Sichuan Expressway Co Ltd reports 22.0% revenue growth in 2015 and 2.7 pp EBITDA Margin decline from 23.6% to 20.8%
30/03/2016 • About Sichuan Expressway Co Ltd (
$107) • By InTwits
Sichuan Expressway Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 20.8% in 2015 vs. 23.6% in 2014 vs. 31.7% in 2011
- Sichuan Expressway Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's a lot of higher than industry average of 13.7%.
- CAPEX is quite volatile: 2,164 in 2015, 1,739 in 2014, 707 in 2013, 1,176 in 2012, 1,053 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.5%
- It operates with high leverage: Net Debt/EBITDA is 5.5x while industry average is -19.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sichuan Expressway Co Ltd ($107) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,237 | 7,184 | 8,570 | 9,420 | 11,494 | 22.0% |
| Gross Profit | 1,729 | 1,638 | 1,789 | 1,865 | 1,998 | 7.1% |
| SG&A | 108 | 144 | 171 | 203 | 217 | 6.8% |
| EBITDA | 1,978 | 1,916 | 2,143 | 2,219 | 2,395 | 7.9% |
| Net Income | 1,304 | 1,181 | 1,015 | 976 | 1,007 | 3.1% |
Balance Sheet
|
|---|
| Cash | 1,632 | 1,747 | 1,641 | 3,567 | 2,798 | -21.6% |
| Short Term Debt | 2,100 | 766 | 1,204 | 2,000 | 1,275 | -36.3% |
| Long Term Debt | 3,121 | 6,086 | 8,686 | 11,014 | 14,808 | 34.4% |
Cash flow
|
|---|
| Capex | 131 | 91 | 62 | 67 | 125 | 87.0% |
Ratios
|
|---|
| Revenue growth | 44.9% | 15.2% | 19.3% | 9.9% | 22.0% | |
| EBITDA growth | 13.3% | -3.2% | 11.8% | 3.6% | 7.9% | |
| Gross Margin | 27.7% | 22.8% | 20.9% | 19.8% | 17.4% | -2.4% |
| EBITDA Margin | 31.7% | 26.7% | 25.0% | 23.6% | 20.8% | -2.7% |
| Net Income Margin | 20.9% | 16.4% | 11.8% | 10.4% | 8.8% | -1.6% |
| SG&A, % of revenue | 1.7% | 2.0% | 2.0% | 2.2% | 1.9% | -0.3% |
| CAPEX, % of revenue | 2.1% | 1.3% | 0.7% | 0.7% | 1.1% | 0.4% |
| ROIC | 12.4% | 9.3% | 8.3% | 7.1% | 6.5% | -0.6% |
| ROE | 14.8% | 12.1% | 9.6% | 8.6% | 8.3% | -0.3% |
| Net Debt/EBITDA | 1.8x | 2.7x | 3.8x | 4.3x | 5.5x | 1.3x |
Revenue and profitability
Sichuan Expressway Co Ltd's Revenue surged on 22.0% in 2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.7 pp from 23.6% to 20.8% in 2015.
Gross Margin decreased on 2.4 pp from 19.8% to 17.4% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 1.6 pp from 10.4% to 8.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
Sichuan Expressway Co Ltd's CAPEX/Revenue was 1.1% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 0.84%.
Return on investment
The company operates at low ROIC (6.51%) and ROE (8.29%). ROIC decreased slightly on 0.58 pp from 7.1% to 6.5% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 5.5x Net Debt / EBITDA and 6.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.3x from 4.3x to 5.5x in 2015. Debt jumped on 23.6% in 2015 while cash dropped on 21.6% in 2015.
Appendix 1: Peers in Commercial Services
Below you can find Sichuan Expressway Co Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | | 99.1% | 14.9% | -88.3% | 271.8% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Celebrate International Holdings Ltd ($8212) | | -90.1% | 1,437.6% | -6.3% | 117.0% |
| Haier Healthwise Holdings Ltd ($348) | | -22.0% | -50.1% | -7.5% | 101.1% |
| CAR Inc ($699) | | 96.4% | 68.0% | 30.3% | 42.1% |
| |
|---|
| Median (60 companies) | -0.2% | 7.1% | 6.7% | 9.9% | 4.0% |
|---|
| Sichuan Expressway Co Ltd ($107) | | 15.2% | 19.3% | 9.9% | 22.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | 89.6% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | 77.6% |
| Nirvana Asia Ltd ($1438) | 65.6% | 68.3% | 69.6% | 70.5% | 75.7% |
| U Banquet Group Holding Ltd ($8107) | | | | 76.5% | 74.5% |
| |
|---|
| Median (55 companies) | 33.8% | 31.9% | 31.0% | 31.1% | 32.3% |
|---|
| Sichuan Expressway Co Ltd ($107) | 27.7% | 22.8% | 20.9% | 19.8% | 17.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | | 61.6% | 84.9% | 75.9% | 80.9% |
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | 73.6% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | 71.6% |
| CAR Inc ($699) | 31.6% | 43.6% | 30.1% | 43.1% | 67.4% |
| Jiangsu Expressway Co Ltd ($177) | 60.8% | 57.0% | 60.7% | 59.3% | 61.5% |
| |
|---|
| Median (60 companies) | 16.8% | 16.8% | 14.2% | 11.1% | 11.6% |
|---|
| Sichuan Expressway Co Ltd ($107) | 31.7% | 26.7% | 25.0% | 23.6% | 20.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 11.5% | 21.3% | 9.0% | 13.9% | 47.4% |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | 45.8% |
| Shenzhen International Holdings Ltd ($152) | 28.3% | 23.0% | 22.1% | 20.9% | 35.0% |
| Celebrate International Holdings Ltd ($8212) | 140.9% | 211.7% | 12.0% | 6.2% | 34.2% |
| China Maple Leaf Educational Systems Ltd ($1317) | 39.5% | 25.7% | 50.9% | 21.1% | 32.8% |
| |
|---|
| Median (60 companies) | 3.7% | 3.1% | 4.0% | 3.6% | 3.4% |
|---|
| Sichuan Expressway Co Ltd ($107) | 2.1% | 1.3% | 0.7% | 0.7% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| 1010 Printing Group Ltd ($1127) | 14.4% | 13.5% | 20.8% | 17.8% | 19.9% |
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | 19.8% |
| CAR Inc ($699) | | 5.2% | 2.7% | 12.2% | 19.0% |
| eprint Group Ltd ($1884) | | 33.0% | 34.8% | 15.4% | 18.5% |
| |
|---|
| Median (60 companies) | 5.0% | 6.2% | 5.7% | 5.5% | 3.5% |
|---|
| Sichuan Expressway Co Ltd ($107) | 12.4% | 9.3% | 8.3% | 7.1% | 6.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | | 22.2x |
| Kai Yuan Holdings Ltd ($1215) | -15.6x | -143.8x | -0.7x | | 18.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | 6.2x |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | 5.3x |
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | 4.1x |
| |
|---|
| Median (40 companies) | -0.1x | -0.1x | -0.8x | -1.0x | -0.5x |
|---|
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | 5.5x |
