China Railway Construction Corp Ltd Net Debt / EBITDA dropped on 0.7x from 3.0x to 2.3x in 2015 while Revenue increased slightly on 1.3%
30/03/2016 • About China Railway Construction Corp Ltd (
$1186) • By InTwits
China Railway Construction Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.5% in 2015 vs. 5.2% in 2014 vs. 4.8% in 2011
- China Railway Construction Corp 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 31.4%.
- CAPEX is quite volatile: 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012, 12,054 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Railway Construction Corp Ltd ($1186) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 443,319 | 469,872 | 569,962 | 575,260 | 582,522 | 1.3% |
| Gross Profit | 33,992 | 36,983 | 42,714 | 46,885 | 50,766 | 8.3% |
| SG&A | 12,280 | 14,556 | 16,482 | 16,389 | 16,678 | 1.8% |
| EBITDA | 21,131 | 23,859 | 25,961 | 29,885 | 31,751 | 6.2% |
| Net Income | 7,854 | 8,629 | 10,345 | 11,735 | 12,646 | 7.8% |
Balance Sheet
|
|---|
| Cash | 80,474 | 67,104 | 54,344 | 89,950 | 114,249 | 27.0% |
| Short Term Debt | 59,094 | 73,701 | 82,947 | 96,576 | 107,201 | 11.0% |
| Long Term Debt | 32,357 | 34,402 | 75,019 | 83,763 | 79,964 | -4.5% |
Cash flow
|
|---|
| Capex | 12,054 | 10,500 | 17,645 | 21,838 | 27,144 | 24.3% |
Ratios
|
|---|
| Revenue growth | -2.8% | 6.0% | 21.3% | 0.9% | 1.3% | |
| EBITDA growth | 50.7% | 12.9% | 8.8% | 15.1% | 6.2% | |
| Gross Margin | 7.7% | 7.9% | 7.5% | 8.2% | 8.7% | 0.6% |
| EBITDA Margin | 4.8% | 5.1% | 4.6% | 5.2% | 5.5% | 0.3% |
| Net Income Margin | 1.8% | 1.8% | 1.8% | 2.0% | 2.2% | 0.1% |
| SG&A, % of revenue | 2.8% | 3.1% | 2.9% | 2.8% | 2.9% | 0.0% |
| CAPEX, % of revenue | 2.7% | 2.2% | 3.1% | 3.8% | 4.7% | 0.9% |
| ROIC | 8.4% | 8.1% | 7.3% | 7.0% | 6.6% | -0.4% |
| ROE | 12.9% | 12.6% | 13.5% | 13.5% | 12.4% | -1.1% |
| Net Debt/EBITDA | 0.5x | 1.7x | 4.0x | 3.0x | 2.3x | -0.7x |
Revenue and profitability
China Railway Construction Corp Ltd's Revenue increased slightly on 1.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 15.2% to 16.3% in 2015.
Gross Margin increased slightly on 0.56 pp from 8.2% to 8.7% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
China Railway Construction Corp Ltd's CAPEX/Revenue was 4.7% in 2015. China Railway Construction Corp Ltd showed CAPEX/Revenue growth of 2.4 pp from 2.2% in 2012 to 4.7% in 2015. Average CAPEX/Revenue for the last three years was 3.9%.China Railway Construction Corp Ltd maintained rich investment policy and has spent a big chunk of EBITDA (85.5%) to CAPEX.
Return on investment
The company operates at good ROE (12.37%) while ROIC is low (6.61%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.1 pp from 13.5% to 12.4% in 2015.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 5.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 3.0x to 2.3x in 2015. Debt increased on 3.8% in 2015 while cash surged on 27.0% in 2015.
