Shandong Molong Petroleum Machinery Co Ltd Net Debt / EBITDA surged on 123.8x from 5.6x to 129.4x in 2015 while EBITDA dropped on 95.2%
30/03/2016 • About Shandong Molong Petroleum Machinery Co Ltd (
$568) • By InTwits
Shandong Molong Petroleum Machinery Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shandong Molong Petroleum Machinery Co Ltd is a company in decline: 2015 revenue growth was -36.1%, 5 years revenue CAGR was -9.9%
- EBITDA Margin is quite volatile: 0.9% in 2015, 12.3% in 2014, 6.5% in 2013, 12.9% in 2012, 12.9% in 2011
- Shandong Molong Petroleum Machinery Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.6%. At the same time it's a lot of higher than industry average of 5.9%.
- CAPEX is quite volatile: 251 in 2015, 292 in 2014, 460 in 2013, 605 in 2012, 409 in 2011
- The company has unprofitable business model: ROIC is at -5.2%
- It operates with high leverage: Net Debt/EBITDA is 129.4x while industry average is 5.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shandong Molong Petroleum Machinery Co Ltd ($568) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,737 | 2,950 | 2,267 | 2,507 | 1,603 | -36.1% |
| Gross Profit | 329 | 326 | 191 | 372 | 107 | -71.1% |
| SG&A | 146 | 164 | 227 | 300 | 300 | -0.0% |
| EBITDA | 354 | 381 | 148 | 307 | 15 | -95.2% |
| Net Income | 168 | 134 | -176 | 20 | -260 | -1,382.9% |
Balance Sheet
|
|---|
| Cash | 414 | 484 | 598 | 615 | 350 | -43.1% |
| Short Term Debt | 1,094 | 1,633 | 1,795 | 1,842 | 2,273 | 23.4% |
| Long Term Debt | 0 | 0 | 497 | 498 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 409 | 605 | 460 | 292 | 251 | -14.1% |
Ratios
|
|---|
| Revenue growth | 1.4% | 7.8% | -23.2% | 10.6% | -36.1% | |
| EBITDA growth | -18.1% | 7.6% | -61.1% | 107.8% | -95.2% | |
| Gross Margin | 12.0% | 11.1% | 8.4% | 14.8% | 6.7% | -8.1% |
| EBITDA Margin | 12.9% | 12.9% | 6.5% | 12.3% | 0.9% | -11.3% |
| Net Income Margin | 6.2% | 4.6% | -7.8% | 0.8% | -16.2% | -17.0% |
| SG&A, % of revenue | 5.3% | 5.5% | 10.0% | 12.0% | 18.7% | 6.7% |
| CAPEX, % of revenue | 14.9% | 20.5% | 20.3% | 11.6% | 15.6% | 4.0% |
| ROIC | 4.5% | 3.8% | -1.8% | 1.3% | -5.2% | -6.5% |
| ROE | 6.1% | 4.7% | -6.3% | 0.8% | -10.1% | -10.9% |
| Net Debt/EBITDA | 1.9x | 3.0x | 11.4x | 5.6x | 129.4x | 123.8x |
Revenue and profitability
The company's Revenue dropped on 36.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 2.1% to 2.7% in FY2015.
Gross Margin decreased on 8.1 pp from 14.8% to 6.7% in 2015. SG&A as a % of Revenue increased on 6.7 pp from 12.0% to 18.7% in 2015.
Net Income marign dropped on 17.0 pp from 0.81% to -16.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 15.6%. Shandong Molong Petroleum Machinery Co Ltd's CAPEX/Revenue decreased on 4.9 pp from 20.5% in 2012 to 15.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 15.9%.Battling declining revenue the company made large investments to CAPEX (1,687% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-5.23%) and ROE (-10.12%). ROIC decreased on 6.5 pp from 1.3% to -5.2% in 2015. ROE dropped on 10.9 pp from 0.75% to -10.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 129.4x and Debt / EBITDA is 153.0x. Net Debt / EBITDA surged on 123.8x from 5.6x to 129.4x in 2015. Debt decreased on 2.9% in 2015 while cash dropped on 43.1% in 2015.
