Huazhong In-Vehicle Holdings Co Ltd reports 19.8% Net Income decline and 2.8% Revenue decline
31/03/2016 • About Huazhong In-Vehicle Holdings Co Ltd (
$6830) • By InTwits
Huazhong In-Vehicle Holdings Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Huazhong In-Vehicle Holdings Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's in pair with industry average of 11.4%.
- CAPEX is quite volatile: 16.1 in FY2015, 0.32 in FY2014, 0.39 in FY2013, 0.62 in FY2012, 0.69 in FY2011
- The company has business model with average profitability: ROIC is at 10.3%
- It operates with high leverage: Net Debt/EBITDA is 2.9x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Huazhong In-Vehicle Holdings Co Ltd ($6830) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,169 | 1,156 | 1,471 | 1,683 | 1,636 | -2.8% |
| Gross Profit | 293 | 242 | 347 | 404 | 396 | -2.0% |
| SG&A | | 228 | 242 | 254 | 271 | 7.0% |
| EBITDA | 146 | 63 | 167 | 215 | 206 | -4.4% |
| Net Income | 110 | 2 | 48 | 87 | 69 | -19.8% |
Balance Sheet
|
|---|
| Cash | 116 | 123 | 170 | 198 | 201 | 1.6% |
| Short Term Debt | 440 | 621 | 561 | 556 | 565 | 1.5% |
| Long Term Debt | 0 | 0 | 76 | 117 | 233 | 99.1% |
Cash flow
|
|---|
| Capex | 193 | 170 | 151 | 132 | 122 | -7.9% |
Ratios
|
|---|
| Revenue growth | 16.1% | -1.1% | 27.3% | 14.4% | -2.8% | |
| EBITDA growth | -15.1% | -56.6% | 163.4% | 29.0% | -4.4% | |
| Gross Margin | 25.1% | 20.9% | 23.6% | 24.0% | 24.2% | 0.2% |
| EBITDA Margin | 12.5% | 5.5% | 11.4% | 12.8% | 12.6% | -0.2% |
| Net Income Margin | 9.4% | 0.2% | 3.2% | 5.1% | 4.2% | -0.9% |
| SG&A, % of revenue | | 19.7% | 16.4% | 15.1% | 16.6% | 1.5% |
| CAPEX, % of revenue | 16.5% | 14.7% | 10.2% | 7.8% | 7.4% | -0.4% |
| ROIC | 13.4% | 2.4% | 9.2% | 12.5% | 10.3% | -2.2% |
| ROE | 43.4% | 0.6% | 11.4% | 18.3% | 12.8% | -5.5% |
| Net Debt/EBITDA | 2.2x | 7.9x | 2.8x | 2.2x | 2.9x | 0.7x |
Revenue and profitability
Huazhong In-Vehicle Holdings Co Ltd's Revenue decreased on 2.8% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.8 pp from 29.9% to 34.7% in FY2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 1.5 pp from 15.1% to 16.6% in 2015.
Net Income marign decreased slightly on 0.90 pp from 5.1% to 4.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Huazhong In-Vehicle Holdings Co Ltd had CAPEX/Revenue of 7.4%. The company's CAPEX/Revenue decreased on 7.3 pp from 14.7% in 2012 to 7.4% in 2015. It's average level of CAPEX/Revenue for the last three years was 8.5%.Battling declining revenue Huazhong In-Vehicle Holdings Co Ltd invested a large share of EBITDA (59.1%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at good ROE (12.80%) while ROIC is low (10.30%). ROIC decreased on 2.2 pp from 12.5% to 10.3% in 2015. ROE decreased on 5.5 pp from 18.3% to 12.8% in 2015.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 2.2x to 2.9x in 2015. Debt jumped on 18.4% in 2015 while cash increased slightly on 1.6% in 2015.
