Yanzhou Coal Mining Co Ltd reports 124% CAPEX growth while 43.7% Revenue decline
29/03/2016 • About Yanzhou Coal Mining Co Ltd (
$1171) • By InTwits
Yanzhou Coal Mining Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Yanzhou Coal Mining Co Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.6%
- EBITDA Margin is quite volatile: 14.1% in 2015, 12.2% in 2014, 11.5% in 2013, 14.9% in 2012, 32.3% in 2011
- Yanzhou Coal Mining Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.6%. At the same time it's a lot of higher than industry average of 3.3%.
- CAPEX is quite volatile: 1,161 in FY2015, 1,939 in FY2014, 1,111 in FY2013, 839 in FY2012, 533 in FY2011
- The company has potentially unprofitable business model: ROIC is at 0.6%
- It operates with high leverage: Net Debt/EBITDA is 9.0x while industry average is 7.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Yanzhou Coal Mining Co Ltd ($1171) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 47,066 | 58,146 | 56,402 | 64,695 | 36,404 | -43.7% |
| Gross Profit | 18,786 | 12,626 | 10,688 | 11,928 | 6,154 | -48.4% |
| SG&A | 6,451 | 7,925 | 8,650 | 7,401 | 5,457 | -26.3% |
| EBITDA | 15,221 | 8,654 | 6,462 | 7,922 | 5,142 | -35.1% |
| Net Income | 8,928 | 6,066 | 777 | 2,200 | 511 | -76.8% |
Balance Sheet
|
|---|
| Cash | 17,689 | 15,904 | 15,364 | 20,701 | 23,170 | 11.9% |
| Short Term Debt | 19,588 | 7,713 | 11,275 | 9,145 | 23,903 | 161.4% |
| Long Term Debt | 14,869 | 33,284 | 44,100 | 50,256 | 45,577 | -9.3% |
Cash flow
|
|---|
| Capex | 10,265 | 6,230 | 10,221 | 5,496 | 12,310 | 124.0% |
Ratios
|
|---|
| Revenue growth | 38.7% | 23.5% | -3.0% | 14.7% | -43.7% | |
| EBITDA growth | 19.3% | -43.1% | -25.3% | 22.6% | -35.1% | |
| Gross Margin | 39.9% | 21.7% | 18.9% | 18.4% | 16.9% | -1.5% |
| EBITDA Margin | 32.3% | 14.9% | 11.5% | 12.2% | 14.1% | 1.9% |
| Net Income Margin | 19.0% | 10.4% | 1.4% | 3.4% | 1.4% | -2.0% |
| SG&A, % of revenue | 13.7% | 13.6% | 15.3% | 11.4% | 15.0% | 3.5% |
| CAPEX, % of revenue | 21.8% | 10.7% | 18.1% | 8.5% | 33.8% | 25.3% |
| ROIC | 16.8% | 5.3% | 2.0% | 3.7% | 0.6% | -3.1% |
| ROE | 22.3% | 13.8% | 1.8% | 5.5% | 0.4% | -5.1% |
| Net Debt/EBITDA | 1.1x | 2.9x | 6.2x | 4.9x | 9.0x | 4.1x |
Revenue and profitability
The company's Revenue dropped on 43.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 12.2% to 14.1% in 2015.
Gross Margin decreased slightly on 1.5 pp from 18.4% to 16.9% in 2015. SG&A as a % of Revenue increased on 3.5 pp from 11.4% to 15.0% in 2015.
Net Income marign decreased slightly on 2.0 pp from 3.4% to 1.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Yanzhou Coal Mining Co Ltd's CAPEX/Revenue was 33.8% in 2015. CAPEX/Revenue jumped on 23.1 pp from 10.7% in 2012 to 33.8% in 2015. It's average CAPEX/Revenue for the last three years was 20.1%.Battling declining revenue the company made large investments to CAPEX (239% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (0.60%) and ROE (0.44%). ROIC decreased on 3.1 pp from 3.7% to 0.60% in 2015. ROE decreased on 5.1 pp from 5.5% to 0.44% in 2015.
Leverage (Debt)
Debt level is 9.0x Net Debt / EBITDA and 13.5x Debt / EBITDA. Net Debt / EBITDA jumped on 4.1x from 4.9x to 9.0x in 2015. Debt jumped on 17.0% in 2015 while cash surged on 11.9% in 2015.
