China Communications Construction Co Ltd Debt surged on 11.5% in 2015 while Net Debt / EBITDA dropped on 0.3x from 5.0x to 4.7x
28/03/2016 • About China Communications Construction Co Ltd (
$1800) • By InTwits
China Communications Construction Co 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: 8.5% in 2015 vs. 8.6% in 2014 vs. 7.8% in 2011
- China Communications Construction Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 0.9%.
- CAPEX is quite volatile: 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012, 12,054 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.7x while industry average is 5.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Communications Construction Co Ltd ($1800) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 294,281 | 295,321 | 331,798 | 366,042 | 403,616 | 10.3% |
| Gross Profit | 27,908 | 32,598 | 33,938 | 39,272 | 49,754 | 26.7% |
| SG&A | 10,360 | 11,496 | 12,045 | 14,543 | 18,639 | 28.2% |
| EBITDA | 22,815 | 25,741 | 27,261 | 31,621 | 34,378 | 8.7% |
| Net Income | 11,761 | 12,277 | 12,568 | 13,985 | 15,828 | 13.2% |
Balance Sheet
|
|---|
| Cash | 45,234 | 67,503 | 81,238 | 71,823 | 94,960 | 32.2% |
| Short Term Debt | 54,289 | 69,187 | 87,818 | 91,034 | 86,605 | -4.9% |
| Long Term Debt | 51,756 | 75,058 | 99,157 | 137,801 | 168,578 | 22.3% |
Cash flow
|
|---|
| Capex | 8,076 | 7,364 | 8,096 | 11,032 | 14,016 | 27.0% |
Ratios
|
|---|
| Revenue growth | 7.9% | 0.4% | 12.4% | 10.3% | 10.3% | |
| EBITDA growth | 16.8% | 12.8% | 5.9% | 16.0% | 8.7% | |
| Gross Margin | 9.5% | 11.0% | 10.2% | 10.7% | 12.3% | 1.6% |
| EBITDA Margin | 7.8% | 8.7% | 8.2% | 8.6% | 8.5% | -0.1% |
| Net Income Margin | 4.0% | 4.2% | 3.8% | 3.8% | 3.9% | 0.1% |
| SG&A, % of revenue | 3.5% | 3.9% | 3.6% | 4.0% | 4.6% | 0.6% |
| CAPEX, % of revenue | 2.7% | 2.5% | 2.4% | 3.0% | 3.5% | 0.5% |
| ROIC | 9.3% | 8.5% | 7.0% | 7.0% | 6.4% | -0.7% |
| ROE | 17.7% | 15.7% | 13.8% | 13.2% | 12.0% | -1.2% |
| Net Debt/EBITDA | 2.7x | 3.0x | 3.9x | 5.0x | 4.7x | -0.3x |
Revenue and profitability
China Communications Construction Co Ltd's Revenue surged on 10.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 15.2% to 16.3% in 2015.
Gross Margin increased slightly on 1.6 pp from 10.7% to 12.3% in 2015. SG&A as a % of Revenue increased slightly on 0.64 pp from 4.0% to 4.6% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.5%. China Communications Construction Co Ltd showed small growth in CAPEX/Revenue of 0.98 pp from 2.5% in 2012 to 3.5% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.0%.
Return on investment
The company operates at good ROE (12.02%) while ROIC is low (6.38%). ROIC decreased slightly on 0.65 pp from 7.0% to 6.4% in 2015. ROE decreased slightly on 1.2 pp from 13.2% to 12.0% in 2015.
Leverage (Debt)
Debt level is 4.7x Net Debt / EBITDA and 7.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 5.0x to 4.7x in 2015. Debt surged on 11.5% in 2015 while cash jumped on 32.2% in 2015.
Appendix 1: Peers in Engineering&Construction
Below you can find China Communications Construction Co Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| Richly Field China Development Ltd ($313) | | | -45.0% | 464.2% | -65.7% |
| Junefield Department Store Group Ltd ($758) | 22.9% | -20.3% | -24.9% | 126.6% | |
| CNQC International Holdings Ltd ($1240) | | 21.6% | 91.0% | 103.7% | 807.4% |
| Wison Engineering Services Co Ltd ($2236) | | -2.9% | -24.9% | 90.3% | -22.6% |
| China Resources and Transportation Group Ltd ($269) | | 939.8% | 3,196.3% | 87.9% | -41.6% |
| |
|---|
| Median (43 companies) | 8.6% | 10.3% | 21.3% | 16.3% | 12.6% |
|---|
| China Communications Construction Co Ltd ($1800) | | 0.4% | 12.4% | 10.3% | 10.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | 2.2% | 43.6% | 65.6% | 64.0% | |
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% |
| Kingbo Strike Ltd ($1421) | 22.9% | 32.4% | 44.4% | 40.3% | 30.7% |
| Broad Greenstate International Co Ltd ($1253) | 16.7% | 20.1% | 28.7% | 35.8% | 36.7% |
| |
|---|
| Median (38 companies) | 12.6% | 13.4% | 14.4% | 14.1% | 15.1% |
|---|
| China Communications Construction Co Ltd ($1800) | 9.5% | 11.0% | 10.2% | 10.7% | 12.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huayu Expressway Group Ltd ($1823) | -0.5% | 46.2% | 73.8% | 77.1% | |
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | 51.6% |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | 60.9% |
| Grand Ming Group Holdings Ltd ($1271) | 17.5% | 10.0% | 15.8% | 31.0% | 19.0% |
| |
|---|
| Median (44 companies) | 9.2% | 9.8% | 8.3% | 7.1% | 8.1% |
|---|
| China Communications Construction Co Ltd ($1800) | 7.8% | 8.7% | 8.2% | 8.6% | 8.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| Shun Cheong Holdings ($650) | 7.2% | 16.4% | 8.0% | 23.9% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 6.1% | 4.2% | 7.7% | 20.2% | 3.2% |
| KFM Kingdom Holdings Ltd ($3816) | 6.5% | 4.6% | 11.5% | 14.9% | 9.6% |
| |
|---|
| Median (44 companies) | 4.4% | 2.4% | 2.6% | 1.6% | 2.0% |
|---|
| China Communications Construction Co Ltd ($1800) | 2.7% | 2.5% | 2.4% | 3.0% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| Ngai Shun Holdings Ltd ($1246) | | 68.8% | 77.2% | 45.2% | 31.0% |
| Broad Greenstate International Co Ltd ($1253) | | 33.2% | 85.1% | 51.2% | 26.0% |
| CNQC International Holdings Ltd ($1240) | 23.1% | 12.2% | 22.3% | 40.4% | 21.8% |
| Tysan Holdings Ltd ($687) | 16.1% | 4.1% | 10.6% | 14.0% | 21.0% |
| |
|---|
| Median (36 companies) | 6.9% | 6.1% | 5.5% | 4.3% | 2.8% |
|---|
| China Communications Construction Co Ltd ($1800) | 9.3% | 8.5% | 7.0% | 7.0% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| Chun Wo Development Holdings Ltd ($711) | | 14.3x | 8.1x | 12.6x | 15.9x |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | 41.7x |
| |
|---|
| Median (37 companies) | 0.5x | 1.0x | 1.0x | 1.7x | 2.2x |
|---|
| China Communications Construction Co Ltd ($1800) | 2.7x | 3.0x | 3.9x | 5.0x | 4.7x |
