China Hanking Holdings Ltd Net Debt / EBITDA jumped on 22.6x from 4.7x to 27.3x in 2015 and Debt surged on 31.6%
30/03/2016 • About China Hanking Holdings Ltd (
$3788) • By InTwits
China Hanking Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Hanking Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -5.4%
- EBITDA Margin is quite volatile: 8.7% in 2015, 30.6% in 2014, 40.9% in 2013, 40.4% in 2012, 63.1% in 2011
- China Hanking Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.8%. At the same time it's a lot of higher than industry average of 21.5%.
- CAPEX is quite volatile: 34.8 in 2015, 8.0 in 2014, 10.6 in 2013, 13.0 in 2012, 4.1 in 2011
- The company has unprofitable business model: ROIC is at -5.4%
- It operates with high leverage: Net Debt/EBITDA is 27.3x 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.
China Hanking Holdings Ltd ($3788) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,726 | 1,397 | 1,456 | 1,369 | 1,220 | -10.9% |
| Gross Profit | 1,141 | 749 | 792 | 481 | 291 | -39.6% |
| SG&A | 173 | 303 | 360 | 309 | 269 | -13.0% |
| EBITDA | 1,089 | 565 | 595 | 419 | 106 | -74.8% |
| Net Income | 453 | 297 | 193 | 9 | -382 | -4,344.7% |
Balance Sheet
|
|---|
| Cash | 318 | 582 | 370 | 300 | 99 | -66.9% |
| Short Term Debt | 630 | 806 | 1,397 | 1,672 | 2,766 | 65.4% |
| Long Term Debt | 0 | 0 | 483 | 590 | 211 | -64.1% |
Cash flow
|
|---|
| Capex | 423 | 531 | 519 | 276 | 372 | 34.5% |
Ratios
|
|---|
| Revenue growth | 33.1% | -19.1% | 4.2% | -6.0% | -10.9% | |
| EBITDA growth | 38.5% | -48.1% | 5.3% | -29.6% | -74.8% | |
| Gross Margin | 66.1% | 53.6% | 54.4% | 35.1% | 23.8% | -11.3% |
| EBITDA Margin | 63.1% | 40.4% | 40.9% | 30.6% | 8.7% | -21.9% |
| Net Income Margin | 26.2% | 21.2% | 13.2% | 0.7% | -31.3% | -31.9% |
| SG&A, % of revenue | 10.0% | 21.7% | 24.8% | 22.6% | 22.1% | -0.5% |
| CAPEX, % of revenue | 24.5% | 38.0% | 35.7% | 20.2% | 30.5% | 10.3% |
| ROIC | 63.1% | 19.0% | 14.3% | 5.0% | -5.4% | -10.4% |
| ROE | 54.7% | 22.5% | 14.7% | 0.7% | -39.4% | -40.2% |
| Net Debt/EBITDA | 0.3x | 0.4x | 2.5x | 4.7x | 27.3x | 22.6x |
Revenue and profitability
China Hanking Holdings Ltd's Revenue dropped on 10.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 7.4% to 9.3% in 2015.
Gross Margin dropped on 11.3 pp from 35.1% to 23.8% in 2015. SG&A as a % of Revenue decreased slightly on 0.54 pp from 22.6% to 22.1% in 2015.
Net Income marign dropped on 31.9 pp from 0.66% to -31.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 30.5%. China Hanking Holdings Ltd's CAPEX/Revenue decreased on 7.5 pp from 38.0% in 2012 to 30.5% in 2015. It's average level of CAPEX/Revenue for the last three years was 28.8%.China Hanking Holdings Ltd has spent a lot to CAPEX (352% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-5.40%) and ROE (-39.43%). ROIC dropped on 10.4 pp from 5.0% to -5.4% in 2015. ROE dropped on 40.2 pp from 0.75% to -39.4% in 2015.
Leverage (Debt)
Debt level is 27.3x Net Debt / EBITDA and 28.2x Debt / EBITDA. Net Debt / EBITDA surged on 22.6x from 4.7x to 27.3x in 2015. Debt jumped on 31.6% in 2015 while cash dropped on 66.9% in 2015.
Appendix 1: Peers in Iron/Steel
Below you can find China Hanking Holdings Ltd benchmarking vs. other companies in Iron/Steel 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 |
|---|
| 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% | -1.1% | -1.7% | -17.9% |
|---|
| China Hanking Holdings Ltd ($3788) | | -19.1% | 4.2% | -6.0% | -10.9% |
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% |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | 22.4% |
| Vale SA ($6210) | 58.4% | 45.4% | 48.3% | 33.1% | 19.6% |
| |
|---|
| Median (16 companies) | 18.6% | 14.8% | 12.7% | 11.3% | 13.7% |
|---|
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | 23.8% |
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) | 7.6% | 12.6% | 11.7% | 7.1% | 0.6% |
|---|
| China Hanking Holdings Ltd ($3788) | 63.1% | 40.4% | 40.9% | 30.6% | 8.7% |
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% |
| 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% |
| Wanguo International Mining Group Ltd ($3939) | 13.2% | 24.0% | 39.3% | 32.5% | 17.4% |
| |
|---|
| Median (16 companies) | 7.3% | 8.3% | 10.5% | 6.4% | 8.0% |
|---|
| China Hanking Holdings Ltd ($3788) | 24.5% | 38.0% | 35.7% | 20.2% | 30.5% |
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) | 10.5% | 6.2% | 7.5% | 3.1% | -3.4% |
|---|
| China Hanking Holdings Ltd ($3788) | 63.1% | 19.0% | 14.3% | 5.0% | -5.4% |
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 Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x |
| Da Ming International Holdings Ltd ($1090) | 8.0x | 8.4x | 8.5x | 4.0x | |
| |
|---|
| Median (13 companies) | 2.2x | 2.3x | 3.0x | 2.9x | 0.8x |
|---|
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | 27.3x |
