China Communications Services Corp Ltd revenue surged on 10.6% in 2015 and EBITDA Margin showed almost no change
31/03/2016 • About China Communications Services Corp Ltd (
$552) • By InTwits
China Communications Services Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Communications Services Corp Ltd is a growth stock: 2015 revenue growth was 10.6%, 5 year revenue CAGR was 12.3% at 2015 ROIC 10.5%
- EBITDA Margin is relatively stable: 4.3% in 2015 vs. 4.5% in 2014 vs. 6.2% in 2011
- China Communications Services Corp Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 6.1%.
- CAPEX is quite volatile: 1,594 in 2015, 1,879 in 2014, 3,298 in 2013, 4,912 in 2012, 6,063 in 2011
- The company has business model with average profitability: ROIC is at 10.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Communications Services Corp Ltd ($552) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 53,780 | 61,517 | 68,459 | 73,176 | 80,960 | 10.6% |
| Gross Profit | 8,581 | 9,785 | 10,378 | 10,682 | 11,388 | 6.6% |
| SG&A | 6,465 | 7,515 | 8,288 | 8,777 | 9,306 | 6.0% |
| EBITDA | 3,340 | 3,644 | 3,468 | 3,325 | 3,506 | 5.4% |
| Net Income | 2,129 | 2,407 | 2,238 | 2,150 | 2,334 | 8.6% |
Balance Sheet
|
|---|
| Cash | 7,380 | 8,879 | 6,760 | 7,314 | 9,536 | 30.4% |
| Short Term Debt | 998 | 410 | 54 | 247 | 177 | -28.3% |
| Long Term Debt | 131 | 90 | 52 | 39 | 34 | -11.0% |
Cash flow
|
|---|
| Capex | 1,184 | 973 | 809 | 795 | 812 | 2.2% |
Ratios
|
|---|
| Revenue growth | 18.4% | 14.4% | 11.3% | 6.9% | 10.6% | |
| EBITDA growth | 16.9% | 9.1% | -4.8% | -4.1% | 5.4% | |
| Gross Margin | 16.0% | 15.9% | 15.2% | 14.6% | 14.1% | -0.5% |
| EBITDA Margin | 6.2% | 5.9% | 5.1% | 4.5% | 4.3% | -0.2% |
| Net Income Margin | 4.0% | 3.9% | 3.3% | 2.9% | 2.9% | -0.1% |
| SG&A, % of revenue | 12.0% | 12.2% | 12.1% | 12.0% | 11.5% | -0.5% |
| CAPEX, % of revenue | 2.2% | 1.6% | 1.2% | 1.1% | 1.0% | -0.1% |
| ROIC | 14.8% | 14.3% | 11.9% | 10.5% | 10.5% | -0.1% |
| ROE | 13.8% | 13.1% | 10.6% | 9.6% | 9.8% | 0.2% |
| Net Debt/EBITDA | -1.9x | -2.3x | -1.9x | -2.1x | -2.7x | -0.5x |
Revenue and profitability
China Communications Services Corp Ltd's Revenue jumped on 10.6% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin decreased slightly on 0.53 pp from 14.6% to 14.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Communications Services Corp Ltd had CAPEX/Revenue of 1.0%. The company showed small CAPEX/Revenue decline of 0.58 pp from 1.6% in 2012 to 1.0% in 2015. It's average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at low ROIC (10.46%) and ROE (9.77%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.7x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 0.5x from -2.1x to -2.7x in 2015. Debt dropped on 25.9% in 2015 while cash jumped on 30.4% in 2015.
Appendix 1: Peers in Telecommunications
Below we provide China Communications Services Corp Ltd benchmarking against other companies in Telecommunications 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 |
|---|
| Hong Kong Television Network Ltd ($1137) | | | 107.4% | -82.2% | 8,010.0% |
| Hanny Holdings Ltd ($275) | | 236.4% | 131.2% | -85.2% | 349.3% |
| CCT Fortis Holdings Ltd ($138) | | -24.1% | -55.3% | -71.3% | 207.1% |
| Xi'an Haitian Antenna Technologies Co Ltd ($8227) | | -8.5% | -45.9% | -56.2% | 111.6% |
| China Trends Holdings Ltd ($8171) | | 167.0% | -70.2% | -16.7% | 106.0% |
| |
|---|
| Median (53 companies) | 118.6% | 8.9% | 8.3% | 8.4% | 3.5% |
|---|
| China Communications Services Corp Ltd ($552) | | 14.4% | 11.3% | 6.9% | 10.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HKBN Ltd ($1310) | | | 84.3% | 86.5% | 86.9% |
| Netel Technology Holdings Ltd ($8256) | 40.8% | 27.9% | 42.1% | 54.9% | 72.3% |
| Great World Co Holdings Ltd ($8003) | 34.2% | -11.0% | 43.0% | 45.5% | 67.9% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | 61.0% |
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% |
| |
|---|
| Median (47 companies) | 28.1% | 23.8% | 24.5% | 26.6% | 22.7% |
|---|
| China Communications Services Corp Ltd ($552) | 16.0% | 15.9% | 15.2% | 14.6% | 14.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | 82.4% |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | 78.8% |
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
| HKBN Ltd ($1310) | | | 39.2% | 40.1% | 39.0% |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | 36.0% |
| |
|---|
| Median (53 companies) | 12.0% | 9.9% | 7.1% | 7.7% | 9.4% |
|---|
| China Communications Services Corp Ltd ($552) | 6.2% | 5.9% | 5.1% | 4.5% | 4.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | 115.8% |
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | 79.4% |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | 52.8% |
| China Unicom Hong Kong Ltd ($762) | 37.2% | 34.9% | 24.7% | 24.4% | 31.9% |
| China Fiber Optic Network System Group Ltd ($3777) | 24.5% | 4.8% | 16.3% | 13.1% | 31.9% |
| |
|---|
| Median (53 companies) | 3.0% | 2.5% | 3.3% | 3.6% | 3.0% |
|---|
| China Communications Services Corp Ltd ($552) | 2.2% | 1.6% | 1.2% | 1.1% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Coolpad Group Ltd ($2369) | 7.2% | 8.1% | 6.0% | 9.6% | 29.1% |
| SmarTone Telecommunications Holdings Ltd ($315) | 30.2% | 37.2% | 23.1% | 12.8% | 17.7% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | 13.4% |
| |
|---|
| Median (54 companies) | 7.1% | 6.6% | 5.9% | 6.2% | 5.4% |
|---|
| China Communications Services Corp Ltd ($552) | 14.8% | 14.3% | 11.9% | 10.5% | 10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | 44.8x |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | 31.7x |
| China Ground Source Energy Industry Group Ltd ($8128) | -0.6x | -1.6x | 3.5x | 14.3x | 11.3x |
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | 7.6x |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | 5.6x |
| |
|---|
| Median (39 companies) | -0.2x | -0.1x | 0.8x | 0.9x | 0.6x |
|---|
| China Communications Services Corp Ltd ($552) | -1.9x | -2.3x | -1.9x | -2.1x | -2.7x |
