Industrial & Commercial Bank of China Ltd revenue growth decelerated from 9.8% in 2014 to 4.6% in 2015
30/03/2016 • About Industrial & Commercial Bank of China Ltd (
$1398) • By InTwits
Industrial & Commercial Bank of China Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Industrial & Commercial Bank of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's a lot of higher than industry average of 3.5%.
- CAPEX is quite volatile: 44,663 in FY2015, 41,414 in FY2014, 27,668 in FY2013, 23,980 in FY2012, 18,902 in FY2011
- The company has business model with low profitability: ROIC is at 8.1%
- It operates with high leverage: Net Debt/EBITDA is -1.7x 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.
Industrial & Commercial Bank of China Ltd ($1398) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 705,482 | 842,571 | 915,094 | 1,005,230 | 1,051,953 | 4.6% |
| Net Income | 208,265 | 238,532 | 262,649 | 275,811 | 277,131 | 0.5% |
Balance Sheet
|
|---|
| Cash | 2,762,156 | 3,174,943 | 3,294,007 | 3,523,622 | 3,059,633 | -13.2% |
| Short Term Debt | 1,341,390 | 1,487,938 | 1,269,979 | 1,539,870 | 2,266,070 | 47.2% |
| Long Term Debt | 204,161 | 232,186 | 253,018 | 279,590 | 306,622 | 9.7% |
Cash flow
|
|---|
| Capex | 22,896 | 31,852 | 44,427 | 53,957 | 42,297 | -21.6% |
Ratios
|
|---|
| Revenue growth | 29.3% | 19.4% | 8.6% | 9.8% | 4.6% | |
| Net Income Margin | 29.5% | 28.3% | 28.7% | 27.4% | 26.3% | -1.1% |
| CAPEX, % of revenue | 3.2% | 3.8% | 4.9% | 5.4% | 4.0% | -1.3% |
| ROIC | 10.6% | 9.9% | 10.2% | 9.9% | 8.1% | -1.8% |
| ROE | 23.4% | 22.9% | 21.9% | 19.7% | 16.7% | -3.0% |
Revenue and profitability
The company's Revenue increased on 4.6% in 2015.
Net Income marign decreased slightly on 1.1 pp from 27.4% to 26.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
Industrial & Commercial Bank of China Ltd's CAPEX/Revenue was 4.0% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 4.7%.
Return on investment
The company operates at good ROE (16.69%) while ROIC is low (8.07%). ROIC decreased slightly on 1.8 pp from 9.9% to 8.1% in 2015. ROE decreased on 3.0 pp from 19.7% to 16.7% in 2015.
Leverage (Debt)
Debt surged on 41.4% in 2015 while cash dropped on 13.2% in 2015.
Appendix 1: Peers in Banks
Below we provide Industrial & Commercial Bank of China Ltd benchmarking against other companies in Banks 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 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% | 21.6% | 11.7% | 14.8% | 7.2% |
|---|
| Industrial & Commercial Bank of China Ltd ($1398) | | 19.4% | 8.6% | 9.8% | 4.6% |
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) | 3.2% | 3.2% | 3.7% | 3.1% | 2.8% |
|---|
| Industrial & Commercial Bank of China Ltd ($1398) | 3.2% | 3.8% | 4.9% | 5.4% | 4.0% |
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% |
| 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% |
| Chong Hing Bank Ltd ($1111) | 6.3% | 5.5% | 5.2% | 16.4% | 5.7% |
| |
|---|
| Median (20 companies) | 6.3% | 6.0% | 6.3% | 5.4% | 4.3% |
|---|
| Industrial & Commercial Bank of China Ltd ($1398) | 10.6% | 9.9% | 10.2% | 9.9% | 8.1% |
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 |
|---|
