Looking for growth stocks? Pay attention to Great Wall Motor Co Ltd
31/03/2016 • About Great Wall Motor Co Ltd (
$2333) • By InTwits
Pay attention to Great Wall Motor Co Ltd as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Great Wall Motor Co Ltd showed fast growth in the last financial year. Great Wall Motor Co Ltd's revenue surged on 21.3% in FY2015. The growth also happened in EBITDA of 4.98% for the same period.
In the last 3 years the company showed fast revenue growth of 20.7% from 2012 to 2015 annualy. EBITDA surged on 14.7% from 2012 to 2015 annualy.
Great Wall Motor Co Ltd ($2333) financials for the last 5 years
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 29,037 | 41,565 | 54,727 | 60,317 | 73,147 |
|---|
| Revenue growth, % | | 43.1% | 31.7% | 10.2% | 21.3% |
|---|
| Gross margin, % | 22.2% | 24.1% | 25.9% | 25.0% | 22.3% |
|---|
| SG&A, % | 6.16% | 5.69% | 5.23% | 5.23% | 5.45% |
|---|
| EBITDA | 4,666 | 7,488 | 10,690 | 10,766 | 11,303 |
|---|
| EBITDA growth, % | | 60.5% | 42.8% | 0.7% | 5.0% |
|---|
| EBITDA margin, % | 16.1% | 18.0% | 19.5% | 17.8% | 15.5% |
|---|
| Net Income | 3,426 | 5,692 | 8,224 | 8,042 | 8,059 |
|---|
| Net Income margin, % | 11.8% | 13.7% | 15.0% | 13.3% | 11.0% |
|---|
| |
| CAPEX | 3,759 | 4,445 | 7,133 | 7,229 | 5,857 |
|---|
| CAPEX/Revenue, % | 12.9% | 10.7% | 13.0% | 12.0% | 8.01% |
|---|
| Debt | 4,004 | 4,393 | 4,791 | 4,214 | 5,914 |
|---|
| Cash | 6,306 | 5,596 | 5,523 | 3,082 | 2,458 |
|---|
| Net Debt/EBITDA | -0.5x | -0.2x | -0.1x | 0.1x | 0.3x |
|---|
| |
| ROIC, % | 22.9% | 27.7% | 32.2% | 25.5% | 22.5% |
|---|
| ROE, % | 25.6% | 29.8% | 33.2% | 26.2% | 22.5% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 17.8% in FY2014 to 15.5% in FY2015. In the longer period the company showed big decline in EBITDA margin of 2.50 pp from 18% in 2012 to 15.5% in 2015.
We call Great Wall Motor Co Ltd an attractive growth stock as together with the growth it delivers high ROIC at 22.5%. During the last three years it dropped - it was 27.7% in FY2012. Average ROIC for the last three years was 26.8%.
The company showed big decline in Net Income margin of 2.30 pp from 13.3% to 11% in 2015. In the longer period Great Wall Motor Co Ltd's Net Income margin dropped on 2.70 pp from 13.7% in 2012 to 11% in 2015.
Great Wall Motor Co Ltd operates at ROE of 22.5%. It's average ROE for the last three years was 27.3%.
Capital expenditures (CAPEX)
To this fast growth Great Wall Motor Co Ltd had to invest in CAPEX.The company's CAPEX/Revenue was 8.01% in FY2015. The company's CAPEX/Revenue dropped on 2.69 pp from 10.7% in 2012 to 8.01% in 2015. It's average CAPEX/Revenue for the last three years was 11.0%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.3x Net Debt/EBITDA. If we look for the longer period leverage surged on 0.47x from -0.16x in 2012 to 0.31x in 2015.
