Bank of China Ltd revenue increased on 3.0% in 2015
30/03/2016 • About Bank of China Ltd (
$3988) • By InTwits
Bank of China Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank of China Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's a lot of higher than industry average of 3.5%.
- CAPEX is quite volatile: 44,663 in FY2015, 41,414 in FY2014, 27,668 in FY2013, 23,980 in FY2012, 18,902 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is -1.7x while industry average is -5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bank of China Ltd ($3988) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 518,688 | 620,899 | 649,194 | 744,656 | 767,159 | 3.0% |
| Net Income | 124,276 | 139,656 | 156,911 | 169,595 | 170,845 | 0.7% |
Balance Sheet
|
|---|
| Cash | 1,981,484 | 2,006,772 | 2,214,340 | 2,391,211 | 2,269,434 | -5.1% |
| Short Term Debt | 1,721,637 | 2,007,655 | 2,163,878 | 2,461,085 | 2,691,922 | 9.4% |
| Long Term Debt | 193,226 | 221,741 | 182,224 | 201,255 | 249,261 | 23.9% |
Cash flow
|
|---|
| Capex | 32,455 | 29,490 | 34,771 | 35,108 | 36,942 | 5.2% |
Ratios
|
|---|
| Revenue growth | 28.6% | 19.7% | 4.6% | 14.7% | 3.0% | |
| Net Income Margin | 24.0% | 22.5% | 24.2% | 22.8% | 22.3% | -0.5% |
| CAPEX, % of revenue | 6.3% | 4.7% | 5.4% | 4.7% | 4.8% | 0.1% |
| ROIC | 6.3% | 6.2% | 6.3% | 6.2% | 5.4% | -0.8% |
| ROE | 18.2% | 18.0% | 17.9% | 17.0% | 15.0% | -2.0% |
Revenue and profitability
Bank of China Ltd's Revenue increased on 3.0% in 2015.
Net Income marign decreased slightly on 0.51 pp from 22.8% to 22.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
Bank of China Ltd's CAPEX/Revenue was 4.8% in 2015. Bank of China Ltd's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 5.0%.
Return on investment
The company operates at good ROE (15.02%) while ROIC is low (5.40%). ROIC decreased slightly on 0.77 pp from 6.2% to 5.4% in 2015. ROE decreased slightly on 2.0 pp from 17.0% to 15.0% in 2015.
Leverage (Debt)
Debt jumped on 10.5% in 2015 while cash decreased on 5.1% in 2015.
Appendix 1: Peers in Banks
Below you can find Bank of China Ltd benchmarking vs. other companies in Banks 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 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | | -20.6% | 43.4% | 6.8% | 116.4% |
| Huishang Bank Corp Ltd ($3698) | | 33.9% | 22.8% | 24.3% | 24.6% |
| Shengjing Bank Co Ltd ($2066) | | 36.5% | 36.3% | 40.1% | 24.3% |
| Bank of Chongqing Co Ltd ($1963) | | 38.4% | 26.6% | 28.4% | 18.5% |
| BOC Hong Kong Holdings Ltd ($2388) | | 15.1% | 11.4% | -3.0% | 11.6% |
| |
|---|
| Median (20 companies) | 51.3% | 21.5% | 11.7% | 13.9% | 7.2% |
|---|
| Bank of China Ltd ($3988) | | 19.7% | 4.6% | 14.7% | 3.0% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 34.2% | 4.1% | 29.9% | 27.0% | 33.5% |
| |
|---|
| Median (1 company) | 34.2% | 4.1% | 29.9% | 27.0% | 33.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dah Sing Banking Group Ltd ($2356) | 7.8% | 3.9% | 4.1% | 2.2% | 7.5% |
| Bank of Communications Co Ltd ($3328) | 3.1% | 3.6% | 5.1% | 5.3% | 7.2% |
| Dah Sing Financial Holdings Ltd ($440) | 5.4% | 3.0% | 3.4% | 1.7% | 5.9% |
| Harbin Bank Co Ltd ($6138) | 20.0% | 19.8% | 9.9% | 6.5% | 5.8% |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.2% | 4.0% | 4.3% | 4.8% | 4.4% |
| |
|---|
| Median (20 companies) | 3.2% | 3.2% | 3.7% | 3.1% | 2.8% |
|---|
| Bank of China Ltd ($3988) | 6.3% | 4.7% | 5.4% | 4.7% | 4.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Construction Bank Corp ($939) | 11.6% | 11.1% | 11.7% | 10.8% | 8.4% |
| Hang Seng Bank Ltd ($11) | 9.0% | 8.6% | 9.5% | 9.0% | 8.3% |
| Industrial & Commercial Bank of China Ltd ($1398) | 10.6% | 9.9% | 10.2% | 9.9% | 8.1% |
| BOC Hong Kong Holdings Ltd ($2388) | 5.1% | 5.9% | 6.4% | 5.8% | 6.2% |
| Dah Sing Financial Holdings Ltd ($440) | 3.2% | 3.8% | 5.1% | 5.2% | 5.9% |
| |
|---|
| Median (20 companies) | 6.4% | 6.0% | 6.3% | 5.4% | 4.3% |
|---|
| Bank of China Ltd ($3988) | 6.3% | 6.2% | 6.3% | 6.2% | 5.4% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -5.7x | -66.3x | -7.1x | -10.6x | -5.7x |
| |
|---|
| Median (1 company) | -5.7x | -66.3x | -7.1x | -10.6x | -5.7x |
|---|
