Angang Steel Co Ltd Net Debt / EBITDA surged on 24.8x from 4.3x to 29.1x in 2015 while Revenue dropped on 28.8%
30/03/2016 • About Angang Steel Co Ltd (
$347) • By InTwits
Angang Steel Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Angang Steel Co Ltd is a company in decline: 2015 revenue growth was -28.8%, 5 years revenue CAGR was -10.6%
- EBITDA Margin is quite volatile: 1.9% in 2015, 8.3% in 2014, 7.4% in 2013, 2.2% in 2012, 5.3% in 2011
- Angang Steel Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: 1,569 in 2015, 1,715 in 2014, 3,443 in 2013, 5,292 in 2012, 7,548 in 2011
- The company has unprofitable business model: ROIC is at -3.9%
- It operates with high leverage: Net Debt/EBITDA is 29.1x while industry average is 6.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Angang Steel Co Ltd ($347) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 90,207 | 78,032 | 75,135 | 73,833 | 52,535 | -28.8% |
| Gross Profit | 880 | 2,140 | 8,206 | 8,343 | 3,066 | -63.3% |
| SG&A | 1,757 | 4,154 | 4,777 | 3,756 | 3,826 | 1.9% |
| EBITDA | 4,819 | 1,743 | 5,578 | 6,148 | 1,007 | -83.6% |
| Net Income | -2,163 | -4,025 | 770 | 928 | -4,593 | -594.9% |
Balance Sheet
|
|---|
| Cash | 2,341 | 3,123 | 1,126 | 1,712 | 3,601 | 110.3% |
| Short Term Debt | 20,831 | 31,974 | 16,559 | 22,729 | 31,897 | 40.3% |
| Long Term Debt | 13,135 | 8,364 | 7,015 | 5,354 | 962 | -82.0% |
Cash flow
|
|---|
| Capex | 5,495 | 2,993 | 2,948 | 4,416 | 3,807 | -13.8% |
Ratios
|
|---|
| Revenue growth | -2.2% | -13.5% | -3.7% | -1.7% | -28.8% | |
| EBITDA growth | -53.6% | -63.8% | 220.0% | 10.2% | -83.6% | |
| Gross Margin | 1.0% | 2.7% | 10.9% | 11.3% | 5.8% | -5.5% |
| EBITDA Margin | 5.3% | 2.2% | 7.4% | 8.3% | 1.9% | -6.4% |
| Net Income Margin | -2.4% | -5.2% | 1.0% | 1.3% | -8.7% | -10.0% |
| SG&A, % of revenue | 1.9% | 5.3% | 6.4% | 5.1% | 7.3% | 2.2% |
| CAPEX, % of revenue | 6.1% | 3.8% | 3.9% | 6.0% | 7.2% | 1.3% |
| ROIC | -2.6% | -4.7% | 1.7% | 3.1% | -3.9% | -7.0% |
| ROE | -4.1% | -8.2% | 1.6% | 2.0% | -10.1% | -12.0% |
| Net Debt/EBITDA | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x | 24.8x |
Revenue and profitability
Angang Steel Co Ltd's Revenue dropped on 28.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.4 pp from 8.3% to 1.9% in 2015.
Gross Margin decreased on 5.5 pp from 11.3% to 5.8% in 2015. SG&A as a % of Revenue increased on 2.2 pp from 5.1% to 7.3% in 2015.
