Beijing Enterprises Holdings Ltd reports 51.2% CAPEX growth and 25.5% Revenue growth
31/03/2016 • About Beijing Enterprises Holdings Ltd (
$392) • By InTwits
Beijing Enterprises Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Beijing Enterprises Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.9%. At the same time it's in pair with industry average of 11.7%.
- CAPEX is quite volatile: 4,051 in 2015, 2,680 in 2014, 6,411 in 2013, 8,128 in 2012, 4,306 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.9%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Beijing Enterprises Holdings Ltd ($392) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 30,472 | 35,570 | 42,361 | 47,936 | 60,150 | 25.5% |
| Gross Profit | 6,734 | 7,362 | 8,337 | 8,576 | 9,051 | 5.5% |
| SG&A | 4,642 | 5,440 | 5,957 | 6,004 | 6,512 | 8.5% |
| EBITDA | 4,789 | 4,691 | 5,768 | 5,581 | 5,803 | 4.0% |
| Net Income | 2,776 | 3,235 | 4,184 | 4,832 | 5,667 | 17.3% |
Balance Sheet
|
|---|
| Cash | 12,579 | 12,237 | 10,795 | 11,208 | 13,694 | 22.2% |
| Short Term Debt | 5,705 | 6,277 | 7,290 | 17,776 | 7,048 | -60.4% |
| Long Term Debt | 14,481 | 20,338 | 18,479 | 19,439 | 27,708 | 42.5% |
Cash flow
|
|---|
| Capex | 4,306 | 8,128 | 6,411 | 2,680 | 4,051 | 51.2% |
Ratios
|
|---|
| Revenue growth | 10.4% | 16.7% | 19.1% | 13.2% | 25.5% | |
| EBITDA growth | 13.6% | -2.0% | 23.0% | -3.2% | 4.0% | |
| Gross Margin | 22.1% | 20.7% | 19.7% | 17.9% | 15.0% | -2.8% |
| EBITDA Margin | 15.7% | 13.2% | 13.6% | 11.6% | 9.6% | -2.0% |
| Net Income Margin | 9.1% | 9.1% | 9.9% | 10.1% | 9.4% | -0.7% |
| SG&A, % of revenue | 15.2% | 15.3% | 14.1% | 12.5% | 10.8% | -1.7% |
| CAPEX, % of revenue | 14.1% | 22.9% | 15.1% | 5.6% | 6.7% | 1.1% |
| ROIC | 5.1% | 4.0% | 4.2% | 3.2% | 2.9% | -0.3% |
| ROE | 7.7% | 8.4% | 8.9% | 8.7% | 9.8% | 1.1% |
| Net Debt/EBITDA | 1.6x | 3.1x | 2.6x | 4.7x | 3.6x | -1.0x |
Revenue and profitability
The company's Revenue surged on 25.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 10.3% to 8.1% in 2015.
Gross Margin decreased on 2.8 pp from 17.9% to 15.0% in 2015. SG&A as a % of Revenue decreased slightly on 1.7 pp from 12.5% to 10.8% in 2015.
Net Income marign decreased slightly on 0.66 pp from 10.1% to 9.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Beijing Enterprises Holdings Ltd's CAPEX/Revenue was 6.7% in 2015. CAPEX/Revenue dropped on 16.1 pp from 22.9% in 2012 to 6.7% in 2015. It's average level of CAPEX/Revenue for the last three years was 9.2%.Beijing Enterprises Holdings Ltd invested a big chunk of EBITDA (69.8%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (2.91%) and ROE (9.83%). ROIC showed almost no change in 2015. ROE increased slightly on 1.1 pp from 8.7% to 9.8% in 2015.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and 6.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 4.7x to 3.6x in 2015. Debt decreased on 6.6% in 2015 while cash jumped on 22.2% in 2015.
