Tsingtao Brewery Co Ltd CAPEX dropped on 32.6% in 2015 and Revenue decreased on 4.7%
28/03/2016 • About Tsingtao Brewery Co Ltd (
$168) • By InTwits
Tsingtao Brewery Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tsingtao Brewery Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.4%. At the same time it's in pair with industry average of 10.8%.
- CAPEX is quite volatile: 160 in 2015, 1,440 in 2014, 1,385 in 2013, 1,145 in 2012, 620 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tsingtao Brewery Co Ltd ($168) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,134 | 23,580 | 26,063 | 26,867 | 25,604 | -4.7% |
| Gross Profit | 7,717 | 8,147 | 9,055 | 8,967 | 8,412 | -6.2% |
| SG&A | 5,415 | 5,979 | 6,298 | 6,112 | 6,352 | 3.9% |
| EBITDA | 2,795 | 2,784 | 2,749 | 2,848 | 2,044 | -28.2% |
| Net Income | 1,738 | 1,759 | 1,973 | 1,990 | 1,713 | -13.9% |
Balance Sheet
|
|---|
| Cash | 5,550 | 7,072 | 8,488 | 5,266 | 7,575 | 43.8% |
| Short Term Debt | 249 | 232 | 2,037 | 526 | 911 | 73.2% |
| Long Term Debt | 1,789 | 1,862 | 5 | 3 | 2 | -38.5% |
Cash flow
|
|---|
| Capex | 2,442 | 2,378 | 2,036 | 1,949 | 1,314 | -32.6% |
Ratios
|
|---|
| Revenue growth | 15.9% | 11.6% | 10.5% | 3.1% | -4.7% | |
| EBITDA growth | 12.4% | -0.4% | -1.3% | 3.6% | -28.2% | |
| Gross Margin | 36.5% | 34.5% | 34.7% | 33.4% | 32.9% | -0.5% |
| EBITDA Margin | 13.2% | 11.8% | 10.5% | 10.6% | 8.0% | -2.6% |
| Net Income Margin | 8.2% | 7.5% | 7.6% | 7.4% | 6.7% | -0.7% |
| SG&A, % of revenue | 25.6% | 25.4% | 24.2% | 22.7% | 24.8% | 2.1% |
| CAPEX, % of revenue | 11.6% | 10.1% | 7.8% | 7.3% | 5.1% | -2.1% |
| ROIC | 16.4% | 13.4% | 12.0% | 12.2% | 6.7% | -5.5% |
| ROE | 16.8% | 14.9% | 14.9% | 13.5% | 10.8% | -2.8% |
| Net Debt/EBITDA | -1.3x | -1.8x | -2.3x | -1.7x | -3.3x | -1.6x |
Revenue and profitability
Tsingtao Brewery Co Ltd's Revenue decreased on 4.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.86 pp from 1.7% to 2.6% in 2015.
Gross Margin decreased slightly on 0.52 pp from 33.4% to 32.9% in 2015. SG&A as a % of Revenue increased on 2.1 pp from 22.7% to 24.8% in 2015.
Net Income marign decreased slightly on 0.72 pp from 7.4% to 6.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.1% in 2015. Tsingtao Brewery Co Ltd showed decline in CAPEX/Revenue of 5.0 pp from 10.1% in 2012 to 5.1% in 2015. Average CAPEX/Revenue for the last three years was 6.7%.Battling declining revenue the company invested a large share of EBITDA (64.3%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (6.71%) and ROE (10.76%). ROIC decreased on 5.5 pp from 12.2% to 6.7% in 2015. ROE decreased on 2.8 pp from 13.5% to 10.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -3.3x and Debt / EBITDA is 0.4x. Net Debt / EBITDA dropped on 1.6x from -1.7x to -3.3x in 2015. Debt jumped on 72.6% in 2015 while cash jumped on 43.8% in 2015.
