Chongqing Machinery & Electric Co Ltd reports 108% EBITDA decline and 5.0% Revenue decline
30/03/2016 • About Chongqing Machinery & Electric Co Ltd (
$2722) • By InTwits
Chongqing Machinery & Electric Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Chongqing Machinery & Electric Co Ltd doesn't have a profitable business model yet: 2015 ROIC is -2.9%
- EBITDA Margin is quite volatile: -0.3% in 2015, 4.2% in 2014, 4.2% in 2013, 4.1% in 2012, 10.1% in 2011
- Chongqing Machinery & Electric Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 4.0%.
- CAPEX is quite volatile: 544 in 2015, 1,306 in 2014, 894 in 2013, 877 in 2012, 1,413 in 2011
- The company has unprofitable business model: ROIC is at -2.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.4x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chongqing Machinery & Electric Co Ltd ($2722) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,546 | 8,908 | 9,701 | 9,486 | 9,010 | -5.0% |
| Gross Profit | 1,960 | 1,035 | 1,085 | 1,065 | 987 | -7.3% |
| SG&A | 1,105 | 973 | 1,016 | 1,070 | 1,358 | 26.9% |
| EBITDA | 1,062 | 363 | 404 | 397 | -30 | -107.7% |
| Net Income | 737 | 443 | 507 | 512 | 418 | -18.4% |
Balance Sheet
|
|---|
| Cash | 2,790 | 2,526 | 1,792 | 1,204 | 1,544 | 28.3% |
| Short Term Debt | 1,224 | 1,491 | 997 | 1,073 | 2,101 | 95.8% |
| Long Term Debt | 1,459 | 1,169 | 1,489 | 1,422 | 669 | -53.0% |
Cash flow
|
|---|
| Capex | 429 | 443 | 584 | 728 | 750 | 3.0% |
Ratios
|
|---|
| Revenue growth | 18.7% | -15.5% | 8.9% | -2.2% | -5.0% | |
| EBITDA growth | 17.8% | -65.8% | 11.4% | -1.7% | -107.7% | |
| Gross Margin | 18.6% | 11.6% | 11.2% | 11.2% | 11.0% | -0.3% |
| EBITDA Margin | 10.1% | 4.1% | 4.2% | 4.2% | -0.3% | -4.5% |
| Net Income Margin | 7.0% | 5.0% | 5.2% | 5.4% | 4.6% | -0.8% |
| SG&A, % of revenue | 10.5% | 10.9% | 10.5% | 11.3% | 15.1% | 3.8% |
| CAPEX, % of revenue | 4.1% | 5.0% | 6.0% | 7.7% | 8.3% | 0.7% |
| ROIC | 12.4% | 2.1% | 2.4% | 2.0% | -2.9% | -5.0% |
| ROE | 15.6% | 8.8% | 9.5% | 9.0% | 7.0% | -2.0% |
| Net Debt/EBITDA | -0.1x | 0.4x | 1.7x | 3.2x | | -3.2x |
Revenue and profitability
Chongqing Machinery & Electric Co Ltd's Revenue decreased on 5.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.7 pp from 8.6% to 10.2% in FY2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased on 3.8 pp from 11.3% to 15.1% in 2015.
Net Income marign decreased slightly on 0.76 pp from 5.4% to 4.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.3% in 2015. CAPEX/Revenue increased on 3.3 pp from 5.0% in 2012 to 8.3% in 2015. It's average level of CAPEX/Revenue for the last three years was 7.3%.
Return on investment
The company operates at negative ROIC (-2.94%) and low but positive ROE (6.99%). ROIC decreased on 5.0 pp from 2.0% to -2.9% in 2015. ROE decreased on 2.0 pp from 9.0% to 7.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is . Net Debt / EBITDA dropped on 3.2x from 3.2x to in 2015. Debt surged on 11.0% in 2015 while cash jumped on 28.3% in 2015.
Appendix 1: Peers in Hand/Machine Tools
Below we provide Chongqing Machinery & Electric Co Ltd benchmarking against other companies in Hand/Machine Tools industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cw Group Holdings Ltd ($1322) | | 3.1% | 25.7% | 69.5% | 48.4% |
| Techtronic Industries Co Ltd ($669) | | 5.1% | 11.6% | 10.5% | 6.0% |
| |
|---|
| Median (2 companies) | | 5.1% | 11.6% | 40.0% | 27.2% |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | | -15.5% | 8.9% | -2.2% | -5.0% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Techtronic Industries Co Ltd ($669) | 32.6% | 33.5% | 34.2% | 35.2% | 35.7% |
| Cw Group Holdings Ltd ($1322) | 23.8% | 27.4% | 19.7% | 18.0% | 16.8% |
| |
|---|
| Median (2 companies) | 23.8% | 33.5% | 34.2% | 26.6% | 26.2% |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | 18.6% | 11.6% | 11.2% | 11.2% | 11.0% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cw Group Holdings Ltd ($1322) | 18.8% | 19.3% | 16.0% | 15.2% | 13.8% |
| Techtronic Industries Co Ltd ($669) | 9.3% | 10.2% | 10.0% | 10.6% | 11.4% |
| |
|---|
| Median (2 companies) | 9.3% | 19.3% | 16.0% | 12.9% | 12.6% |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | 10.1% | 4.1% | 4.2% | 4.2% | -0.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Techtronic Industries Co Ltd ($669) | 2.6% | 2.7% | 2.4% | 3.0% | 3.2% |
| Cw Group Holdings Ltd ($1322) | 1.7% | 2.1% | 0.4% | 0.3% | 0.5% |
| |
|---|
| Median (2 companies) | 2.6% | 2.1% | 1.5% | 1.7% | 1.8% |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | 4.1% | 5.0% | 6.0% | 7.7% | 8.3% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cw Group Holdings Ltd ($1322) | 34.8% | 21.4% | 16.9% | 19.4% | 15.9% |
| Techtronic Industries Co Ltd ($669) | 8.8% | 10.3% | 10.9% | 12.9% | 13.3% |
| Genvon Group Ltd ($2389) | -4.4% | 22.4% | 5.7% | -0.7% | -4.7% |
| |
|---|
| Median (3 companies) | 8.8% | 21.4% | 10.9% | 12.9% | 13.3% |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | 12.4% | 2.1% | 2.4% | 2.0% | -2.9% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cw Group Holdings Ltd ($1322) | 0.6x | 0.2x | 1.7x | 1.7x | 1.8x |
| Techtronic Industries Co Ltd ($669) | 2.4x | 1.2x | 0.6x | 0.5x | 0.6x |
| |
|---|
| Median (2 companies) | 1.5x | 0.6x | 1.7x | 1.1x | 1.2x |
|---|
| Chongqing Machinery & Electric Co Ltd ($2722) | -0.1x | 0.4x | 1.7x | 3.2x | |
