First Tractor Co Ltd reports 84.7% EBITDA growth and 2.4 pp EBITDA Margin growth from 3.3% to 5.7%
29/03/2016 • About First Tractor Co Ltd (
$38) • By InTwits
First Tractor Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- First Tractor Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's in pair with industry average of 4.7%.
- CAPEX is quite volatile: 12,107 in FY2015, 3,332 in FY2014, 3,083 in FY2013, 2,327 in FY2012, 1,849 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 6.3x while industry average is -2.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
First Tractor Co Ltd ($38) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,703 | 11,508 | 11,029 | 8,999 | 9,622 | 6.9% |
| Gross Profit | 1,660 | 1,552 | 1,784 | 1,542 | 1,760 | 14.2% |
| SG&A | 1,077 | 1,121 | 1,298 | 1,367 | 1,380 | 0.9% |
| EBITDA | 747 | 699 | 610 | 294 | 544 | 84.7% |
| Net Income | 440 | 325 | 227 | 168 | 135 | -19.3% |
Balance Sheet
|
|---|
| Cash | 1,395 | 1,771 | 1,883 | 1,998 | 1,898 | -5.0% |
| Short Term Debt | 2,028 | 1,498 | 1,813 | 3,167 | 3,798 | 19.9% |
| Long Term Debt | 186 | 618 | 1,574 | 1,539 | 1,521 | -1.1% |
Cash flow
|
|---|
| Capex | 732 | 560 | 475 | 657 | 411 | -37.5% |
Ratios
|
|---|
| Revenue growth | 14.0% | -1.7% | -4.2% | -18.4% | 6.9% | |
| EBITDA growth | 10.5% | -6.5% | -12.6% | -51.8% | 84.7% | |
| Gross Margin | 14.2% | 13.5% | 16.2% | 17.1% | 18.3% | 1.2% |
| EBITDA Margin | 6.4% | 6.1% | 5.5% | 3.3% | 5.7% | 2.4% |
| Net Income Margin | 3.8% | 2.8% | 2.1% | 1.9% | 1.4% | -0.5% |
| SG&A, % of revenue | 9.2% | 9.7% | 11.8% | 15.2% | 14.3% | -0.9% |
| CAPEX, % of revenue | 6.3% | 4.9% | 4.3% | 7.3% | 4.3% | -3.0% |
| ROIC | 10.5% | 7.1% | 4.3% | -0.1% | 2.2% | 2.3% |
| ROE | 13.4% | 8.3% | 5.1% | 3.7% | 2.9% | -0.8% |
| Net Debt/EBITDA | 1.1x | 0.5x | 2.5x | 9.2x | 6.3x | -2.9x |
Revenue and profitability
First Tractor Co Ltd's Revenue increased on 6.9% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 15.1 pp from 47.1% to 62.1% in FY2015.
Gross Margin increased slightly on 1.2 pp from 17.1% to 18.3% in 2015. SG&A as a % of Revenue decreased slightly on 0.85 pp from 15.2% to 14.3% 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 4.3%. First Tractor Co Ltd's CAPEX/Revenue decreased slightly on 0.59 pp from 4.9% in 2012 to 4.3% in 2015. For the last three years the average CAPEX/Revenue was 5.3%.The company invested a large share of EBITDA (75.5%) to CAPEX.
