Ding He Mining Holdings Ltd reports 33.9% revenue decline in 2015 and 68.2 pp EBITDA Margin decline from -110% to -178%
31/03/2016 • About Ding He Mining Holdings Ltd (
$705) • By InTwits
Ding He Mining Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ding He Mining Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is -33.1%
- The company operates at negative EBITDA Margin: -178.1%
- Ding He Mining 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 -1,023.3%0
- Ding He Mining Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 154.6%. At the same time it's a lot of higher than industry average of 64.8%.
- CAPEX is quite volatile: 0.086 in 2015, 6.3 in 2014, 0.67 in 2013, 6.9 in 2012, 79.0 in 2011
- The company has unprofitable business model: ROIC is at -33.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ding He Mining Holdings Ltd ($705) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11.185 | 14.531 | 20.901 | 39.678 | 26.246 | -33.9% |
| Gross Profit | -17.172 | -40.153 | -26.165 | -20.913 | -16.237 | -22.4% |
| SG&A | 37.682 | 40.823 | 42.581 | 45.022 | 43.277 | -3.9% |
| EBITDA | -132.709 | -585.852 | -342.690 | -43.618 | -46.756 | 7.2% |
| Net Income | -207.378 | -593.133 | -322.358 | -279.820 | -110.997 | -60.3% |
Balance Sheet
|
|---|
| Cash | 28.195 | 1.081 | 0.424 | 0.379 | 11.964 | 3,057.3% |
| Short Term Debt | 521.135 | 535.756 | 592.826 | 475.986 | 291.398 | -38.8% |
| Long Term Debt | 79.084 | 186.417 | 48.161 | 0.260 | 0.051 | -80.4% |
Cash flow
|
|---|
| Capex | 79.018 | 6.876 | 0.666 | 6.252 | 0.086 | -98.6% |
Ratios
|
|---|
| Revenue growth | 31.6% | 29.9% | 43.8% | 89.8% | -33.9% | |
| EBITDA growth | 239.2% | 341.5% | -41.5% | -87.3% | 7.2% | |
| Gross Margin | -153.5% | -276.3% | -125.2% | -52.7% | -61.9% | -9.2% |
| EBITDA Margin | -1,186.4% | -4,031.7% | -1,639.6% | -109.9% | -178.1% | -68.2% |
| Net Income Margin | -1,854.0% | -4,081.8% | -1,542.3% | -705.2% | -422.9% | 282.3% |
| SG&A, % of revenue | 336.9% | 280.9% | 203.7% | 113.5% | 164.9% | 51.4% |
| CAPEX, % of revenue | 706.4% | 47.3% | 3.2% | 15.8% | 0.3% | -15.4% |
| ROIC | -14.6% | -55.4% | -51.9% | -20.6% | -33.1% | -12.5% |
| ROE | -54.4% | -260.4% | | | | 0.0% |
Revenue and profitability
The company's Revenue dropped on 33.9% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 68.2 pp from -110% to -178% in 2015.
Gross Margin decreased on 9.2 pp from -52.7% to -61.9% in 2015. SG&A as a % of Revenue surged on 51.4 pp from 113% to 165% in 2015.
Net Income marign jumped on 282 pp from -705% to -423% in 2015.
Capital expenditures (CAPEX) and working capital investments
Ding He Mining Holdings Ltd's CAPEX/Revenue was 0.33% in 2015. Ding He Mining Holdings Ltd's CAPEX/Revenue dropped on 47.0 pp from 47.3% in 2012 to 0.33% in 2015. Average CAPEX/Revenue for the last three years was 6.4%.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt dropped on 38.8% in 2015 while cash jumped on 3,057% in 2015.
Appendix 1: Peers in Mining
Below you can find Ding He Mining Holdings Ltd benchmarking vs. other companies in Mining 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 |
|---|
| Mongolia Energy Corp Ltd ($276) | | | 89.7% | -95.8% | 2,361.6% |
| Real Gold Mining Ltd ($246) | | -44.0% | -68.0% | -26.2% | 106.2% |
| REX Global Entertainment Holdings Ltd ($164) | | -12.3% | 81.6% | -15.5% | 96.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Zijin Mining Group Co Ltd ($2899) | | 21.6% | 2.5% | 18.1% | 26.9% |
| |
|---|
| Median (48 companies) | 54.5% | 5.0% | 0.6% | -5.9% | -13.0% |
|---|
| Ding He Mining Holdings Ltd ($705) | | 29.9% | 43.8% | 89.8% | -33.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | -6.5% | 2.5% | 5.1% | 39.6% | 93.0% |
| REX Global Entertainment Holdings Ltd ($164) | 15.4% | -15.8% | -7.8% | -0.8% | 88.6% |
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | 79.7% |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| Timeless Software Ltd ($8028) | 19.2% | 17.7% | 48.5% | 29.4% | 42.1% |
| |
|---|
| Median (49 companies) | 19.2% | 14.4% | 13.8% | 15.4% | 14.3% |
|---|
| Ding He Mining Holdings Ltd ($705) | -153.5% | -276.3% | -125.2% | -52.7% | -61.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | 51.3% |
| Timeless Software Ltd ($8028) | -70.8% | -113.1% | 24.7% | -13.7% | 46.1% |
| Hengxing Gold Holding Co Ltd ($2303) | | | -766.2% | 24.5% | 43.9% |
| Sino Prosper Group Holdings Ltd ($766) | -127.2% | -138.6% | -138.2% | -378.4% | 42.9% |
| |
|---|
| Median (49 companies) | 6.3% | 4.9% | 7.9% | 5.2% | 5.1% |
|---|
| Ding He Mining Holdings Ltd ($705) | -1,186.4% | -4,031.7% | -1,639.6% | -109.9% | -178.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| Chinalco Mining Corp International ($3668) | | | | | 115.6% |
| China Dynamics Holdings Ltd ($476) | 1.6% | 1.8% | 0.0% | 1.0% | 113.8% |
| MMG Ltd ($1208) | 17.1% | 25.7% | 22.6% | 41.9% | 100.4% |
| |
|---|
| Median (49 companies) | 13.1% | 16.7% | 16.8% | 13.5% | 11.9% |
|---|
| Ding He Mining Holdings Ltd ($705) | 706.4% | 47.3% | 3.2% | 15.8% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CGN Mining Co Ltd ($1164) | -6.4% | 2.6% | 3.3% | 7.9% | 16.7% |
| United Co RUSAL PLC ($486) | 7.5% | 0.3% | -9.0% | 6.3% | 12.3% |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | 11.8% |
| Timeless Software Ltd ($8028) | -18.0% | -29.1% | 7.3% | -4.6% | 11.6% |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| |
|---|
| Median (50 companies) | 3.3% | 1.9% | 3.0% | 1.5% | -0.6% |
|---|
| Ding He Mining Holdings Ltd ($705) | -14.6% | -55.4% | -51.9% | -20.6% | -33.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | 31.5x |
| Chinalco Mining Corp International ($3668) | | | | | 25.0x |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| Kaz Minerals ($847) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
| Aluminum Corp of China Ltd ($2600) | 7.7x | 139.2x | 8.5x | | 18.0x |
| |
|---|
| Median (31 companies) | 1.4x | 2.0x | 1.9x | 4.4x | 3.4x |
|---|
