China Railway Group Ltd Net Debt / EBITDA dropped on 1.1x from 4.5x to 3.4x in 2015 and Debt decreased slightly on 1.7%
30/03/2016 • About China Railway Group Ltd (
$390) • By InTwits
China Railway Group 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: 4.3% in 2015 vs. 4.3% in 2014 vs. 4.3% in 2011
- China Railway Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 31.4%.
- CAPEX is quite volatile: 16,529 in 2015, 13,530 in 2014, 10,083 in 2013, 8,362 in 2012, 5,393 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Railway Group Ltd ($390) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 442,216 | 465,625 | 540,394 | 590,166 | 599,942 | 1.7% |
| Gross Profit | 32,253 | 35,561 | 40,340 | 48,515 | 48,686 | 0.4% |
| SG&A | 16,138 | 17,257 | 16,722 | 19,529 | 19,851 | 1.6% |
| EBITDA | 19,042 | 20,962 | 24,204 | 25,659 | 25,824 | 0.6% |
| Net Income | 6,690 | 7,390 | 9,374 | 10,360 | 12,258 | 18.3% |
Balance Sheet
|
|---|
| Cash | 60,254 | 67,738 | 75,658 | 68,679 | 93,304 | 35.9% |
| Short Term Debt | 56,675 | 74,394 | 82,855 | 90,015 | 85,555 | -5.0% |
| Long Term Debt | 73,901 | 88,632 | 104,352 | 95,345 | 96,705 | 1.4% |
Cash flow
|
|---|
| Capex | 8,363 | 8,050 | 8,327 | 8,050 | 8,052 | 0.0% |
Ratios
|
|---|
| Revenue growth | -3.1% | 5.3% | 16.1% | 9.2% | 1.7% | |
| EBITDA growth | 15.8% | 10.1% | 15.5% | 6.0% | 0.6% | |
| Gross Margin | 7.3% | 7.6% | 7.5% | 8.2% | 8.1% | -0.1% |
| EBITDA Margin | 4.3% | 4.5% | 4.5% | 4.3% | 4.3% | -0.0% |
| Net Income Margin | 1.5% | 1.6% | 1.7% | 1.8% | 2.0% | 0.3% |
| SG&A, % of revenue | 3.6% | 3.7% | 3.1% | 3.3% | 3.3% | -0.0% |
| CAPEX, % of revenue | 1.9% | 1.7% | 1.5% | 1.4% | 1.3% | -0.0% |
| ROIC | 6.8% | 6.4% | 6.6% | 6.5% | 5.8% | -0.6% |
| ROE | 9.6% | 9.9% | 11.4% | 11.3% | 10.9% | -0.4% |
| Net Debt/EBITDA | 3.7x | 4.5x | 4.6x | 4.5x | 3.4x | -1.1x |
Revenue and profitability
China Railway Group Ltd's Revenue increased slightly on 1.7% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.1 pp from 15.2% to 16.3% in 2015.
Gross Margin showed almost no change 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 Group Ltd's CAPEX/Revenue was 1.3% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (5.84%) and ROE (10.92%). ROIC decreased slightly on 0.62 pp from 6.5% to 5.8% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 3.4x Net Debt / EBITDA and 7.1x Debt / EBITDA. Net Debt / EBITDA dropped on 1.1x from 4.5x to 3.4x in 2015. Debt decreased slightly on 1.7% in 2015 while cash jumped on 35.9% in 2015.
Appendix 1: Peers in Engineering&Construction
Below you can find China Railway Group 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% | 21.8% | 16.8% | 10.1% |
|---|
| China Railway Group Ltd ($390) | | 5.3% | 16.1% | 9.2% | 1.7% |
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 Group Ltd ($390) | 7.3% | 7.6% | 7.5% | 8.2% | 8.1% |
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 Group Ltd ($390) | 4.3% | 4.5% | 4.5% | 4.3% | 4.3% |
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% | 2.5% | 1.7% | 2.3% |
|---|
| China Railway Group Ltd ($390) | 1.9% | 1.7% | 1.5% | 1.4% | 1.3% |
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) | 7.0% | 6.5% | 5.6% | 4.4% | 3.4% |
|---|
| China Railway Group Ltd ($390) | 6.8% | 6.4% | 6.6% | 6.5% | 5.8% |
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 | 2.3x |
|---|
| China Railway Group Ltd ($390) | 3.7x | 4.5x | 4.6x | 4.5x | 3.4x |