Peers in Auto Manufacturers
Below we provide Great Wall Motor Co Ltd benchmarking against other companies in Auto Manufacturers 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Dongfeng Motor Group Co Ltd ($489) | 7.4% | -95.4% | 511.9% | 123.0% | |
| Guangzhou Automobile Group Co Ltd ($2238) | 25.6% | 18.0% | 45.2% | 18.9% | |
| Dah Chong Hong Holdings Ltd ($1828) | | 4.1% | -12.0% | 10.0% | -3.6% |
| Sinotruk Hong Kong Ltd ($3808) | -7.7% | -23.8% | 9.0% | 7.9% | |
| Byd Co Ltd ($1211) | -3.1% | -4.2% | 16.4% | 7.2% | |
| |
|---|
| Median (9 companies) | 2.2% | -4.2% | 9.0% | 7.2% | -3.6% |
|---|
| Great Wall Motor Co Ltd ($2333) | | 43.1% | 31.7% | 10.2% | 21.3% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Geely Automobile Holdings Ltd ($175) | 18.2% | 18.5% | 20.1% | 18.2% | 18.2% |
| Sinotruk Hong Kong Ltd ($3808) | 15.6% | 14.9% | 16.7% | 16.9% | |
| Qingling Motors Co Ltd ($1122) | 12.4% | 12.3% | 15.2% | 15.1% | 18.7% |
| Byd Co Ltd ($1211) | 14.8% | 11.6% | 13.4% | 13.8% | |
| Dongfeng Motor Group Co Ltd ($489) | 20.1% | 5.8% | 12.6% | 13.0% | |
| |
|---|
| Median (9 companies) | 13.3% | 11.7% | 12.6% | 13.0% | 11.7% |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.2% | 24.1% | 25.9% | 25.0% | 22.3% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Geely Automobile Holdings Ltd ($175) | 14.4% | 14.6% | 15.8% | 15.9% | 14.4% |
| Byd Co Ltd ($1211) | 11.3% | 10.2% | 9.6% | 12.0% | |
| Qingling Motors Co Ltd ($1122) | 8.8% | 10.3% | 12.8% | 11.4% | 12.2% |
| Sinotruk Hong Kong Ltd ($3808) | 8.0% | 6.6% | 7.4% | 7.8% | |
| Dah Chong Hong Holdings Ltd ($1828) | 4.8% | 4.7% | 4.6% | 4.2% | 3.8% |
| |
|---|
| Median (9 companies) | 8.0% | 4.7% | 4.6% | 4.2% | 3.8% |
|---|
| Great Wall Motor Co Ltd ($2333) | 16.1% | 18.0% | 19.5% | 17.8% | 15.5% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | 20.4% | 22.7% | 10.1% | 15.7% | |
| Brilliance China Automotive Holdings Ltd ($1114) | 4.8% | 8.9% | 10.1% | 13.4% | 12.5% |
| Geely Automobile Holdings Ltd ($175) | 6.8% | 4.5% | 3.9% | 5.0% | 5.3% |
| Byd Co Ltd ($1211) | 16.2% | 13.0% | 11.2% | 4.2% | |
| Dongfeng Motor Group Co Ltd ($489) | 5.0% | 6.4% | 2.2% | 3.8% | |
| |
|---|
| Median (9 companies) | 4.8% | 4.5% | 2.5% | 3.8% | 1.8% |
|---|
| Great Wall Motor Co Ltd ($2333) | 12.9% | 10.7% | 13.0% | 12.0% | 8.0% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Geely Automobile Holdings Ltd ($175) | 15.7% | 16.2% | 19.6% | 13.4% | 15.0% |
| Wuling Motors Holdings Ltd ($305) | 6.2% | 7.2% | 7.7% | 10.0% | 11.8% |
| Dah Chong Hong Holdings Ltd ($1828) | 14.2% | 11.4% | 8.5% | 7.7% | 6.2% |
| Qingling Motors Co Ltd ($1122) | 5.5% | 4.5% | 5.7% | 5.1% | 5.8% |
| Sinotruk Hong Kong Ltd ($3808) | 5.7% | 2.5% | 3.5% | 3.9% | |
| |
|---|
| Median (9 companies) | 6.1% | 2.7% | 3.5% | 3.9% | 6.2% |
|---|
| Great Wall Motor Co Ltd ($2333) | 22.9% | 27.7% | 32.2% | 25.5% | 22.5% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Guangzhou Automobile Group Co Ltd ($2238) | | | | 13.2x | |
| Byd Co Ltd ($1211) | 2.8x | 3.4x | 6.7x | 3.9x | |
| Dah Chong Hong Holdings Ltd ($1828) | 1.5x | 1.5x | 2.8x | 3.8x | 3.3x |
| Dongfeng Motor Group Co Ltd ($489) | -1.5x | | | 2.3x | |
| Wuling Motors Holdings Ltd ($305) | 2.8x | 2.0x | 1.9x | 0.8x | -0.6x |
| |
|---|
| Median (8 companies) | 2.1x | 2.0x | 2.2x | 1.6x | -1.1x |
|---|
| Great Wall Motor Co Ltd ($2333) | -0.5x | -0.2x | -0.1x | 0.1x | 0.3x |
