Metallurgical Corp of China Ltd Net Debt / EBITDA surged on 2.5x from 6.5x to 9.0x in 2015 and Revenue increased slightly on 0.79%
29/03/2016 • About Metallurgical Corp of China Ltd (
$1618) • By InTwits
Metallurgical Corp of China Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Metallurgical Corp of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 1.0%.
- CAPEX is quite volatile: 3,357 in 2015, 2,760 in 2014, 2,902 in 2013, 5,334 in 2012, 9,510 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.6%
- It operates with high leverage: Net Debt/EBITDA is 9.0x while industry average is 4.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Metallurgical Corp of China Ltd ($1618) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 222,113 | 216,242 | 202,241 | 210,073 | 211,727 | 0.8% |
| Gross Profit | 21,616 | 16,040 | 21,068 | 22,189 | 22,909 | 3.2% |
| SG&A | 12,868 | 12,766 | 12,887 | 7,608 | 7,903 | 3.9% |
| EBITDA | 13,621 | 7,575 | 12,773 | 11,551 | 9,734 | -15.7% |
| Net Income | 4,243 | -6,943 | 2,981 | 3,965 | 4,802 | 21.1% |
Balance Sheet
|
|---|
| Cash | 42,721 | 32,084 | 31,243 | 28,571 | 28,736 | 0.6% |
| Short Term Debt | 84,676 | 74,437 | 74,343 | 60,235 | 86,019 | 42.8% |
| Long Term Debt | 52,485 | 57,065 | 42,224 | 43,669 | 30,760 | -29.6% |
Cash flow
|
|---|
| Capex | 9,510 | 5,334 | 2,902 | 2,760 | 3,357 | 21.6% |
Ratios
|
|---|
| Revenue growth | 7.6% | -2.6% | -6.5% | 3.9% | 0.8% | |
| EBITDA growth | 7.8% | -44.4% | 68.6% | -9.6% | -15.7% | |
| Gross Margin | 9.7% | 7.4% | 10.4% | 10.6% | 10.8% | 0.3% |
| EBITDA Margin | 6.1% | 3.5% | 6.3% | 5.5% | 4.6% | -0.9% |
| Net Income Margin | 1.9% | -3.2% | 1.5% | 1.9% | 2.3% | 0.4% |
| SG&A, % of revenue | 5.8% | 5.9% | 6.4% | 3.6% | 3.7% | 0.1% |
| CAPEX, % of revenue | 4.3% | 2.5% | 1.4% | 1.3% | 1.6% | 0.3% |
| ROIC | 6.2% | 2.5% | 5.5% | 4.8% | 3.6% | -1.2% |
| ROE | 9.1% | -15.5% | 7.0% | 8.6% | 8.9% | 0.3% |
| Net Debt/EBITDA | 6.9x | 13.1x | 6.7x | 6.5x | 9.0x | 2.5x |
Revenue and profitability
The company's Revenue increased slightly on 0.79% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.90 pp from 5.5% to 4.6% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue showed almost no change 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 1.6%. Metallurgical Corp of China Ltd's CAPEX/Revenue decreased slightly on 0.88 pp from 2.5% in 2012 to 1.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (3.59%) and ROE (8.90%). ROIC decreased slightly on 1.2 pp from 4.8% to 3.6% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 9.0x Net Debt / EBITDA and 12.0x Debt / EBITDA. Net Debt / EBITDA jumped on 2.5x from 6.5x to 9.0x in 2015. Debt jumped on 12.4% in 2015 while cash increased slightly on 0.58% in 2015.
Appendix 1: Peers in Engineering&Construction
Below we provide Metallurgical Corp of China Ltd benchmarking against other companies in Engineering&Construction 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 |
|---|
| CNQC International Holdings Ltd ($1240) | | 21.6% | 91.0% | 103.7% | 807.4% |
| China National Culture Group Ltd ($745) | | -39.1% | -76.8% | -55.8% | 592.3% |
| Vision Fame International Holding Ltd ($1315) | | -9.9% | 45.9% | -10.5% | 105.6% |
| Sino Credit Holdings Ltd ($628) | | -13.8% | | | 97.4% |
| Grand Ming Group Holdings Ltd ($1271) | | 131.0% | -26.9% | -37.4% | 74.8% |
| |
|---|
| Median (38 companies) | 15.7% | 11.5% | 21.8% | 16.8% | 10.7% |
|---|
| Metallurgical Corp of China Ltd ($1618) | | -2.6% | -6.5% | 3.9% | 0.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | 61.1% |
| Broad Greenstate International Co Ltd ($1253) | 16.7% | 20.1% | 28.7% | 35.8% | 36.7% |
| China National Culture Group Ltd ($745) | -46.6% | 0.9% | 12.1% | 10.3% | 32.3% |
| Kingbo Strike Ltd ($1421) | 22.9% | 32.4% | 44.4% | 40.3% | 30.7% |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% |
| |
|---|
| Median (33 companies) | 13.1% | 13.5% | 15.1% | 14.5% | 15.6% |
|---|
| Metallurgical Corp of China Ltd ($1618) | 9.7% | 7.4% | 10.4% | 10.6% | 10.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | 61.7% |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | 60.9% |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | 51.6% |
| China National Culture Group Ltd ($745) | -70.3% | -30.4% | -72.7% | -279.2% | 45.3% |
| Chevalier International Holdings Ltd ($25) | 6.7% | 10.4% | 11.9% | 12.8% | 37.5% |
| |
|---|
| Median (38 companies) | 9.3% | 9.8% | 8.8% | 8.1% | 8.3% |
|---|
| Metallurgical Corp of China Ltd ($1618) | 6.1% | 3.5% | 6.3% | 5.5% | 4.6% |
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% | 155.4% |
| Grand Ming Group Holdings Ltd ($1271) | 10.6% | 0.0% | 16.1% | 8.7% | 33.8% |
| Beijing Capital International Airport Co Ltd ($694) | 5.3% | 3.5% | 6.6% | 7.2% | 28.2% |
| Louis XIII Holdings Ltd ($577) | 2.3% | 1.2% | 29.5% | 9.3% | 16.1% |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| |
|---|
| Median (38 companies) | 4.1% | 2.3% | 2.5% | 1.7% | 2.2% |
|---|
| Metallurgical Corp of China Ltd ($1618) | 4.3% | 2.5% | 1.4% | 1.3% | 1.6% |
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 (40 companies) | 7.0% | 6.5% | 5.9% | 4.4% | 3.1% |
|---|
| Metallurgical Corp of China Ltd ($1618) | 6.2% | 2.5% | 5.5% | 4.8% | 3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | 41.7x |
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Louis XIII Holdings Ltd ($577) | -1.6x | 0.8x | -12.5x | -23.2x | 19.1x |
| |
|---|
| Median (33 companies) | 0.5x | 1.0x | 0.9x | 1.5x | 2.2x |
|---|
| Metallurgical Corp of China Ltd ($1618) | 6.9x | 13.1x | 6.7x | 6.5x | 9.0x |