Return on investment
The company operates at low ROIC (2.20%) and ROE (2.92%). ROIC increased on 2.3 pp from -0.13% to 2.2% in 2015. ROE decreased slightly on 0.77 pp from 3.7% to 2.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.3x and Debt / EBITDA is 9.8x. Net Debt / EBITDA dropped on 2.9x from 9.2x to 6.3x in 2015. Debt surged on 13.0% in 2015 while cash decreased on 5.0% in 2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find First Tractor Co Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Sun East Technology Holdings Ltd ($365) | | -25.1% | -10.7% | 39.3% | 6.4% |
| Shanghai Prime Machinery Co Ltd ($2345) | | 2.6% | -8.9% | 37.3% | 52.8% |
| Sinoref Holdings Ltd ($1020) | 1.5% | -0.2% | -42.2% | 29.2% | |
| North Asia Strategic Holdings Ltd ($8080) | | -52.2% | -29.1% | 23.7% | 42.6% |
| Huazhang Technology Holding Ltd ($1673) | | 131.6% | 9.5% | 22.9% | 23.5% |
| |
|---|
| Median (23 companies) | 12.6% | -6.8% | -2.4% | 1.1% | -0.9% |
|---|
| First Tractor Co Ltd ($38) | | -1.7% | -4.2% | -18.4% | 6.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 38.3% | 49.1% | 51.7% | 54.9% | 65.5% |
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 45.5% | 59.7% | 58.3% | 48.6% | 26.7% |
| Renheng Enterprise Holdings Ltd ($3628) | 36.4% | 44.3% | 44.8% | 45.4% | |
| Haitian International Holdings Ltd ($1882) | 29.7% | 30.1% | 31.6% | 32.4% | 33.0% |
| CHTC Fong's Industries Co Ltd ($641) | 26.5% | 24.4% | 30.0% | 32.3% | 31.2% |
| |
|---|
| Median (23 companies) | 24.2% | 24.4% | 22.6% | 20.0% | 22.9% |
|---|
| First Tractor Co Ltd ($38) | 14.2% | 13.5% | 16.2% | 17.1% | 18.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 31.1% | 46.8% | 48.7% | 46.6% | -134.1% |
| Jingwei Textile Machinery ($350) | 18.5% | 24.0% | 26.9% | 28.0% | 28.5% |
| Haitian International Holdings Ltd ($1882) | 20.5% | 19.7% | 20.7% | 21.9% | 22.8% |
| Renheng Enterprise Holdings Ltd ($3628) | 22.9% | 24.7% | 23.9% | 20.7% | |
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | |
| |
|---|
| Median (23 companies) | 9.7% | 10.9% | 8.7% | 8.7% | 5.9% |
|---|
| First Tractor Co Ltd ($38) | 6.4% | 6.1% | 5.5% | 3.3% | 5.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China High Precision Automation Group Ltd ($591) | 33.0% | 20.5% | 9.1% | 18.4% | 0.6% |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 14.9% | 20.5% | 20.3% | 11.6% | |
| LK Technology Holdings Ltd ($558) | 7.6% | 9.3% | 10.2% | 9.1% | 5.6% |
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 1.3% | 2.3% | 10.1% | 7.8% | 31.9% |
| Greens Holdings Ltd ($1318) | 9.3% | 8.9% | 3.1% | 7.1% | |
| |
|---|
| Median (23 companies) | 5.3% | 4.2% | 3.6% | 4.2% | 2.3% |
|---|
| First Tractor Co Ltd ($38) | 6.3% | 4.9% | 4.3% | 7.3% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | | 52.8% | 28.7% | 20.8% | -14.5% |
| Haitian International Holdings Ltd ($1882) | 26.8% | 19.8% | 21.2% | 19.4% | 16.3% |
| Jingwei Textile Machinery ($350) | 23.3% | 19.4% | 20.9% | 17.4% | 14.9% |
| Huazhang Technology Holding Ltd ($1673) | | 29.6% | 16.2% | 16.3% | 16.2% |
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | |
| |
|---|
| Median (23 companies) | 9.8% | 7.9% | 4.0% | 3.0% | 2.9% |
|---|
| First Tractor Co Ltd ($38) | 10.5% | 7.1% | 4.3% | -0.1% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | -0.0x | -0.6x | 0.3x | 6.0x | 3.2x |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.9x | 3.0x | 11.4x | 5.6x | |
| Honghua Group Ltd ($196) | 0.1x | 1.2x | 3.2x | 5.2x | |
| LK Technology Holdings Ltd ($558) | 0.9x | 2.5x | 5.1x | 4.9x | 4.6x |
| CHTC Fong's Industries Co Ltd ($641) | 3.4x | | 2.2x | 2.5x | 3.5x |
| |
|---|
| Median (19 companies) | -0.5x | -1.1x | -1.0x | -0.6x | -0.4x |
|---|
| First Tractor Co Ltd ($38) | 1.1x | 0.5x | 2.5x | 9.2x | 6.3x |