Appendix 1: Peers in Auto Parts&Equipment
Below you can find Huazhong In-Vehicle Holdings Co Ltd benchmarking vs. other companies in Auto Parts&Equipment 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 |
|---|
| China Vehicle Components Technology Holdings Ltd ($1269) | | -10.4% | 27.1% | 31.0% | 30.9% |
| Xinchen China Power Holdings Ltd ($1148) | | 11.5% | 0.5% | 2.6% | 23.3% |
| Minth Group Ltd ($425) | | 11.3% | 27.3% | 21.3% | 14.5% |
| Nexteer Automotive Group Ltd ($1316) | | -3.6% | 10.1% | 24.8% | 12.8% |
| Xinyi Glass Holdings Ltd ($868) | | 2.5% | 17.8% | 9.3% | 5.5% |
| |
|---|
| Median (15 companies) | -30.2% | -8.3% | 10.7% | 2.6% | 3.2% |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | | -1.1% | 27.3% | 14.4% | -2.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fuyao Glass Industry Group Co Ltd ($3606) | 36.2% | 37.4% | 41.0% | 41.5% | 41.5% |
| Minth Group Ltd ($425) | 35.0% | 33.1% | 33.0% | 31.2% | 31.7% |
| Xinyi Glass Holdings Ltd ($868) | 28.6% | 26.4% | 31.6% | 25.2% | 27.3% |
| Zhejiang Shibao Co Ltd ($1057) | 34.9% | 30.3% | 26.0% | 26.4% | 25.5% |
| Weichai Power Co Ltd ($2338) | 21.7% | 19.2% | 20.2% | 21.1% | 22.8% |
| |
|---|
| Median (16 companies) | 26.0% | 20.1% | 20.0% | 21.2% | 19.7% |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | 25.1% | 20.9% | 23.6% | 24.0% | 24.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fuyao Glass Industry Group Co Ltd ($3606) | 26.9% | 28.5% | 28.7% | 29.2% | 27.7% |
| Xinyi Glass Holdings Ltd ($868) | 23.5% | 22.5% | 43.8% | 20.0% | 25.0% |
| Minth Group Ltd ($425) | 25.9% | 25.6% | 24.2% | 23.1% | 24.5% |
| Xiezhong International Holdings Ltd ($3663) | 22.9% | 20.7% | 17.2% | 16.0% | 18.6% |
| Nexteer Automotive Group Ltd ($1316) | 5.9% | 6.7% | 10.4% | 12.0% | 13.7% |
| |
|---|
| Median (16 companies) | 16.0% | 9.4% | 11.9% | 11.5% | 11.4% |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | 12.5% | 5.5% | 11.4% | 12.8% | 12.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hybrid Kinetic Group Ltd ($1188) | 41.7% | 8.5% | | | 176.2% |
| Fuyao Glass Industry Group Co Ltd ($3606) | 11.5% | 14.6% | 16.5% | 21.1% | 23.9% |
| Xiezhong International Holdings Ltd ($3663) | 15.4% | 22.9% | 24.9% | 12.0% | 19.4% |
| Xinyi Glass Holdings Ltd ($868) | 37.3% | 17.0% | 28.9% | 15.8% | 16.7% |
| Minth Group Ltd ($425) | 12.3% | 14.8% | 16.1% | 18.7% | 15.4% |
| |
|---|
| Median (16 companies) | 11.4% | 8.5% | 6.2% | 5.4% | 6.8% |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | 16.5% | 14.7% | 10.2% | 7.8% | 7.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nexteer Automotive Group Ltd ($1316) | | 14.0% | 18.2% | 17.7% | 21.2% |
| Fuyao Glass Industry Group Co Ltd ($3606) | 19.1% | 19.0% | 21.1% | 22.3% | 15.7% |
| Minth Group Ltd ($425) | 13.1% | 11.9% | 12.1% | 11.8% | 13.4% |
| Xinyi Glass Holdings Ltd ($868) | 12.8% | 9.3% | 22.6% | 8.3% | 10.8% |
| Xinchen China Power Holdings Ltd ($1148) | 31.7% | 22.4% | 14.7% | 12.5% | 8.6% |
| |
|---|
| Median (16 companies) | 13.1% | 7.6% | 8.5% | 5.8% | 3.1% |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | 13.4% | 2.4% | 9.2% | 12.5% | 10.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Xiezhong International Holdings Ltd ($3663) | 0.7x | 0.6x | 1.2x | 1.2x | 2.2x |
| China Vehicle Components Technology Holdings Ltd ($1269) | 2.4x | 9.4x | 5.8x | 5.3x | 2.0x |
| Xinchen China Power Holdings Ltd ($1148) | -0.3x | -0.1x | -2.3x | 0.6x | 1.9x |
| Xinyi Glass Holdings Ltd ($868) | 2.0x | 1.9x | 0.9x | 2.4x | 1.7x |
| Weichai Power Co Ltd ($2338) | -0.2x | 0.7x | 0.6x | 1.1x | 0.6x |
| |
|---|
| Median (11 companies) | 0.8x | 0.6x | 0.9x | 1.0x | 0.5x |
|---|
| Huazhong In-Vehicle Holdings Co Ltd ($6830) | 2.2x | 7.9x | 2.8x | 2.2x | 2.9x |
