China Environmental Technology Holdings Ltd revenue started to decline in 2015: dropped 30.6% vs. 510% growth a year earliner
31/03/2016 • About China Environmental Technology Holdings Ltd (
$646) • By InTwits
China Environmental Technology Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Environmental Technology Holdings Ltd is a company in decline: 2015 revenue growth was -30.6%, 5 years revenue CAGR was -15.9%
- The company operates at negative EBITDA Margin: -86.6%
- China Environmental Technology Holdings Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -40.8%0
- China Environmental Technology Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.6%. At the same time it's in pair with industry average of 14.4%.
- CAPEX is quite volatile: 1.9 in 2015, 1.2 in 2014, 6.3 in 2013, 6.4 in 2012, 3.6 in 2011
- The company has unprofitable business model: ROIC is at -54.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Environmental Technology Holdings Ltd ($646) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 60.8 | 144.9 | 14.7 | 89.3 | 62.0 | -30.6% |
| Gross Profit | 13.6 | 26.6 | 2.5 | 22.8 | 20.3 | -10.9% |
| SG&A | | | 58.6 | 66.7 | 61.9 | -7.1% |
| EBITDA | -17.7 | -13.2 | -38.5 | -28.5 | -53.7 | 88.4% |
| Net Income | -43.7 | -55.2 | -64.6 | -75.3 | -74.1 | -1.6% |
Balance Sheet
|
|---|
| Cash | 105.0 | 38.6 | 42.5 | 7.9 | 25.2 | 219.3% |
| Short Term Debt | 22.2 | 12.8 | 39.4 | 16.2 | 73.7 | 356.2% |
| Long Term Debt | 23.3 | 48.7 | 118.1 | 68.7 | 19.3 | -71.9% |
Cash flow
|
|---|
| Capex | 3.6 | 6.4 | 6.3 | 1.2 | 1.9 | 48.8% |
Ratios
|
|---|
| Revenue growth | -58.7% | 138.4% | -89.9% | 509.7% | -30.6% | |
| EBITDA growth | -1,483.0% | -25.3% | 190.9% | -26.0% | 88.4% | |
| Gross Margin | 22.4% | 18.4% | 17.3% | 25.5% | 32.7% | 7.2% |
| EBITDA Margin | -29.2% | -9.1% | -262.8% | -31.9% | -86.6% | -54.7% |
| Net Income Margin | -71.9% | -38.1% | -440.7% | -84.3% | -119.5% | -35.2% |
| SG&A, % of revenue | | | 399.9% | 74.7% | 99.9% | 25.2% |
| CAPEX, % of revenue | 5.9% | 4.4% | 43.3% | 1.4% | 3.0% | 1.6% |
| ROIC | -7.9% | -7.0% | -16.2% | -20.1% | -54.2% | -34.1% |
| ROE | -18.0% | -20.6% | -34.6% | -87.8% | | 87.8% |
Revenue and profitability
China Environmental Technology Holdings Ltd's Revenue dropped on 30.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 38.0 pp from -70.9% to -33.0% in 2015.
Gross Margin increased on 7.2 pp from 25.5% to 32.7% in 2015. SG&A as a % of Revenue surged on 25.2 pp from 74.7% to 99.9% in 2015.
Net Income marign dropped on 35.2 pp from -84.3% to -120% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.0%. CAPEX/Revenue decreased slightly on 1.4 pp from 4.4% in 2012 to 3.0% in 2015. It's average CAPEX/Revenue for the last three years was 15.9%.
Leverage (Debt)
Debt level is -14.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt increased on 9.7% in 2015 while cash surged on 219% in 2015.