Net Income marign decreased on 10.0 pp from 1.3% to -8.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.2% in 2015. Angang Steel Co Ltd showed CAPEX/Revenue growth of 3.4 pp from 3.8% in 2012 to 7.2% in 2015. For the last three years the average CAPEX/Revenue was 5.7%.The company has spent a lot to CAPEX (378% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-3.91%) and ROE (-10.09%). ROIC decreased on 7.0 pp from 3.1% to -3.9% in 2015. ROE dropped on 12.0 pp from 2.0% to -10.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 29.1x and Debt / EBITDA is 32.6x. Net Debt / EBITDA surged on 24.8x from 4.3x to 29.1x in 2015. Debt surged on 17.0% in 2015 while cash surged on 110% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Angang Steel Co Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| CAA Resources Ltd ($2112) | | 99.6% | 103.2% | 38.0% | 261.2% |
| Newton Resources Ltd ($1231) | | | | -41.6% | 170.9% |
| Fosun International Ltd ($656) | | -8.9% | -1.4% | 21.0% | 27.6% |
| Wanguo International Mining Group Ltd ($3939) | | -1.0% | -11.0% | -16.2% | 0.7% |
| Da Ming International Holdings Ltd ($1090) | | -2.1% | 29.3% | 29.8% | -8.1% |
| |
|---|
| Median (16 companies) | 41.1% | -7.7% | 0.6% | -6.0% | -13.5% |
|---|
| Angang Steel Co Ltd ($347) | | -13.5% | -3.7% | -1.7% | -28.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 63.3% | | -223.7% | 15.7% | 37.5% |
| Wanguo International Mining Group Ltd ($3939) | 51.1% | 47.4% | 50.7% | 39.6% | 29.2% |
| China Metal International Holdings Inc ($319) | 21.0% | 20.9% | 24.3% | 24.8% | 25.5% |
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | 23.8% |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | 22.4% |
| |
|---|
| Median (16 companies) | 21.0% | 17.8% | 20.3% | 12.9% | 16.3% |
|---|
| Angang Steel Co Ltd ($347) | 1.0% | 2.7% | 10.9% | 11.3% | 5.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 46.5% | 39.7% | 36.2% | 31.3% | 26.7% |
| Fosun International Ltd ($656) | 15.8% | 16.7% | 23.0% | 20.9% | 22.2% |
| China Metal International Holdings Inc ($319) | 17.8% | 19.7% | 21.3% | 21.0% | 22.0% |
| Xingda International Holdings Ltd ($1899) | 21.6% | 17.3% | 22.2% | 19.1% | 13.6% |
| Tiangong International Co Ltd ($826) | 22.5% | 25.1% | 25.8% | 19.3% | 11.6% |
| |
|---|
| Median (16 companies) | 15.7% | 16.4% | 21.3% | 7.1% | 0.7% |
|---|
| Angang Steel Co Ltd ($347) | 5.3% | 2.2% | 7.4% | 8.3% | 1.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 690.4% | | 926.9% | 1,395.7% | 197.0% |
| Vale SA ($6210) | 25.8% | 34.0% | 28.1% | 29.8% | 34.5% |
| China Hanking Holdings Ltd ($3788) | 24.5% | 38.0% | 35.7% | 20.2% | 30.5% |
| Pan Asia Mining Ltd ($8173) | 0.4% | 1.5% | 0.4% | 2.4% | 24.4% |
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | 14.2% | 8.9% | 10.5% | 20.4% | 24.1% |
| |
|---|
| Median (16 companies) | 10.8% | 9.0% | 10.9% | 8.1% | 9.4% |
|---|
| Angang Steel Co Ltd ($347) | 6.1% | 3.8% | 3.9% | 6.0% | 7.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Metal International Holdings Inc ($319) | 11.5% | 11.0% | 12.0% | 12.7% | 11.4% |
| Wanguo International Mining Group Ltd ($3939) | 74.9% | 38.4% | 24.4% | 15.0% | 11.1% |
| Golik Holdings Ltd ($1118) | 9.0% | 7.0% | 7.4% | 10.0% | 10.8% |
| CAA Resources Ltd ($2112) | 33.0% | 69.2% | 33.5% | 2.2% | 6.9% |
| Fosun International Ltd ($656) | 6.7% | 6.1% | 7.9% | 6.8% | 6.9% |
| |
|---|
| Median (16 companies) | 11.5% | 6.7% | 7.9% | 5.0% | -4.2% |
|---|
| Angang Steel Co Ltd ($347) | -2.6% | -4.7% | 1.7% | 3.1% | -3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fosun International Ltd ($656) | 4.6x | 4.4x | 4.8x | 5.5x | 4.4x |
| Maanshan Iron & Steel Co Ltd ($323) | 5.0x | 55.2x | 7.3x | 5.3x | |
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | 27.3x |
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | |
| Da Ming International Holdings Ltd ($1090) | 8.0x | 8.4x | 8.5x | 4.0x | |
| |
|---|
| Median (13 companies) | 1.3x | 2.1x | 2.5x | 2.9x | 0.8x |
|---|
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x |