Appendix 1: Peers in Beverages
Below you can find Tsingtao Brewery Co Ltd benchmarking vs. other companies in Beverages 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 |
|---|
| Sino Distillery Group Ltd ($39) | | -62.4% | -34.9% | -15.0% | 882.1% |
| Besunyen Holdings Co Ltd ($926) | | -43.5% | 2.6% | 15.7% | 17.5% |
| Vitasoy International Holdings Ltd ($345) | | 11.6% | 9.0% | 10.9% | 12.4% |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | | 7.7% | 15.4% | -1.8% | 7.7% |
| China Tontine Wines Group Ltd ($389) | | -20.7% | -73.3% | 62.7% | 2.6% |
| |
|---|
| Median (12 companies) | 18.7% | -2.7% | -13.0% | 2.0% | -6.6% |
|---|
| Tsingtao Brewery Co Ltd ($168) | | 11.6% | 10.5% | 3.1% | -4.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Besunyen Holdings Co Ltd ($926) | 87.8% | 82.5% | 83.3% | 84.3% | 89.7% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 61.6% | 64.1% | 61.2% | 62.2% | 61.4% |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 78.8% | 81.4% | 73.2% | 62.7% | 60.3% |
| Vitasoy International Holdings Ltd ($345) | 48.1% | 47.4% | 47.5% | 48.4% | 49.7% |
| San Miguel Brewery Hong Kong Ltd ($236) | 43.4% | 42.8% | 42.2% | 42.8% | 41.7% |
| |
|---|
| Median (12 companies) | 46.1% | 44.8% | 37.7% | 36.6% | 37.5% |
|---|
| Tsingtao Brewery Co Ltd ($168) | 36.5% | 34.5% | 34.7% | 33.4% | 32.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 72.2% | 73.3% | 73.2% | 69.2% | 52.8% |
| China Tianyi Holdings Ltd ($756) | 17.7% | 28.4% | 26.1% | 29.7% | 23.0% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 27.4% | 27.5% | 25.3% | 26.1% | 22.5% |
| Yantai North Andre Juice Co ($2218) | 16.1% | 14.1% | 11.9% | 15.5% | 15.7% |
| Vitasoy International Holdings Ltd ($345) | 16.1% | 14.9% | 15.2% | 14.5% | 14.4% |
| |
|---|
| Median (12 companies) | 17.7% | 17.3% | 9.6% | 11.3% | 11.6% |
|---|
| Tsingtao Brewery Co Ltd ($168) | 13.2% | 11.8% | 10.5% | 10.6% | 8.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Culiangwang Beverages Holdings Ltd ($904) | 39.1% | 26.8% | 52.2% | 81.8% | 75.8% |
| Sino Distillery Group Ltd ($39) | 6.2% | 32.4% | 6.5% | 0.4% | 12.0% |
| Vitasoy International Holdings Ltd ($345) | 14.0% | 11.1% | 4.2% | 5.1% | 11.1% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 11.2% | 18.3% | 8.8% | 12.0% | 9.2% |
| China Tianyi Holdings Ltd ($756) | 7.5% | 5.8% | 6.2% | 33.6% | 6.1% |
| |
|---|
| Median (12 companies) | 6.2% | 11.1% | 6.5% | 8.8% | 4.5% |
|---|
| Tsingtao Brewery Co Ltd ($168) | 11.6% | 10.1% | 7.8% | 7.3% | 5.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitasoy International Holdings Ltd ($345) | 23.8% | 20.8% | 20.6% | 21.7% | 23.5% |
| Tenfu Cayman Holdings Co Ltd ($6868) | 26.1% | 19.4% | 17.9% | 15.7% | 11.0% |
| Tibet 5100 Water Resources Holdings Ltd ($1115) | 41.0% | 23.3% | 20.3% | 14.9% | 11.0% |
| Besunyen Holdings Co Ltd ($926) | 0.2% | -24.2% | -8.9% | 3.2% | 4.1% |
| Yantai North Andre Juice Co ($2218) | 8.4% | 6.5% | 3.2% | 4.2% | 4.1% |
| |
|---|
| Median (12 companies) | 10.3% | 9.6% | 3.0% | 2.7% | 2.6% |
|---|
| Tsingtao Brewery Co Ltd ($168) | 16.4% | 13.4% | 12.0% | 12.2% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| San Miguel Brewery Hong Kong Ltd ($236) | | | 2.0x | 1.0x | 3.8x |
| Yantai North Andre Juice Co ($2218) | 2.6x | 2.3x | 2.4x | 2.2x | 3.0x |
| China Tianyi Holdings Ltd ($756) | -3.7x | -1.0x | -0.8x | 0.9x | 1.1x |
| Tenfu Cayman Holdings Co Ltd ($6868) | -1.7x | -1.0x | -0.2x | 0.8x | 0.1x |
| Vitasoy International Holdings Ltd ($345) | -0.1x | 0.3x | 0.0x | -0.3x | -0.2x |
| |
|---|
| Median (8 companies) | -0.4x | -0.7x | 1.9x | 1.0x | -0.0x |
|---|
| Tsingtao Brewery Co Ltd ($168) | -1.3x | -1.8x | -2.3x | -1.7x | -3.3x |
