Chongqing Iron & Steel Co Ltd reports 31.8% revenue decline in 2015 and 76.5 pp EBITDA Margin decline from -4.5% to -81.0%
31/03/2016 • About Chongqing Iron & Steel Co Ltd (
$1053) • By InTwits
Chongqing Iron & Steel Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Chongqing Iron & Steel Co Ltd is a company in decline: 2015 revenue growth was -31.8%, 5 years revenue CAGR was -12.9%
- The company operates at negative EBITDA Margin: -81.0%
- Chongqing Iron & Steel Co 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 -12.9%0
- Chongqing Iron & Steel Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's in pair with industry average of 5.8%.
- CAPEX is quite volatile: 262 in 2015, 2,553 in 2014, 2,108 in 2013, 2,314 in 2012, 2,541 in 2011
- The company has unprofitable business model: ROIC is at -28.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Chongqing Iron & Steel Co Ltd ($1053) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 23,506 | 18,447 | 17,556 | 12,242 | 8,349 | -31.8% |
| Gross Profit | 934 | 44 | -328 | -431 | -2,160 | 401.1% |
| SG&A | 1,197 | 1,074 | 1,203 | 976 | 1,453 | 48.9% |
| EBITDA | -758 | -1,015 | -1,214 | -554 | -6,765 | 1,120.8% |
| Net Income | -1,471 | 99 | -2,499 | 51 | -5,987 | -11,741.3% |
Balance Sheet
|
|---|
| Cash | 1,301 | 3,395 | 519 | 1,247 | 32 | -97.4% |
| Short Term Debt | 9,365 | 10,344 | 9,644 | 11,867 | 8,952 | -24.6% |
| Long Term Debt | 3,023 | 2,771 | 9,326 | 10,132 | 11,838 | 16.8% |
Cash flow
|
|---|
| Capex | 2,541 | 2,314 | 2,108 | 2,553 | 262 | -89.7% |
Ratios
|
|---|
| Revenue growth | 41.1% | -21.5% | -4.8% | -30.3% | -31.8% | |
| EBITDA growth | -222.5% | 33.9% | 19.6% | -54.3% | 1,120.8% | |
| Gross Margin | 4.0% | 0.2% | -1.9% | -3.5% | -25.9% | -22.4% |
| EBITDA Margin | -3.2% | -5.5% | -6.9% | -4.5% | -81.0% | -76.5% |
| Net Income Margin | -6.3% | 0.5% | -14.2% | 0.4% | -71.7% | -72.1% |
| SG&A, % of revenue | 5.1% | 5.8% | 6.9% | 8.0% | 17.4% | 9.4% |
| CAPEX, % of revenue | 10.8% | 12.5% | 12.0% | 20.9% | 3.1% | -17.7% |
| ROIC | -7.0% | -8.1% | -7.1% | -5.2% | -28.1% | -22.9% |
| ROE | -30.4% | 2.4% | -35.5% | 0.5% | -85.8% | -86.3% |
Revenue and profitability
Chongqing Iron & Steel Co Ltd's Revenue dropped on 31.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 76.5 pp from -4.5% to -81.0% in 2015.
Gross Margin dropped on 22.4 pp from -3.5% to -25.9% in 2015. SG&A as a % of Revenue increased on 9.4 pp from 8.0% to 17.4% in 2015.
Net Income marign dropped on 72.1 pp from 0.42% to -71.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 3.1%. The company showed decline in CAPEX/Revenue of 9.4 pp from 12.5% in 2012 to 3.1% in 2015. It's average CAPEX/Revenue for the last three years was 12.0%.
Return on investment
The company operates at negative ROIC (-28.10%) and ROE (-85.76%). ROIC dropped on 22.9 pp from -5.2% to -28.1% in 2015. ROE dropped on 86.3 pp from 0.52% to -85.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt decreased on 5.5% in 2015 while cash dropped on 97.4% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Chongqing Iron & Steel Co Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| 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) | | -7.7% | 0.6% | -1.7% | -20.4% |
|---|
| Chongqing Iron & Steel Co Ltd ($1053) | | -21.5% | -4.8% | -30.3% | -31.8% |
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% |
|---|
| Chongqing Iron & Steel Co Ltd ($1053) | 4.0% | 0.2% | -1.9% | -3.5% | -25.9% |
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% | 2.1% |
|---|
| Chongqing Iron & Steel Co Ltd ($1053) | -3.2% | -5.5% | -6.9% | -4.5% | -81.0% |
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) | 7.3% | 8.3% | 10.5% | 6.4% | 8.8% |
|---|
| Chongqing Iron & Steel Co Ltd ($1053) | 10.8% | 12.5% | 12.0% | 20.9% | 3.1% |
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) | 11.5% | 6.7% | 7.9% | 5.0% | -3.0% |
|---|
| Chongqing Iron & Steel Co Ltd ($1053) | -7.0% | -8.1% | -7.1% | -5.2% | -28.1% |
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 |
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | 3.3x |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x |
| |
|---|
| Median (14 companies) | 1.7x | 2.2x | 2.8x | 3.0x | 2.1x |
|---|
