 1.1% | |
| EBITDA growth | 117.7% | 10.8% | 34.9% | -4.2% | -5.6% | |
| Gross Margin | 11.8% | 12.5% | 13.4% | 16.5% | 16.7% | 0.1% |
| EBITDA Margin | 8.8% | 8.6% | 9.8% | 10.3% | 9.6% | -0.7% |
| Net Income Margin | 2.4% | 3.1% | 2.8% | 1.9% | 3.5% | 1.6% |
| SG&A, % of revenue | 9.5% | 9.4% | 11.0% | 8.6% | 9.6% | 1.0% |
| CAPEX, % of revenue | 8.7% | 6.0% | 5.8% | 7.7% | 10.6% | 2.9% |
| ROIC | 6.8% | 6.4% | 6.5% | 4.5% | 2.9% | -1.6% |
| ROE | 15.7% | 13.7% | 15.2% | 10.0% | 15.5% | 5.6% |
| Net Debt/EBITDA | 4.7x | 4.2x | 4.1x | 4.3x | 2.2x | -2.1x |
Revenue and profitability
The company's Revenue increased slightly on 1.1% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.68 pp from 10.3% to 9.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 1.0 pp from 8.6% to 9.6% in 2015.
Net Income marign increased slightly on 1.6 pp from 1.9% to 3.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.6% in 2015. The company's CAPEX/Revenue increased on 4.6 pp from 6.0% in 2012 to 10.6% in 2015. For the last three years the average CAPEX/Revenue was 8.0%.AVIC International Holdings Ltd maintained rich investment policy and has spent a lot to CAPEX (111% of EBITDA).
Return on investment
The company operates at good ROE (15.52%) while ROIC is low (2.87%). ROIC decreased slightly on 1.6 pp from 4.5% to 2.9% in 2015. ROE increased on 5.6 pp from 10.0% to 15.5% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 5.8x. Net Debt / EBITDA dropped on 2.1x from 4.3x to 2.2x in 2015. Debt decreased on 4.6% in 2015 while cash surged on 144% in 2015.
Appendix 1: Peers in Electronics
Below you can find AVIC International Holdings Ltd benchmarking vs. other companies in Electronics 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 |
|---|
| GCL New Energy Holdings Ltd ($451) | | 14.7% | -6.8% | 10.9% | 53.9% |
| Tech Pro Technology Development Ltd ($3823) | | 7.4% | -44.9% | -13.7% | 52.4% |
| Nanjing Sample Technology Co Ltd ($1708) | | 36.1% | 8.0% | 15.4% | 34.8% |
| AAC Technologies Holdings Inc ($2018) | | 54.8% | 28.9% | 9.7% | 32.2% |
| Ningbo Wanhao Holdings Co Ltd ($8249) | | 5.7% | 412.4% | -6.9% | 28.9% |
| |
|---|
| Median (40 companies) | 7.0% | -1.0% | 3.6% | 7.2% | 0.4% |
|---|
| AVIC International Holdings Ltd ($161) | | 12.3% | 19.2% | -8.9% | 1.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Advanced Card Systems Holdings Ltd ($8210) | 51.4% | 54.0% | 58.1% | 49.5% | 49.6% |
| AAC Technologies Holdings Inc ($2018) | 44.0% | 44.2% | 42.7% | 41.4% | 41.5% |
| TeleEye Holdings Ltd ($8051) | 51.6% | 44.0% | 42.1% | 38.5% | 37.0% |
| Wasion Group Holdings Ltd ($3393) | 30.3% | 32.8% | 35.1% | 34.2% | 30.2% |
| Datronix Holdings Ltd ($889) | 41.3% | 32.9% | 32.0% | 34.1% | 34.6% |
| |
|---|
| Median (48 companies) | 13.6% | 14.1% | 13.8% | 13.9% | 16.8% |
|---|
| AVIC International Holdings Ltd ($161) | 11.8% | 12.5% | 13.4% | 16.5% | 16.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 35.2% | 35.8% | 35.8% | 34.9% | 34.8% |
| GCL New Energy Holdings Ltd ($451) | 12.1% | 10.8% | 11.1% | 12.6% | 33.0% |
| Daiwa Associate Holdings ($1037) | 1.6% | 2.4% | 3.8% | 2.8% | 25.6% |
| Wasion Group Holdings Ltd ($3393) | 18.9% | 18.8% | 21.2% | 22.0% | 19.3% |
| Tongda Group Holdings Ltd ($698) | 15.3% | 17.1% | 16.8% | 18.4% | 18.9% |
| |
|---|
| Median (40 companies) | 9.3% | 6.5% | 6.0% | 4.6% | 6.1% |
|---|
| AVIC International Holdings Ltd ($161) | 8.8% | 8.6% | 9.8% | 10.3% | 9.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| GCL New Energy Holdings Ltd ($451) | 11.1% | 5.5% | 5.1% | 5.4% | 401.2% |
| National Electronic Hldgs ($213) | 14.9% | 3.4% | 18.1% | 7.1% | 49.7% |
| Irico Group Electronics Co Ltd ($438) | 92.0% | 39.9% | 30.4% | 17.4% | 25.8% |
| Kingwell Group Ltd ($1195) | 26.2% | 8.6% | 5.4% | 5.3% | 21.4% |
| AAC Technologies Holdings Inc ($2018) | 25.9% | 18.7% | 8.7% | 19.6% | 18.4% |
| |
|---|
| Median (40 companies) | 3.3% | 3.7% | 3.0% | 3.7% | 3.2% |
|---|
| AVIC International Holdings Ltd ($161) | 8.7% | 6.0% | 5.8% | 7.7% | 10.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| AAC Technologies Holdings Inc ($2018) | 22.3% | 29.1% | 30.0% | 26.0% | 27.8% |
| Cowell e Holdings Inc ($1415) | | 12.5% | 27.1% | 24.4% | 25.8% |
| Tongda Group Holdings Ltd ($698) | 14.3% | 15.2% | 13.5% | 16.5% | 16.3% |
| Varitronix International Ltd ($710) | 11.7% | 8.7% | 17.5% | 11.4% | 11.6% |
| Trigiant Group Ltd ($1300) | 17.9% | 17.8% | 18.3% | 15.2% | 11.2% |
| |
|---|
| Median (40 companies) | 5.4% | 4.3% | 3.5% | 3.0% | 2.4% |
|---|
| AVIC International Holdings Ltd ($161) | 6.8% | 6.4% | 6.5% | 4.5% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| National Electronic Hldgs ($213) | 43.0x | 16.3x | 30.2x | 84.8x | 19.9x |
| Sino-Tech International Holdings Ltd ($724) | | | 15.7x | 24.7x | |
| Eyang Holdings Group Co Ltd ($117) | 4.2x | 3.3x | 3.7x | 17.9x | |
| SAS Dragon Hldg Ltd ($1184) | 2.8x | 7.1x | 2.0x | 6.4x | |
| Willas-Array Electronics Holdings Ltd ($854) | 2.8x | 2.2x | 2.6x | 5.7x | 5.4x |
| |
|---|
| Median (36 companies) | 0.6x | 1.0x | 1.1x | 0.8x | 0.1x |
|---|
| AVIC International Holdings Ltd ($161) | 4.7x | 4.2x | 4.1x | 4.3x | 2.2x |
