Zhengye International Holdings Co Ltd EBITDA surged on 37.8% in 2015 and Revenue increased on 5.5%
29/03/2016 • About Zhengye International Holdings Co Ltd (
$3363) • By InTwits
Zhengye International Holdings Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zhengye International Holdings Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.0%. At the same time it's in pair with industry average of 4.7%.
- CAPEX is quite volatile: 132 in 2015, 184 in 2014, 51.0 in 2013, 39.6 in 2012, 27.9 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.8%
- It operates with high leverage: Net Debt/EBITDA is 5.5x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhengye International Holdings Co Ltd ($3363) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,164 | 1,242 | 1,446 | 1,714 | 1,808 | 5.5% |
| Gross Profit | 215 | 259 | 272 | 292 | 344 | 17.8% |
| SG&A | 97 | 135 | 161 | 180 | 185 | 2.5% |
| EBITDA | 120 | 127 | 130 | 152 | 209 | 37.8% |
| Net Income | 46 | 51 | 35 | 39 | 41 | 4.2% |
Balance Sheet
|
|---|
| Cash | 131 | 122 | 128 | 42 | 59 | 43.0% |
| Short Term Debt | 578 | 865 | 926 | 992 | 997 | 0.5% |
| Long Term Debt | 38 | 49 | 32 | 236 | 206 | -12.7% |
Cash flow
|
|---|
| Capex | 81 | 136 | 74 | 110 | 98 | -10.8% |
Ratios
|
|---|
| Revenue growth | 10.5% | 6.8% | 16.4% | 18.6% | 5.5% | |
| EBITDA growth | -7.1% | 5.9% | 2.5% | 16.5% | 37.8% | |
| Gross Margin | 18.5% | 20.9% | 18.8% | 17.0% | 19.0% | 2.0% |
| EBITDA Margin | 10.3% | 10.2% | 9.0% | 8.9% | 11.6% | 2.7% |
| Net Income Margin | 4.0% | 4.1% | 2.4% | 2.3% | 2.3% | -0.0% |
| SG&A, % of revenue | 8.3% | 10.9% | 11.1% | 10.5% | 10.2% | -0.3% |
| CAPEX, % of revenue | 7.0% | 11.0% | 5.1% | 6.4% | 5.4% | -1.0% |
| ROIC | 10.0% | 7.7% | 6.2% | 5.4% | 6.8% | 1.4% |
| ROE | 12.2% | 10.6% | 6.9% | 7.4% | 7.2% | -0.2% |
| Net Debt/EBITDA | 4.0x | 6.2x | 6.4x | 7.8x | 5.5x | -2.3x |
Revenue and profitability
The company's Revenue increased on 5.5% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.7 pp from 8.9% to 11.6% in 2015.
Gross Margin increased slightly on 2.0 pp from 17.0% to 19.0% 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 5.4%. Zhengye International Holdings Co Ltd showed decline in CAPEX/Revenue of 5.6 pp from 11.0% in 2012 to 5.4% in 2015. It's average level of CAPEX/Revenue for the last three years was 5.7%.
Return on investment
The company operates at low ROIC (6.79%) and ROE (7.24%). ROIC increased slightly on 1.4 pp from 5.4% to 6.8% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 5.5x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA dropped on 2.3x from 7.8x to 5.5x in 2015. Debt decreased on 2.1% in 2015 while cash jumped on 43.0% in 2015.