Appendix 1: Peers in Machinery-Diversified
Below you can find Shandong Molong Petroleum Machinery Co Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Sun East Technology Holdings Ltd ($365) | | -25.1% | -10.7% | 39.3% | 6.4% |
| Shanghai Prime Machinery Co Ltd ($2345) | | 2.6% | -8.9% | 37.3% | 52.8% |
| Sinoref Holdings Ltd ($1020) | 1.5% | -0.2% | -42.2% | 29.2% | |
| North Asia Strategic Holdings Ltd ($8080) | | -52.2% | -29.1% | 23.7% | 42.6% |
| Huazhang Technology Holding Ltd ($1673) | | 131.6% | 9.5% | 22.9% | 23.5% |
| |
|---|
| Median (23 companies) | 19.3% | -6.8% | -2.4% | -1.5% | -3.0% |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | | 7.8% | -23.2% | 10.6% | -36.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jingwei Textile Machinery ($350) | 38.3% | 49.1% | 51.7% | 54.9% | 65.5% |
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 45.5% | 59.7% | 58.3% | 48.6% | 26.7% |
| Renheng Enterprise Holdings Ltd ($3628) | 36.4% | 44.3% | 44.8% | 45.4% | |
| Haitian International Holdings Ltd ($1882) | 29.7% | 30.1% | 31.6% | 32.4% | 33.0% |
| CHTC Fong's Industries Co Ltd ($641) | 26.5% | 24.4% | 30.0% | 32.3% | 31.2% |
| |
|---|
| Median (23 companies) | 24.2% | 24.4% | 22.6% | 20.0% | 21.0% |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 12.0% | 11.1% | 8.4% | 14.8% | 6.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 31.1% | 46.8% | 48.7% | 46.6% | -134.1% |
| Jingwei Textile Machinery ($350) | 18.5% | 24.0% | 26.9% | 28.0% | 28.5% |
| Haitian International Holdings Ltd ($1882) | 20.5% | 19.7% | 20.7% | 21.9% | 22.8% |
| Renheng Enterprise Holdings Ltd ($3628) | 22.9% | 24.7% | 23.9% | 20.7% | |
| Good Friend International Holdings Inc ($2398) | 11.7% | 6.7% | 9.1% | 12.9% | |
| |
|---|
| Median (23 companies) | 9.6% | 8.7% | 8.7% | 8.5% | 5.7% |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 12.9% | 12.9% | 6.5% | 12.3% | 0.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China High Precision Automation Group Ltd ($591) | 33.0% | 20.5% | 9.1% | 18.4% | 0.6% |
| LK Technology Holdings Ltd ($558) | 7.6% | 9.3% | 10.2% | 9.1% | 5.6% |
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 1.3% | 2.3% | 10.1% | 7.8% | 31.9% |
| First Tractor Co Ltd ($38) | 6.3% | 4.9% | 4.3% | 7.3% | 4.3% |
| Greens Holdings Ltd ($1318) | 9.3% | 8.9% | 3.1% | 7.1% | |
| |
|---|
| Median (23 companies) | 5.3% | 4.2% | 3.6% | 4.2% | 2.4% |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 14.9% | 20.5% | 20.3% | 11.6% | 15.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | | 52.8% | 28.7% | 20.8% | -14.5% |
| Haitian International Holdings Ltd ($1882) | 26.8% | 19.8% | 21.2% | 19.4% | 16.3% |
| Jingwei Textile Machinery ($350) | 23.3% | 19.4% | 20.9% | 17.4% | 14.9% |
| Huazhang Technology Holding Ltd ($1673) | | 29.6% | 16.2% | 16.3% | 16.2% |
| Good Friend International Holdings Inc ($2398) | 20.0% | 6.5% | 8.7% | 12.1% | |
| |
|---|
| Median (23 companies) | 9.9% | 7.9% | 4.3% | 3.0% | 1.9% |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 4.5% | 3.8% | -1.8% | 1.3% | -5.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First Tractor Co Ltd ($38) | 1.1x | 0.5x | 2.5x | 9.2x | 6.3x |
| Shanghai Prime Machinery Co Ltd ($2345) | -0.0x | -0.6x | 0.3x | 6.0x | 3.2x |
| Honghua Group Ltd ($196) | 0.1x | 1.2x | 3.2x | 5.2x | 14.2x |
| LK Technology Holdings Ltd ($558) | 0.9x | 2.5x | 5.1x | 4.9x | 4.6x |
| CHTC Fong's Industries Co Ltd ($641) | 3.4x | | 2.2x | 2.5x | 3.5x |
| |
|---|
| Median (19 companies) | -0.5x | -1.1x | -1.0x | -0.6x | -0.4x |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 1.9x | 3.0x | 11.4x | 5.6x | 129.4x |
