Bank of Communications Co Ltd reports 44.5% CAPEX growth and 7.2% Revenue growth
29/03/2016 • About Bank of Communications Co Ltd (
$3328) • By InTwits
Bank of Communications Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank of Communications Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: 25,711 in 2015, 17,793 in 2014, 15,105 in 2013, 9,763 in 2012, 6,846 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.8%
- It operates with high leverage: Net Debt/EBITDA is 4.7x while industry average is -5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bank of Communications Co Ltd ($3328) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 218,975 | 271,566 | 297,013 | 333,632 | 357,489 | 7.2% |
| Net Income | 50,735 | 58,369 | 62,295 | 65,850 | 66,528 | 1.0% |
Balance Sheet
|
|---|
| Cash | 736,999 | 816,846 | 896,556 | 938,055 | 920,228 | -1.9% |
| Short Term Debt | 860,898 | 945,422 | 1,127,727 | 1,413,622 | 1,658,651 | 17.3% |
| Long Term Debt | 81,803 | 79,572 | 82,238 | 129,547 | 170,106 | 31.3% |
Cash flow
|
|---|
| Capex | 6,846 | 9,763 | 15,105 | 17,793 | 25,711 | 44.5% |
Ratios
|
|---|
| Revenue growth | 33.3% | 24.0% | 9.4% | 12.3% | 7.2% | |
| Net Income Margin | 23.2% | 21.5% | 21.0% | 19.7% | 18.6% | -1.1% |
| CAPEX, % of revenue | 3.1% | 3.6% | 5.1% | 5.3% | 7.2% | 1.9% |
| ROIC | 5.7% | 5.5% | 5.1% | 4.5% | 3.8% | -0.7% |
| ROE | 20.5% | 17.9% | 15.6% | 14.8% | 13.4% | -1.4% |
Revenue and profitability
The company's Revenue increased on 7.2% in 2015.
Net Income marign decreased slightly on 1.1 pp from 19.7% to 18.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.2% in 2015. The company showed CAPEX/Revenue growth of 3.6 pp from 3.6% in 2012 to 7.2% in 2015. For the last three years the average CAPEX/Revenue was 5.9%.
Return on investment
The company operates at good ROE (13.43%) while ROIC is low (3.81%). ROIC decreased slightly on 0.70 pp from 4.5% to 3.8% in 2015. ROE decreased slightly on 1.4 pp from 14.8% to 13.4% in 2015.
Leverage (Debt)
Debt jumped on 18.5% in 2015 while cash decreased slightly on 1.9% in 2015.
Appendix 1: Peers in Banks
Below we provide Bank of Communications Co Ltd benchmarking against other companies in Banks 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 |
|---|
| Chong Hing Bank Ltd ($1111) | | 10.0% | -1.2% | 121.1% | -17.4% |
| Shengjing Bank Co Ltd ($2066) | | 36.5% | 36.3% | 40.1% | 24.3% |
| China Merchants Bank Co Ltd ($3968) | 42.3% | 24.0% | 18.6% | 33.9% | |
| Harbin Bank Co Ltd ($6138) | | 58.3% | 12.1% | 29.2% | 10.5% |
| Dah Sing Financial Holdings Ltd ($440) | | 9.9% | -0.1% | 29.0% | -7.8% |
| |
|---|
| Median (22 companies) | 29.3% | 19.6% | 11.7% | 14.8% | 7.3% |
|---|
| Bank of Communications Co Ltd ($3328) | | 24.0% | 9.4% | 12.3% | 7.2% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 34.2% | 4.1% | 29.9% | 27.0% | 33.5% |
| |
|---|
| Median (1 company) | 34.2% | 4.1% | 29.9% | 27.0% | 33.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Minsheng Banking Corp Ltd ($1988) | 5.0% | 5.2% | 6.8% | 7.6% | |
| Harbin Bank Co Ltd ($6138) | 20.0% | 19.8% | 9.9% | 6.5% | 5.8% |
| Industrial & Commercial Bank of China Ltd ($1398) | 3.2% | 3.8% | 4.9% | 5.4% | |
| Shengjing Bank Co Ltd ($2066) | 3.3% | 1.6% | 2.2% | 5.0% | 3.0% |
| China CITIC Bank Corp Ltd ($998) | 1.7% | 2.3% | 2.9% | 4.8% | 2.5% |
| |
|---|
| Median (22 companies) | 3.3% | 3.2% | 3.7% | 3.1% | 2.5% |
|---|
| Bank of Communications Co Ltd ($3328) | 3.1% | 3.6% | 5.1% | 5.3% | 7.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chong Hing Bank Ltd ($1111) | 6.3% | 5.5% | 5.2% | 16.4% | 5.7% |
| KVB Kunlun Financial Group Ltd ($8077) | | 1.2% | 16.3% | 12.3% | |
| China Construction Bank Corp ($939) | 11.6% | 11.1% | 11.7% | 10.8% | |
| Industrial & Commercial Bank of China Ltd ($1398) | 10.6% | 9.9% | 10.2% | 9.9% | |
| Agricultural Bank of China Ltd ($1288) | 10.3% | 9.9% | 10.0% | 9.3% | |
| |
|---|
| Median (22 companies) | 6.4% | 6.0% | 6.4% | 5.5% | 4.3% |
|---|
| Bank of Communications Co Ltd ($3328) | 5.7% | 5.5% | 5.1% | 4.5% | 3.8% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -5.7x | -66.3x | -7.1x | -10.6x | -5.7x |
| |
|---|
| Median (1 company) | -5.7x | -66.3x | -7.1x | -10.6x | -5.7x |
|---|