Appendix 1: Peers in Packaging&Containers
Below we provide Zhengye International Holdings Co Ltd benchmarking against other companies in Packaging&Containers 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 |
|---|
| Overseas Chinese Town Asia Holdings Ltd ($3366) | | 34.9% | 17.5% | -6.5% | 69.5% |
| Hao Tian Development Group Ltd ($474) | | 14.8% | | | 51.0% |
| Jin Cai Holdings Co Ltd ($1250) | | 2.1% | -6.3% | -3.1% | 40.8% |
| Huaxi Holdings Co Ltd ($1689) | | 25.3% | 5.0% | -5.1% | 12.5% |
| Huajun Holdings Ltd ($377) | | 11.2% | 3.3% | 3.4% | 10.4% |
| |
|---|
| Median (16 companies) | 19.6% | 3.6% | 5.0% | 0.7% | 3.0% |
|---|
| Zhengye International Holdings Co Ltd ($3363) | | 6.8% | 16.4% | 18.6% | 5.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 39.6% | 36.6% | 39.1% | 37.7% | 44.7% |
| Huaxi Holdings Co Ltd ($1689) | 13.1% | 19.0% | 28.2% | 40.9% | 37.5% |
| China For You Group Co Ltd ($572) | 18.7% | 12.4% | | 34.6% | 31.9% |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 30.2% | 34.3% | 36.5% | 32.8% | 31.4% |
| Greatview Aseptic Packaging Co Ltd ($468) | 30.2% | 31.6% | 26.8% | 24.4% | 27.8% |
| |
|---|
| Median (15 companies) | 18.7% | 19.0% | 20.7% | 23.4% | 21.4% |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 18.5% | 20.9% | 18.8% | 17.0% | 19.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaxi Holdings Co Ltd ($1689) | 7.8% | 14.5% | 21.2% | 27.1% | 29.1% |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 25.5% | 27.9% | 30.7% | 27.4% | 26.3% |
| Greatview Aseptic Packaging Co Ltd ($468) | 24.1% | 25.9% | 23.1% | 21.6% | 23.4% |
| Lee & Man Paper Manufacturing Ltd ($2314) | 19.3% | 14.6% | 17.2% | 18.7% | 21.6% |
| Jin Cai Holdings Co Ltd ($1250) | 35.7% | 33.2% | 26.1% | 27.6% | 19.8% |
| |
|---|
| Median (16 companies) | 12.1% | 14.5% | 15.6% | 13.2% | 8.5% |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 10.3% | 10.2% | 9.0% | 8.9% | 11.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jin Cai Holdings Co Ltd ($1250) | 0.0% | 0.0% | 0.0% | 3.0% | 122.3% |
| Hao Tian Development Group Ltd ($474) | 88.2% | 81.6% | | 13.0% | 25.4% |
| Lee & Man Paper Manufacturing Ltd ($2314) | 13.5% | 19.7% | 13.7% | 13.1% | 17.1% |
| CPMC Holdings Ltd ($906) | 13.7% | 16.7% | 19.7% | 8.6% | 9.2% |
| Huajun Holdings Ltd ($377) | 5.6% | 18.4% | 4.0% | 4.1% | 7.2% |
| |
|---|
| Median (16 companies) | 5.6% | 5.2% | 4.4% | 4.1% | 5.5% |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 7.0% | 11.0% | 5.1% | 6.4% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huaxi Holdings Co Ltd ($1689) | | 21.4% | 28.5% | 26.2% | 23.6% |
| Greatview Aseptic Packaging Co Ltd ($468) | 19.6% | 20.2% | 18.9% | 15.7% | 17.7% |
| Lee & Man Paper Manufacturing Ltd ($2314) | 11.3% | 7.2% | 8.7% | 8.0% | 9.2% |
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 13.3% | 8.1% | 6.4% | 4.9% | 8.0% |
| CPMC Holdings Ltd ($906) | 8.9% | 8.3% | 8.7% | 7.3% | 6.0% |
| |
|---|
| Median (16 companies) | 11.3% | 8.1% | 7.0% | 7.3% | 3.9% |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 10.0% | 7.7% | 6.2% | 5.4% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Overseas Chinese Town Asia Holdings Ltd ($3366) | 0.7x | 9.4x | 6.7x | 7.4x | 4.4x |
| Sino Haijing Holdings Ltd ($1106) | 4.7x | 6.4x | 6.1x | 6.2x | 10.1x |
| Come Sure Group Holdings Ltd ($794) | -1.1x | 3.6x | 4.1x | 3.8x | 3.4x |
| Lee & Man Paper Manufacturing Ltd ($2314) | 2.5x | 4.1x | 3.5x | 3.4x | 3.0x |
| Kith Holdings Ltd ($1201) | 2.9x | 3.0x | 3.2x | 2.9x | |
| |
|---|
| Median (18 companies) | 0.6x | 1.0x | 0.6x | 0.5x | 2.4x |
|---|
| Zhengye International Holdings Co Ltd ($3363) | 4.0x | 6.2x | 6.4x | 7.8x | 5.5x |
