China Oriental Group Co Ltd Debt dropped on 43.6% in 2015 and Net Debt / EBITDA dropped on 1.2x from 4.5x to 3.3x
31/03/2016 • About China Oriental Group Co Ltd (
$581) • By InTwits
China Oriental Group Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Oriental Group Co Ltd is a company in decline: 2015 revenue growth was -26.1%, 5 years revenue CAGR was -6.9%
- China Oriental Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 45.0%.
- CAPEX is quite volatile: 120 in 2015, 370 in 2014, 567 in 2013, 474 in 2012, 985 in 2011
- The company has unprofitable business model: ROIC is at -2.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Oriental Group Co Ltd ($581) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 38,597 | 36,122 | 32,517 | 28,495 | 21,072 | -26.1% |
| Gross Profit | 2,602 | 1,164 | 1,004 | 1,368 | 357 | -73.9% |
| SG&A | 489 | 623 | 737 | 533 | 522 | -2.0% |
| EBITDA | 2,930 | 1,639 | 1,278 | 1,626 | 688 | -57.7% |
| Net Income | 1,242 | 126 | 102 | 67 | -767 | -1,248.9% |
Balance Sheet
|
|---|
| Cash | 965 | 879 | 968 | 849 | 2,338 | 175.3% |
| Short Term Debt | 2,376 | 3,969 | 3,435 | 6,659 | 2,707 | -59.3% |
| Long Term Debt | 5,476 | 4,501 | 4,284 | 1,511 | 1,899 | 25.7% |
Cash flow
|
|---|
| Capex | 985 | 474 | 567 | 370 | 120 | -67.5% |
Ratios
|
|---|
| Revenue growth | 28.1% | -6.4% | -10.0% | -12.4% | -26.1% | |
| EBITDA growth | 10.1% | -44.1% | -22.0% | 27.2% | -57.7% | |
| Gross Margin | 6.7% | 3.2% | 3.1% | 4.8% | 1.7% | -3.1% |
| EBITDA Margin | 7.6% | 4.5% | 3.9% | 5.7% | 3.3% | -2.4% |
| Net Income Margin | 3.2% | 0.3% | 0.3% | 0.2% | -3.6% | -3.9% |
| SG&A, % of revenue | 1.3% | 1.7% | 2.3% | 1.9% | 2.5% | 0.6% |
| CAPEX, % of revenue | 2.6% | 1.3% | 1.7% | 1.3% | 0.6% | -0.7% |
| ROIC | 12.3% | 3.9% | 1.3% | 3.0% | -2.6% | -5.7% |
| ROE | 14.7% | 1.4% | 1.1% | 0.7% | -8.6% | -9.3% |
| Net Debt/EBITDA | 2.4x | 4.6x | 5.3x | 4.5x | 3.3x | -1.2x |
Revenue and profitability
China Oriental Group Co Ltd's Revenue dropped on 26.1% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 5.7% to 3.3% in 2015.
Gross Margin decreased on 3.1 pp from 4.8% to 1.7% in 2015. SG&A as a % of Revenue increased slightly on 0.61 pp from 1.9% to 2.5% in 2015.
Net Income marign decreased on 3.9 pp from 0.23% to -3.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Oriental Group Co Ltd had CAPEX/Revenue of 0.57%. China Oriental Group Co Ltd's CAPEX/Revenue decreased slightly on 0.74 pp from 1.3% in 2012 to 0.57% in 2015. For the last three years the average CAPEX/Revenue was 1.2%.
Return on investment
The company operates at negative ROIC (-2.64%) and ROE (-8.63%). ROIC decreased on 5.7 pp from 3.0% to -2.6% in 2015. ROE decreased on 9.3 pp from 0.72% to -8.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is 6.7x. Net Debt / EBITDA dropped on 1.2x from 4.5x to 3.3x in 2015. Debt dropped on 43.6% in 2015 while cash surged on 175% in 2015.
