China Tian Lun Gas Holdings Ltd revenue surged on 67.6% in 2015 while EBITDA Margin decreased on 3.8 pp from 33.2% to 29.4%

31/03/2016 • About China Tian Lun Gas Holdings Ltd ($1600) • By InTwits

China Tian Lun Gas Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• China Tian Lun Gas Holdings Ltd is a growth stock: 2015 revenue growth was 67.6%, 5 year revenue CAGR was 54.2% at 2015 ROIC 11.6%
• China Tian Lun Gas Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.7%. At the same time it's a lot of higher than industry average of 7.4%.
• CAPEX is quite volatile: 269 in 2015, 275 in 2014, 144 in 2013, 124 in 2012, 171 in 2011
• The company has business model with average profitability: ROIC is at 11.6%
• It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is -3.9x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

China Tian Lun Gas Holdings Ltd ($1600) key annual financial indicators

mln. CNY	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	451	716	912	1,344	2,252	67.6%
Gross Profit	172	251	333	461	609	31.9%
SG&A	48	62	72	89	133	48.5%
EBITDA	149	241	297	446	662	48.3%
Net Income	83	135	169	220	284	29.1%
Balance Sheet
Cash	311	369	576	264	609	131.2%
Short Term Debt	285	640	229	660	854	29.2%
Long Term Debt	186	166	781	723	1,887	161.2%
Cash flow
Capex	171	124	144	275	269	-2.1%
Ratios
Revenue growth	74.6%	58.9%	27.3%	47.4%	67.6%
EBITDA growth	35.5%	61.3%	23.7%	50.1%	48.3%
Gross Margin	38.1%	35.1%	36.5%	34.3%	27.0%	-7.3%
EBITDA Margin	33.1%	33.6%	32.6%	33.2%	29.4%	-3.8%
Net Income Margin	18.3%	18.9%	18.5%	16.4%	12.6%	-3.8%
SG&A, % of revenue	10.6%	8.7%	7.9%	6.6%	5.9%	-0.8%
CAPEX, % of revenue	38.0%	17.2%	15.8%	20.4%	11.9%	-8.5%
ROIC	13.5%	13.5%	12.8%	14.1%	11.6%	-2.5%
ROE	14.1%	19.8%	20.2%	21.3%	16.3%	-5.0%
Net Debt/EBITDA	1.1x	1.8x	1.5x	2.5x	3.2x	0.7x

Revenue and profitability

China Tian Lun Gas Holdings Ltd's Revenue jumped on 67.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 11.7% to 15.2% in 2015.

Gross Margin decreased on 7.3 pp from 34.3% to 27.0% in 2015. SG&A as a % of Revenue decreased slightly on 0.76 pp from 6.6% to 5.9% in 2015.

Net Income marign decreased on 3.8 pp from 16.4% to 12.6% in 2015.

Capital expenditures (CAPEX) and working capital investments

China Tian Lun Gas Holdings Ltd's CAPEX/Revenue was 11.9% in 2015. The company showed decline in CAPEX/Revenue of 5.3 pp from 17.2% in 2012 to 11.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 16.1%.

Return on investment

The company operates at good ROE (16.27%) while ROIC is low (11.63%). ROIC decreased on 2.5 pp from 14.1% to 11.6% in 2015. ROE decreased on 5.0 pp from 21.3% to 16.3% in 2015.

Leverage (Debt)

Debt level is 3.2x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 2.5x to 3.2x in 2015. Debt jumped on 98.2% in 2015 while cash surged on 131% in 2015.

Appendix 1: Peers in Pipelines

Below you can find China Tian Lun Gas Holdings Ltd benchmarking vs. other companies in Pipelines 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	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)		24.9%	-16.4%	8.2%	16.3%
Tianjin Jinran Public Utilities Co Ltd ($1265)		45.5%	-3.4%	-2.6%	-8.7%
Median (2 companies)		35.2%	-9.9%	2.8%	3.8%
China Tian Lun Gas Holdings Ltd ($1600)		58.9%	27.3%	47.4%	67.6%

Top companies by Gross margin, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)	26.9%	26.2%	19.6%	20.3%	22.8%
Tianjin Jinran Public Utilities Co Ltd ($1265)	13.1%	10.2%	7.1%	4.9%	2.0%
Median (2 companies)	20.0%	18.2%	13.3%	12.6%	12.4%
China Tian Lun Gas Holdings Ltd ($1600)	38.1%	35.1%	36.5%	34.3%	27.0%

Top companies by EBITDA margin, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)	12.4%	13.7%	7.2%	5.1%	10.9%
Tianjin Jinran Public Utilities Co Ltd ($1265)	15.3%	14.3%	11.3%	8.7%	5.3%
Median (2 companies)	13.9%	14.0%	9.3%	6.9%	8.1%
China Tian Lun Gas Holdings Ltd ($1600)	33.1%	33.6%	32.6%	33.2%	29.4%

Top companies by CAPEX/Revenue, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)	12.9%	13.9%	5.9%	8.4%	8.1%
Tianjin Jinran Public Utilities Co Ltd ($1265)	2.8%	0.9%	0.7%	1.1%	2.1%
Median (2 companies)	7.8%	7.4%	3.3%	4.7%	5.1%
China Tian Lun Gas Holdings Ltd ($1600)	38.0%	17.2%	15.8%	20.4%	11.9%

Top companies by ROIC, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)	5.6%	5.1%	0.1%	1.5%	4.4%
Tianjin Jinran Public Utilities Co Ltd ($1265)	10.5%	10.3%	6.1%	3.6%	0.8%
Median (2 companies)	8.1%	7.7%	3.1%	2.6%	2.6%
China Tian Lun Gas Holdings Ltd ($1600)	13.5%	13.5%	12.8%	14.1%	11.6%

Top companies by Net Debt / EBITDA

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Chinese People Holdings Co Ltd ($681)	-0.4x	-0.2x	-4.2x	-5.8x	-0.6x
Tianjin Jinran Public Utilities Co Ltd ($1265)	-1.7x	-1.7x	-1.7x	-0.7x	-14.2x
Median (2 companies)	-1.1x	-1.0x	-3.0x	-3.3x	-7.4x
China Tian Lun Gas Holdings Ltd ($1600)	1.1x	1.8x	1.5x	2.5x	3.2x

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