Appendix 1: Peers in Gas
Below we provide Beijing Enterprises Holdings Ltd benchmarking against other companies in Gas 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 |
|---|
| China Gas Holdings Ltd ($384) | | 19.4% | -5.2% | 44.8% | 21.8% |
| ENN Energy Holdings Ltd ($2688) | | 19.6% | 27.4% | 26.7% | 10.2% |
| China Resources Gas Group Ltd ($1193) | | -4.1% | 63.6% | 28.8% | 8.3% |
| Suchuang Gas Corp Ltd ($1430) | | 10.3% | 26.9% | 18.4% | 1.3% |
| Binhai Investment Co Ltd ($2886) | | 35.0% | 34.2% | 14.1% | 0.5% |
| |
|---|
| Median (9 companies) | | 11.2% | 28.5% | 18.4% | 0.5% |
|---|
| Beijing Enterprises Holdings Ltd ($392) | | 16.7% | 19.1% | 13.2% | 25.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Resources Gas Group Ltd ($1193) | 29.3% | 31.2% | 34.2% | 30.3% | 31.5% |
| Suchuang Gas Corp Ltd ($1430) | 26.6% | 28.9% | 30.1% | 24.2% | 25.2% |
| ENN Energy Holdings Ltd ($2688) | 25.9% | 26.9% | 23.8% | 20.9% | 21.4% |
| Binhai Investment Co Ltd ($2886) | 13.6% | 20.1% | 20.6% | 18.3% | 21.3% |
| China Gas Holdings Ltd ($384) | 18.3% | 19.0% | 21.0% | 20.3% | 20.4% |
| |
|---|
| Median (7 companies) | 21.2% | 22.5% | 22.6% | 20.3% | 21.3% |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 22.1% | 20.7% | 19.7% | 17.9% | 15.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hong Kong & China Gas Co Ltd ($3) | 31.1% | 30.0% | 29.6% | 29.2% | 30.7% |
| Suchuang Gas Corp Ltd ($1430) | 28.4% | 30.2% | 30.5% | 24.9% | 24.0% |
| Binhai Investment Co Ltd ($2886) | 5.9% | 14.8% | 17.0% | 15.2% | 20.7% |
| Towngas China Co Ltd ($1083) | 19.3% | 19.9% | 18.9% | 18.8% | 19.2% |
| China Resources Gas Group Ltd ($1193) | 18.2% | 16.2% | 17.4% | 17.7% | 19.0% |
| |
|---|
| Median (10 companies) | 18.3% | 20.1% | 18.2% | 17.7% | 17.9% |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 15.7% | 13.2% | 13.6% | 11.6% | 9.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Towngas China Co Ltd ($1083) | 21.1% | 31.3% | 25.7% | 26.2% | 26.4% |
| Hong Kong & China Gas Co Ltd ($3) | 20.7% | 23.7% | 18.7% | 20.1% | 21.5% |
| Binhai Investment Co Ltd ($2886) | 23.6% | 26.9% | 18.0% | 15.5% | 16.7% |
| China Resources Gas Group Ltd ($1193) | 14.3% | 20.6% | 18.5% | 12.4% | 12.3% |
| China Gas Holdings Ltd ($384) | 12.2% | 9.4% | 13.7% | 12.3% | 12.3% |
| |
|---|
| Median (10 companies) | 17.7% | 18.3% | 16.4% | 12.4% | 11.7% |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 14.1% | 22.9% | 15.1% | 5.6% | 6.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Suchuang Gas Corp Ltd ($1430) | | 13.6% | 19.4% | 23.9% | 20.8% |
| Binhai Investment Co Ltd ($2886) | 7.6% | 12.2% | 12.2% | 10.9% | 14.7% |
| ENN Energy Holdings Ltd ($2688) | 13.1% | 14.3% | 11.7% | 16.4% | 13.6% |
| China Resources Gas Group Ltd ($1193) | 11.9% | 6.9% | 10.4% | 11.4% | 12.5% |
| China Gas Holdings Ltd ($384) | 6.8% | 8.4% | 8.6% | 10.6% | 10.6% |
| |
|---|
| Median (10 companies) | 8.0% | 8.0% | 11.0% | 9.1% | 8.8% |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 5.1% | 4.0% | 4.2% | 3.2% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Oil & Gas Group Ltd ($603) | -0.8x | -0.0x | 1.0x | 2.8x | 6.0x |
| Towngas China Co Ltd ($1083) | 3.6x | 3.5x | 3.7x | 4.1x | 4.5x |
| China Gas Holdings Ltd ($384) | 4.4x | 3.7x | 3.7x | 3.1x | 2.9x |
| Binhai Investment Co Ltd ($2886) | -0.4x | 3.4x | 2.8x | 3.5x | 2.8x |
| Hong Kong & China Gas Co Ltd ($3) | 2.2x | 2.6x | 2.8x | 2.1x | 2.3x |
| |
|---|
| Median (9 companies) | 1.7x | 2.9x | 1.9x | 2.4x | 2.3x |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 1.6x | 3.1x | 2.6x | 4.7x | 3.6x |
