China Merchants Bank Co Ltd revenue growth decelerated to 7.7% in 2015 vs. 33.9% a year earliner
30/03/2016 • About China Merchants Bank Co Ltd (
$3968) • By InTwits
China Merchants Bank Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Merchants Bank Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 3.5%.
- CAPEX is quite volatile: 25,711 in 2015, 17,793 in 2014, 15,105 in 2013, 9,763 in 2012, 6,846 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.7%
- It operates with high leverage: Net Debt/EBITDA is 0.9x 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.
China Merchants Bank Co Ltd ($3968) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 142,682 | 176,882 | 209,841 | 280,956 | 302,557 | 7.7% |
| Net Income | 36,129 | 45,268 | 51,743 | 55,911 | 57,696 | 3.2% |
Balance Sheet
|
|---|
| Cash | 471,350 | 752,262 | 556,089 | 710,771 | 584,342 | -17.8% |
| Short Term Debt | 273,183 | 368,507 | 639,314 | 859,039 | 1,168,702 | 36.0% |
| Long Term Debt | 31,187 | 77,111 | 68,936 | 104,864 | 59,776 | -43.0% |
Cash flow
|
|---|
| Capex | 4,226 | 6,494 | 8,211 | 8,125 | 9,079 | 11.7% |
Ratios
|
|---|
| Revenue growth | 42.3% | 24.0% | 18.6% | 33.9% | 7.7% | |
| Net Income Margin | 25.3% | 25.6% | 24.7% | 19.9% | 19.1% | -0.8% |
| CAPEX, % of revenue | 3.0% | 3.7% | 3.9% | 2.9% | 3.0% | 0.1% |
| ROIC | 9.2% | 8.6% | 6.8% | 5.9% | 4.7% | -1.2% |
| ROE | 24.2% | 24.8% | 22.2% | 19.3% | 17.1% | -2.2% |
Revenue and profitability
China Merchants Bank Co Ltd's Revenue increased on 7.7% in 2015.
Net Income marign decreased slightly on 0.83 pp from 19.9% to 19.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Merchants Bank Co Ltd had CAPEX/Revenue of 3.0%. China Merchants Bank Co Ltd's CAPEX/Revenue decreased slightly on 0.67 pp from 3.7% in 2012 to 3.0% in 2015. It's average CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at good ROE (17.09%) while ROIC is low (4.70%). ROIC decreased slightly on 1.2 pp from 5.9% to 4.7% in 2015. ROE decreased on 2.2 pp from 19.3% to 17.1% in 2015.
Leverage (Debt)
Debt surged on 27.4% in 2015 while cash dropped on 17.8% in 2015.
Management team
China Merchants Bank Co Ltd's CEO Tian Huiyu has spent 5 years at the company.
Appendix 1: Peers in Banks
Below you can find China Merchants Bank Co 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% | 19.6% | 10.4% | 13.8% | 6.3% |
|---|
| China Merchants Bank Co Ltd ($3968) | | 24.0% | 18.6% | 33.9% | 7.7% |
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% |
| Bank of China Ltd ($3988) | 6.3% | 4.7% | 5.4% | 4.7% | 4.8% |
| |
|---|
| Median (20 companies) | 3.3% | 3.2% | 3.7% | 3.3% | 2.8% |
|---|
| China Merchants Bank Co Ltd ($3968) | 3.0% | 3.7% | 3.9% | 2.9% | 3.0% |
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) | 6.3% | 6.0% | 6.3% | 5.4% | 4.3% |
|---|
| China Merchants Bank Co Ltd ($3968) | 9.2% | 8.6% | 6.8% | 5.9% | 4.7% |
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 |
|---|