Appendix 1: Peers in Coal
Below we provide Yanzhou Coal Mining Co Ltd benchmarking against other companies in Coal 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 |
|---|
| Kinetic Mines and Energy Ltd ($1277) | | | 299.9% | 563.4% | 40.0% |
| Feishang Anthracite Resources Ltd ($1738) | | 34.9% | 25.8% | 103.6% | -34.0% |
| Loudong General Nice Resources China Holdings Ltd ($988) | 8.5% | -12.7% | 39.1% | 87.6% | |
| Rosan Resources Holdings Ltd ($578) | -19.9% | -74.1% | 71.1% | 49.1% | |
| Asia Coal Ltd ($835) | | 32.1% | -15.3% | 43.2% | 133.6% |
| |
|---|
| Median (22 companies) | 5.2% | -6.5% | -8.6% | -12.5% | -16.1% |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | | 23.5% | -3.0% | 14.7% | -43.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Coal Ltd ($835) | 32.4% | 56.7% | 62.6% | 76.7% | 5.8% |
| Shougang Fushan Resources Group Ltd ($639) | 70.4% | 63.5% | 50.9% | 40.1% | 24.5% |
| Agritrade Resources Ltd ($1131) | 7.6% | 22.9% | 29.4% | 31.8% | 30.0% |
| Kinetic Mines and Energy Ltd ($1277) | | 20.6% | 28.8% | 30.3% | 10.9% |
| China Shenhua Energy Co Ltd ($1088) | 39.9% | 31.4% | 28.7% | 29.6% | 35.5% |
| |
|---|
| Median (22 companies) | 30.0% | 19.9% | 17.3% | 9.4% | 5.8% |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | 39.9% | 21.7% | 18.9% | 18.4% | 16.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 41.2% | 35.6% | 31.6% | 34.2% | 33.9% |
| Agritrade Resources Ltd ($1131) | 1.4% | 41.6% | 37.3% | 33.4% | 31.1% |
| Kinetic Mines and Energy Ltd ($1277) | | -277.0% | -51.9% | 29.3% | 15.8% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 40.9% | 33.1% | 30.7% | 22.8% | |
| Feishang Anthracite Resources Ltd ($1738) | -9.2% | -13.1% | -32.9% | 19.0% | 15.9% |
| |
|---|
| Median (23 companies) | 11.1% | -1.1% | -4.3% | -8.6% | -18.0% |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | 32.3% | 14.9% | 11.5% | 12.2% | 14.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Up Energy Development Group Ltd ($307) | | | | 279.5% | 75.2% |
| Siberian Mining Group Co Ltd ($1142) | 129.1% | 4.6% | 78.8% | 217.3% | 279.7% |
| King Stone Energy Group Ltd ($663) | 82.7% | 58.5% | 135.3% | 205.7% | |
| Asia Coal Ltd ($835) | 121.4% | 12.5% | 25.8% | 111.0% | 0.3% |
| Hidili Industry International Development Ltd ($1393) | 74.1% | 82.3% | 144.6% | 92.3% | |
| |
|---|
| Median (23 companies) | 22.1% | 18.2% | 26.0% | 20.5% | 18.4% |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | 21.8% | 10.7% | 18.1% | 8.5% | 33.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 21.0% | 19.5% | 17.4% | 14.6% | 7.7% |
| Loudong General Nice Resources China Holdings Ltd ($988) | 11.5% | 4.1% | 8.2% | 9.6% | |
| Kinetic Mines and Energy Ltd ($1277) | -2.6% | -6.6% | -5.7% | 8.5% | 3.2% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 37.6% | 28.5% | 15.2% | 8.5% | |
| Agritrade Resources Ltd ($1131) | -2.3% | 2.7% | 5.8% | 6.4% | 6.9% |
| |
|---|
| Median (23 companies) | 0.6% | -2.6% | -2.1% | -5.2% | -3.9% |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | 16.8% | 5.3% | 2.0% | 3.7% | 0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Feishang Anthracite Resources Ltd ($1738) | | | | 24.3x | 32.6x |
| China Coal Energy Co Ltd ($1898) | 0.5x | 1.9x | 4.9x | 9.7x | 14.4x |
| Kinetic Mines and Energy Ltd ($1277) | | | | 4.5x | 5.9x |
| Capital Finance Holdings Ltd ($8239) | | | | | 3.6x |
| China Shenhua Energy Co Ltd ($1088) | -0.0x | 0.2x | 0.6x | 0.7x | 1.1x |
| |
|---|
| Median (7 companies) | 1.4x | 1.9x | 3.1x | 4.0x | 3.6x |
|---|
| Yanzhou Coal Mining Co Ltd ($1171) | 1.1x | 2.9x | 6.2x | 4.9x | 9.0x |
