CGN Mining Co Ltd reports 814% Net Income growth while 38.9% Revenue decline
30/03/2016 • About CGN Mining Co Ltd (
$1164) • By InTwits
CGN Mining Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 36.9% in 2015 vs. 12.8% in 2014 vs. -17.2% in 2011
- EBITDA Margin is quite volatile: 36.9% in 2015, 12.8% in 2014, 7.4% in 2013, 3.9% in 2012, -17.2% in 2011
- CGN Mining Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has highly profitable business model: ROIC is at 16.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CGN Mining Co Ltd ($1164) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 373 | 1,232 | 797 | 1,152 | 703 | -38.9% |
| Gross Profit | 108 | 201 | 153 | 176 | 283 | 60.7% |
| SG&A | 191 | 165 | 100 | 34 | 31 | -7.1% |
| EBITDA | -64 | 48 | 59 | 147 | 259 | 76.1% |
| Net Income | -230 | 19 | 16 | -42 | 298 | -814.5% |
Balance Sheet
|
|---|
| Cash | 1,263 | 605 | 1,030 | 234 | 286 | 22.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | 290 | |
| Long Term Debt | 467 | 493 | 521 | 550 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 9 | 5 | 1 | 1 | 1 | -32.0% |
Ratios
|
|---|
| Revenue growth | 13.6% | 230.6% | -35.4% | 44.6% | -38.9% | |
| EBITDA growth | -163.5% | -174.5% | 23.1% | 150.1% | 76.1% | |
| Gross Margin | 29.0% | 16.3% | 19.2% | 15.3% | 40.2% | 24.9% |
| EBITDA Margin | -17.2% | 3.9% | 7.4% | 12.8% | 36.9% | 24.1% |
| Net Income Margin | -61.7% | 1.5% | 2.1% | -3.6% | 42.4% | 46.0% |
| SG&A, % of revenue | 51.3% | 13.4% | 12.5% | 2.9% | 4.5% | 1.5% |
| CAPEX, % of revenue | 2.4% | 0.4% | 0.1% | 0.1% | 0.1% | 0.0% |
| ROIC | -6.4% | 2.6% | 3.3% | 7.9% | 16.7% | 8.8% |
| ROE | -26.4% | 1.8% | 1.5% | -3.4% | 27.6% | 31.0% |
| Net Debt/EBITDA | | -2.3x | -8.7x | 2.1x | 0.0x | -2.1x |
Revenue and profitability
The company's Revenue dropped on 38.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 24.1 pp from 12.8% to 36.9% in 2015.
Gross Margin surged on 24.9 pp from 15.3% to 40.2% in 2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 2.9% to 4.5% in 2015.
Net Income marign surged on 46.0 pp from -3.6% to 42.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.12%. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 0.11%.
Return on investment
The company operates at high and attractive ROE (27.62%) while ROIC is a bit lower (16.69%). ROIC increased on 8.8 pp from 7.9% to 16.7% in 2015. ROE jumped on 31.0 pp from -3.4% to 27.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.0x and Debt / EBITDA is 1.1x. Net Debt / EBITDA dropped on 2.1x from 2.1x to 0.017x in 2015. Debt dropped on 47.2% in 2015 while cash jumped on 22.2% in 2015.
Appendix 1: Peers in Mining
Below you can find CGN Mining Co Ltd benchmarking vs. other companies in Mining 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 |
|---|
| Mongolia Energy Corp Ltd ($276) | | | 89.7% | -95.8% | 2,361.6% |
| REX Global Entertainment Holdings Ltd ($164) | | -12.3% | 81.6% | -15.5% | 96.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Zijin Mining Group Co Ltd ($2899) | | 21.6% | 2.5% | 18.1% | 26.9% |
| China Gold International Resources Corp Ltd ($2099) | | | -9.0% | -8.2% | 22.4% |
| |
|---|
| Median (40 companies) | 68.5% | 5.0% | 2.4% | -5.9% | -13.0% |
|---|
| CGN Mining Co Ltd ($1164) | | 230.6% | -35.4% | 44.6% | -38.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | -6.5% | 2.5% | 5.1% | 39.6% | 93.0% |
| REX Global Entertainment Holdings Ltd ($164) | 15.4% | -15.8% | -7.8% | -0.8% | 88.6% |
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | 79.7% |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| Timeless Software Ltd ($8028) | 19.2% | 17.7% | 48.5% | 29.4% | 42.1% |
| |
|---|
| Median (41 companies) | 19.1% | 13.4% | 13.8% | 15.5% | 20.3% |
|---|
| CGN Mining Co Ltd ($1164) | 29.0% | 16.3% | 19.2% | 15.3% | 40.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | 51.3% |
| Timeless Software Ltd ($8028) | -70.8% | -113.1% | 24.7% | -13.7% | 46.1% |
| Hengxing Gold Holding Co Ltd ($2303) | | | -766.2% | 24.5% | 43.9% |
| Sino Prosper Group Holdings Ltd ($766) | -127.2% | -138.6% | -138.2% | -378.4% | 42.9% |
| |
|---|
| Median (41 companies) | 7.0% | 4.9% | 7.9% | 4.7% | 5.5% |
|---|
| CGN Mining Co Ltd ($1164) | -17.2% | 3.9% | 7.4% | 12.8% | 36.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| Chinalco Mining Corp International ($3668) | | | | | 115.6% |
| China Dynamics Holdings Ltd ($476) | 1.6% | 1.8% | 0.0% | 1.0% | 113.8% |
| MMG Ltd ($1208) | 17.1% | 25.7% | 22.6% | 41.9% | 100.4% |
| |
|---|
| Median (41 companies) | 16.3% | 17.4% | 16.8% | 15.8% | 12.3% |
|---|
| CGN Mining Co Ltd ($1164) | 2.4% | 0.4% | 0.1% | 0.1% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| United Co RUSAL PLC ($486) | 7.5% | 0.3% | -9.0% | 6.3% | 12.3% |
| Timeless Software Ltd ($8028) | -18.0% | -29.1% | 7.3% | -4.6% | 11.6% |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| Hengxing Gold Holding Co Ltd ($2303) | | -7.2% | -8.1% | 0.0% | 8.6% |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | 7.9% |
| |
|---|
| Median (42 companies) | 3.7% | 0.9% | 2.7% | 0.0% | 1.1% |
|---|
| CGN Mining Co Ltd ($1164) | -6.4% | 2.6% | 3.3% | 7.9% | 16.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chinalco Mining Corp International ($3668) | | | | | 25.0x |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| Kaz Minerals ($847) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
| Aluminum Corp of China Ltd ($2600) | 7.7x | 139.2x | 8.5x | | 18.0x |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 1.5x | 4.1x | 6.4x | 13.5x |
| |
|---|
| Median (27 companies) | 1.1x | 2.1x | 2.0x | 4.6x | 4.1x |
|---|
| CGN Mining Co Ltd ($1164) | | -2.3x | -8.7x | 2.1x | 0.0x |