Appendix 1: Peers in Environmental Control
Below we provide China Environmental Technology Holdings Ltd benchmarking against other companies in Environmental Control 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 |
|---|
| Sky Forever Supply Chain Management Group Ltd ($8047) | | -73.4% | 446.4% | -62.3% | 12,494.5% |
| Pan Asia Environmental Protection Group Ltd ($556) | | -13.7% | 43.1% | -1.8% | 85.0% |
| CT Environmental Group Ltd ($1363) | | -18.7% | 23.1% | 112.9% | 75.4% |
| ELL Environmental Holdings Ltd ($1395) | | 5.3% | 38.8% | 30.9% | 70.8% |
| Ozner Water International Holding Ltd ($2014) | | 183.9% | 38.5% | 27.2% | 45.7% |
| |
|---|
| Median (24 companies) | | -0.2% | 18.9% | 20.7% | 4.0% |
|---|
| China Environmental Technology Holdings Ltd ($646) | | 138.4% | -89.9% | 509.7% | -30.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EverChina International Holdings Co Ltd ($202) | 40.2% | 51.8% | 53.4% | 95.3% | 95.4% |
| Ozner Water International Holding Ltd ($2014) | 56.7% | 64.5% | 67.8% | 65.4% | 58.9% |
| CT Environmental Group Ltd ($1363) | 57.7% | 65.8% | 63.1% | 56.4% | 49.9% |
| Kangda International Environmental Co Ltd ($6136) | 46.0% | 44.2% | 38.3% | 40.0% | 47.6% |
| China Water Affairs Group Ltd ($855) | 42.7% | 44.0% | 43.1% | 41.8% | 47.3% |
| |
|---|
| Median (23 companies) | 37.9% | 39.0% | 30.6% | 32.2% | 34.1% |
|---|
| China Environmental Technology Holdings Ltd ($646) | 22.4% | 18.4% | 17.3% | 25.5% | 32.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 52.2% | 63.6% | 62.8% | 58.7% | 64.6% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 55.9% | 57.5% | 56.6% | 57.8% | 57.9% |
| China Everbright International Ltd ($257) | 37.3% | 44.6% | 40.7% | 43.6% | 44.1% |
| China Water Affairs Group Ltd ($855) | 38.8% | 38.2% | 38.1% | 37.1% | 40.3% |
| Kangda International Environmental Co Ltd ($6136) | 37.9% | 37.1% | 33.6% | 32.4% | 36.6% |
| |
|---|
| Median (24 companies) | 21.7% | 17.9% | 11.7% | 5.1% | 16.2% |
|---|
| China Environmental Technology Holdings Ltd ($646) | -29.2% | -9.1% | -262.8% | -31.9% | -86.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chaoyue Group Ltd ($147) | 3.8% | | 18.1% | 9.2% | 100.9% |
| Ozner Water International Holding Ltd ($2014) | 179.8% | 94.9% | 102.2% | 148.5% | 90.9% |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 25.4% | 13.2% | 10.6% | 41.7% | 88.1% |
| Green Energy Group Ltd ($979) | 7.5% | 169.0% | 270.8% | 41.9% | 59.0% |
| CT Environmental Group Ltd ($1363) | 31.8% | 65.0% | 27.1% | 51.4% | 40.5% |
| |
|---|
| Median (23 companies) | 10.8% | 12.9% | 6.6% | 8.8% | 7.7% |
|---|
| China Environmental Technology Holdings Ltd ($646) | 5.9% | 4.4% | 43.3% | 1.4% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CT Environmental Group Ltd ($1363) | 34.4% | 25.9% | 20.5% | 20.8% | 20.1% |
| China Everbright International Ltd ($257) | 11.1% | 10.4% | 11.2% | 10.5% | 10.8% |
| Sound Global Ltd ($967) | 15.0% | 12.8% | 11.5% | 10.8% | 9.3% |
| Baguio Green Group Ltd ($1397) | | 20.1% | 29.2% | 9.6% | 9.0% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 7.4% | 7.1% | 6.8% | 7.8% | 8.8% |
| |
|---|
| Median (24 companies) | 5.3% | 3.9% | 6.8% | 4.9% | 5.2% |
|---|
| China Environmental Technology Holdings Ltd ($646) | -7.9% | -7.0% | -16.2% | -20.1% | -54.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kangda International Environmental Co Ltd ($6136) | 5.1x | 4.4x | 5.1x | 4.8x | 5.2x |
| China Water Affairs Group Ltd ($855) | 2.8x | 2.6x | 2.7x | 3.2x | 3.4x |
| Dynagreen Environmental Protection Group Co Ltd ($1330) | 0.4x | 3.2x | | | 3.2x |
| Sound Global Ltd ($967) | -0.7x | -0.1x | 0.3x | 1.9x | 2.8x |
| China Everbright International Ltd ($257) | 2.8x | 2.1x | 0.5x | 1.5x | 2.6x |
| |
|---|
| Median (16 companies) | 1.0x | 2.3x | 0.3x | 1.2x | 1.5x |
|---|