Appendix 1: Peers in Iron/Steel
Below you can find China Oriental Group Co Ltd benchmarking vs. other companies in Iron/Steel 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 |
|---|
| CAA Resources Ltd ($2112) | | 99.6% | 103.2% | 38.0% | 261.2% |
| Newton Resources Ltd ($1231) | | | | -41.6% | 170.9% |
| Fosun International Ltd ($656) | | -8.9% | -1.4% | 21.0% | 27.6% |
| Wanguo International Mining Group Ltd ($3939) | | -1.0% | -11.0% | -16.2% | 0.7% |
| Da Ming International Holdings Ltd ($1090) | | -2.1% | 29.3% | 29.8% | -8.1% |
| |
|---|
| Median (19 companies) | | -9.7% | 0.6% | -1.7% | -20.4% |
|---|
| China Oriental Group Co Ltd ($581) | | -6.4% | -10.0% | -12.4% | -26.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 63.3% | | -223.7% | 15.7% | 37.5% |
| Wanguo International Mining Group Ltd ($3939) | 51.1% | 47.4% | 50.7% | 39.6% | 29.2% |
| China Metal International Holdings Inc ($319) | 21.0% | 20.9% | 24.3% | 24.8% | 25.5% |
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | 23.8% |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | 22.4% |
| |
|---|
| Median (19 companies) | 21.0% | 17.8% | 20.3% | 12.9% | 11.4% |
|---|
| China Oriental Group Co Ltd ($581) | 6.7% | 3.2% | 3.1% | 4.8% | 1.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 46.5% | 39.7% | 36.2% | 31.3% | 26.7% |
| Fosun International Ltd ($656) | 15.8% | 16.7% | 23.0% | 20.9% | 22.2% |
| China Metal International Holdings Inc ($319) | 17.8% | 19.7% | 21.3% | 21.0% | 22.0% |
| Xingda International Holdings Ltd ($1899) | 21.6% | 17.3% | 22.2% | 19.1% | 13.6% |
| Tiangong International Co Ltd ($826) | 22.5% | 25.1% | 25.8% | 19.3% | 11.6% |
| |
|---|
| Median (19 companies) | 15.7% | 16.4% | 21.3% | 8.1% | 1.9% |
|---|
| China Oriental Group Co Ltd ($581) | 7.6% | 4.5% | 3.9% | 5.7% | 3.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 690.4% | | 926.9% | 1,395.7% | 197.0% |
| Vale SA ($6210) | 25.8% | 34.0% | 28.1% | 29.8% | 34.5% |
| China Hanking Holdings Ltd ($3788) | 24.5% | 38.0% | 35.7% | 20.2% | 30.5% |
| Pan Asia Mining Ltd ($8173) | 0.4% | 1.5% | 0.4% | 2.4% | 24.4% |
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | 14.2% | 8.9% | 10.5% | 20.4% | 24.1% |
| |
|---|
| Median (19 companies) | 10.8% | 9.0% | 10.9% | 8.1% | 8.8% |
|---|
| China Oriental Group Co Ltd ($581) | 2.6% | 1.3% | 1.7% | 1.3% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Metal International Holdings Inc ($319) | 11.5% | 11.0% | 12.0% | 12.7% | 11.4% |
| Wanguo International Mining Group Ltd ($3939) | 74.9% | 38.4% | 24.4% | 15.0% | 11.1% |
| Golik Holdings Ltd ($1118) | 9.0% | 7.0% | 7.4% | 10.0% | 10.8% |
| CAA Resources Ltd ($2112) | 33.0% | 69.2% | 33.5% | 2.2% | 6.9% |
| Fosun International Ltd ($656) | 6.7% | 6.1% | 7.9% | 6.8% | 6.9% |
| |
|---|
| Median (19 companies) | 10.5% | 6.7% | 7.9% | 5.0% | -3.9% |
|---|
| China Oriental Group Co Ltd ($581) | 12.3% | 3.9% | 1.3% | 3.0% | -2.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fosun International Ltd ($656) | 4.6x | 4.4x | 4.8x | 5.5x | 4.4x |
| Maanshan Iron & Steel Co Ltd ($323) | 5.0x | 55.2x | 7.3x | 5.3x | |
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | 27.3x |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x |
| Da Ming International Holdings Ltd ($1090) | 8.0x | 8.4x | 8.5x | 4.0x | |
| |
|---|
| Median (13 companies) | 1.3x | 2.1x | 2.5x | 2.9x | 1.5x |
|---|
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | 3.3x |
