COSCO Pacific Ltd reports 30.4% Net Income growth and 5.1 pp EBITDA Margin growth from 51.1% to 56.2%
29/03/2016 • About COSCO Pacific Ltd (
$1199) • By InTwits
COSCO Pacific Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- COSCO Pacific Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 72.7%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 174 in 2015, 340 in 2014, 57.1 in 2013, 20.3 in 2012, 27.7 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.3%
- It operates with high leverage: Net Debt/EBITDA is 2.7x while industry average is -19.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
COSCO Pacific Ltd ($1199) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 599.2 | 735.5 | 798.6 | 870.1 | 798.2 | -8.3% |
| Gross Profit | 259.0 | 315.3 | 318.2 | 323.9 | 300.1 | -7.3% |
| SG&A | 89.3 | 91.9 | 90.1 | 93.2 | 77.0 | -17.4% |
| EBITDA | 315.3 | 394.6 | 423.9 | 444.7 | 448.8 | 0.9% |
| Net Income | 388.8 | 342.2 | 702.7 | 292.8 | 381.6 | 30.4% |
Balance Sheet
|
|---|
| Cash | 581.0 | 848.4 | 1,237.4 | 1,116.3 | 909.1 | -18.6% |
| Short Term Debt | 618.4 | 895.8 | 407.0 | 469.9 | 345.6 | -26.5% |
| Long Term Debt | 1,693.3 | 1,898.4 | 1,770.4 | 1,528.5 | 1,761.4 | 15.2% |
Cash flow
|
|---|
| Capex | 667.0 | 710.4 | 531.5 | 376.8 | 365.3 | -3.0% |
Ratios
|
|---|
| Revenue growth | 34.2% | 22.8% | 8.6% | 8.9% | -8.3% | |
| EBITDA growth | 39.2% | 25.2% | 7.4% | 4.9% | 0.9% | |
| Gross Margin | 43.2% | 42.9% | 39.8% | 37.2% | 37.6% | 0.4% |
| EBITDA Margin | 52.6% | 53.7% | 53.1% | 51.1% | 56.2% | 5.1% |
| Net Income Margin | 64.9% | 46.5% | 88.0% | 33.6% | 47.8% | 14.2% |
| SG&A, % of revenue | 14.9% | 12.5% | 11.3% | 10.7% | 9.7% | -1.1% |
| CAPEX, % of revenue | 111.3% | 96.6% | 66.6% | 43.3% | 45.8% | 2.5% |
| ROIC | 3.1% | 3.4% | 3.3% | 3.2% | 3.3% | 0.0% |
| ROE | 11.1% | 9.0% | 16.5% | 6.3% | 7.9% | 1.6% |
| Net Debt/EBITDA | 5.5x | 4.9x | 2.2x | 2.0x | 2.7x | 0.7x |
Revenue and profitability
COSCO Pacific Ltd's Revenue decreased on 8.3% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.1 pp from 51.1% to 56.2% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 10.7% to 9.7% in 2015.
Net Income marign surged on 14.2 pp from 33.6% to 47.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 COSCO Pacific Ltd had CAPEX/Revenue of 45.8%. CAPEX/Revenue dropped on 50.8 pp from 96.6% in 2012 to 45.8% in 2015. Average CAPEX/Revenue for the last three years was 51.9%.Battling declining revenue the company invested a large share of EBITDA (81.4%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (3.28%) and ROE (7.95%). ROIC showed almost no change in 2015. ROE increased slightly on 1.6 pp from 6.3% to 7.9% in 2015.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 4.7x Debt / EBITDA. Net Debt / EBITDA surged on 0.7x from 2.0x to 2.7x in 2015. Debt increased on 5.4% in 2015 while cash dropped on 18.6% in 2015.
Appendix 1: Peers in Commercial Services
Below you can find COSCO Pacific Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | | 99.1% | 14.9% | -88.3% | 271.8% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Celebrate International Holdings Ltd ($8212) | | -90.1% | 1,437.6% | -6.3% | 117.0% |
| Haier Healthwise Holdings Ltd ($348) | | -22.0% | -50.1% | -7.5% | 101.1% |
| CAR Inc ($699) | | 96.4% | 68.0% | 30.3% | 42.1% |
| |
|---|
| Median (53 companies) | 35.0% | 8.8% | 4.7% | 9.9% | 6.3% |
|---|
| COSCO Pacific Ltd ($1199) | | 22.8% | 8.6% | 8.9% | -8.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| U Banquet Group Holding Ltd ($8107) | | | | 76.5% | 74.5% |
| Anxian Yuan China Holdings Ltd ($922) | 58.4% | 74.0% | 54.7% | 39.8% | 70.8% |
| China Communication Telecom Services Co Ltd ($8206) | -56.6% | 61.6% | 58.6% | 69.1% | 70.2% |
| |
|---|
| Median (48 companies) | 32.9% | 31.0% | 29.2% | 30.9% | 31.2% |
|---|
| COSCO Pacific Ltd ($1199) | 43.2% | 42.9% | 39.8% | 37.2% | 37.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | 61.6% | 84.9% | 75.9% | 80.9% |
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | 73.6% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| CAR Inc ($699) | 31.6% | 43.6% | 30.1% | 43.1% | 67.4% |
| Jiangsu Expressway Co Ltd ($177) | 60.8% | 57.0% | 60.7% | 59.3% | 61.5% |
| |
|---|
| Median (53 companies) | 16.0% | 16.0% | 13.4% | 11.0% | 13.1% |
|---|
| COSCO Pacific Ltd ($1199) | 52.6% | 53.7% | 53.1% | 51.1% | 56.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 11.5% | 21.3% | 9.0% | 13.9% | 47.4% |
| Shenzhen International Holdings Ltd ($152) | 28.3% | 23.0% | 22.1% | 20.9% | 35.0% |
| Celebrate International Holdings Ltd ($8212) | 140.9% | 211.7% | 12.0% | 6.2% | 34.2% |
| China Maple Leaf Educational Systems Ltd ($1317) | 39.5% | 25.7% | 50.9% | 21.1% | 32.8% |
| Qingdao Port International Co Ltd ($6198) | 29.5% | 31.9% | 28.7% | 8.5% | 28.2% |
| |
|---|
| Median (53 companies) | 3.7% | 3.1% | 4.0% | 3.6% | 4.7% |
|---|
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | 45.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| 1010 Printing Group Ltd ($1127) | 14.4% | 13.5% | 20.8% | 17.8% | 19.9% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | 19.8% |
| CAR Inc ($699) | | 5.2% | 2.7% | 12.2% | 19.0% |
| eprint Group Ltd ($1884) | | 33.0% | 34.8% | 15.4% | 18.5% |
| |
|---|
| Median (53 companies) | 5.2% | 6.2% | 5.7% | 5.5% | 3.7% |
|---|
| COSCO Pacific Ltd ($1199) | 3.1% | 3.4% | 3.3% | 3.2% | 3.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | | 22.2x |
| Kai Yuan Holdings Ltd ($1215) | -15.6x | -143.8x | -0.7x | | 18.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | 6.2x |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | 4.1x |
| |
|---|
| Median (35 companies) | -0.1x | -0.1x | -0.8x | -0.5x | -0.5x |
|---|
| COSCO Pacific Ltd ($1199) | 5.5x | 4.9x | 2.2x | 2.0x | 2.7x |