Appendix 1: Peers in Engineering&Construction
Below you can find China Railway Construction Corp Ltd benchmarking vs. other companies in Engineering&Construction 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 |
|---|
| CNQC International Holdings Ltd ($1240) | | 21.6% | 91.0% | 103.7% | 807.4% |
| China National Culture Group Ltd ($745) | | -39.1% | -76.8% | -55.8% | 592.3% |
| Vision Fame International Holding Ltd ($1315) | | -9.9% | 45.9% | -10.5% | 105.6% |
| Sino Credit Holdings Ltd ($628) | | -13.8% | | | 97.4% |
| Grand Ming Group Holdings Ltd ($1271) | | 131.0% | -26.9% | -37.4% | 74.8% |
| |
|---|
| Median (41 companies) | 59.0% | 11.5% | 21.5% | 16.8% | 10.1% |
|---|
| China Railway Construction Corp Ltd ($1186) | | 6.0% | 21.3% | 0.9% | 1.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 61.6% | 66.4% | 62.1% | 62.4% | 61.1% |
| Broad Greenstate International Co Ltd ($1253) | 16.7% | 20.1% | 28.7% | 35.8% | 36.7% |
| China National Culture Group Ltd ($745) | -46.6% | 0.9% | 12.1% | 10.3% | 32.3% |
| Kingbo Strike Ltd ($1421) | 22.9% | 32.4% | 44.4% | 40.3% | 30.7% |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 50.1% | 54.1% | 54.3% | 41.5% | 30.1% |
| |
|---|
| Median (36 companies) | 13.1% | 13.5% | 15.1% | 14.5% | 14.2% |
|---|
| China Railway Construction Corp Ltd ($1186) | 7.7% | 7.9% | 7.5% | 8.2% | 8.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 60.0% | 62.8% | 63.7% | 62.8% | 61.7% |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 39.8% | 31.2% | 20.6% | 36.2% | 60.9% |
| Beijing Capital International Airport Co Ltd ($694) | 55.1% | 53.4% | 52.9% | 50.3% | 51.6% |
| China National Culture Group Ltd ($745) | -70.3% | -30.4% | -72.7% | -279.2% | 45.3% |
| Chevalier International Holdings Ltd ($25) | 6.7% | 10.4% | 11.9% | 12.8% | 37.5% |
| |
|---|
| Median (41 companies) | 9.3% | 9.8% | 8.8% | 8.1% | 7.6% |
|---|
| China Railway Construction Corp Ltd ($1186) | 4.8% | 5.1% | 4.6% | 5.2% | 5.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HNA Infrastructure Company Ltd ($357) | 43.3% | 36.8% | 5.7% | 85.4% | 155.4% |
| Grand Ming Group Holdings Ltd ($1271) | 10.6% | 0.0% | 16.1% | 8.7% | 33.8% |
| Beijing Capital International Airport Co Ltd ($694) | 5.3% | 3.5% | 6.6% | 7.2% | 28.2% |
| Louis XIII Holdings Ltd ($577) | 2.3% | 1.2% | 29.5% | 9.3% | 16.1% |
| PYI Corp Ltd ($498) | 6.6% | 3.7% | 4.2% | 24.5% | 13.1% |
| |
|---|
| Median (41 companies) | 4.3% | 2.5% | 2.4% | 1.6% | 2.2% |
|---|
| China Railway Construction Corp Ltd ($1186) | 2.7% | 2.2% | 3.1% | 3.8% | 4.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | | 98.3% | 54.9% | 43.7% |
| Ngai Shun Holdings Ltd ($1246) | | 68.8% | 77.2% | 45.2% | 31.0% |
| Broad Greenstate International Co Ltd ($1253) | | 33.2% | 85.1% | 51.2% | 26.0% |
| CNQC International Holdings Ltd ($1240) | 23.1% | 12.2% | 22.3% | 40.4% | 21.8% |
| Tysan Holdings Ltd ($687) | 16.1% | 4.1% | 10.6% | 14.0% | 21.0% |
| |
|---|
| Median (43 companies) | 6.9% | 6.4% | 5.6% | 4.4% | 3.4% |
|---|
| China Railway Construction Corp Ltd ($1186) | 8.4% | 8.1% | 7.3% | 7.0% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Deson Development International Holdings ($262) | 3.1x | 3.8x | 4.9x | 13.7x | 47.0x |
| Hsin Chong Construction Group Ltd ($404) | 4.3x | 1.8x | 8.0x | 10.2x | 41.7x |
| China Resources and Transportation Group Ltd ($269) | | | | 66.7x | 29.7x |
| CNC Holdings Ltd ($8356) | -0.7x | | 22.0x | 21.9x | 24.3x |
| Louis XIII Holdings Ltd ($577) | -1.6x | 0.8x | -12.5x | -23.2x | 19.1x |
| |
|---|
| Median (35 companies) | 0.5x | 1.0x | 0.9x | 1.5x | 2.4x |
|---|
| China Railway Construction Corp Ltd ($1186) | 0.5x | 1.7x | 4.0x | 3.0x | 2.3x |
