Xiwang Special Steel Co Ltd reports 34.6% EBITDA decline and 2.2 pp EBITDA Margin decline from 13.4% to 11.2%
31/03/2016 • About Xiwang Special Steel Co Ltd (
$1266) • By InTwits
Xiwang Special Steel Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Xiwang Special Steel Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.7%. At the same time it's in pair with industry average of 20.6%.
- CAPEX is quite volatile: 143 in 2015, 60.8 in 2014, 73.9 in 2013, 136 in 2012, 284 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Xiwang Special Steel Co Ltd ($1266) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,541 | 6,891 | 7,030 | 8,642 | 6,752 | -21.9% |
| Gross Profit | 1,293 | 534 | 650 | 1,112 | 576 | -48.2% |
| SG&A | | 69 | 55 | 97 | 88 | -8.8% |
| EBITDA | 1,342 | 632 | 822 | 1,157 | 756 | -34.6% |
| Net Income | 909 | 345 | 384 | 407 | 169 | -58.4% |
Balance Sheet
|
|---|
| Cash | 154 | 370 | 93 | 127 | 272 | 113.9% |
| Short Term Debt | 2,046 | 3,000 | 3,120 | 2,295 | 1,442 | -37.2% |
| Long Term Debt | 1,000 | 1,019 | 499 | 30 | 421 | 1,303.9% |
Cash flow
|
|---|
| Capex | 1,277 | 1,559 | 2,216 | 1,862 | 1,544 | -17.1% |
Ratios
|
|---|
| Revenue growth | 58.5% | -19.3% | 2.0% | 22.9% | -21.9% | |
| EBITDA growth | 93.1% | -52.9% | 30.1% | 40.7% | -34.6% | |
| Gross Margin | 15.1% | 7.7% | 9.2% | 12.9% | 8.5% | -4.3% |
| EBITDA Margin | 15.7% | 9.2% | 11.7% | 13.4% | 11.2% | -2.2% |
| Net Income Margin | 10.6% | 5.0% | 5.5% | 4.7% | 2.5% | -2.2% |
| SG&A, % of revenue | | 1.0% | 0.8% | 1.1% | 1.3% | 0.2% |
| CAPEX, % of revenue | 14.9% | 22.6% | 31.5% | 21.5% | 22.9% | 1.3% |
| ROIC | 33.5% | 7.8% | 8.7% | 11.5% | 4.6% | -7.0% |
| ROE | 66.3% | 14.7% | 13.0% | 11.7% | 4.4% | -7.3% |
| Net Debt/EBITDA | 2.2x | 5.8x | 4.3x | 1.9x | 2.1x | 0.2x |
Revenue and profitability
The company's Revenue dropped on 21.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.96 pp from 21.9% to 22.8% in 2015.
Gross Margin decreased on 4.3 pp from 12.9% to 8.5% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 2.2 pp from 4.7% to 2.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 22.9% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 25.3%.Xiwang Special Steel Co Ltd has spent a lot to CAPEX (204% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (4.56%) and ROE (4.36%). ROIC decreased on 7.0 pp from 11.5% to 4.6% in 2015. ROE decreased on 7.3 pp from 11.7% to 4.4% in 2015.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 1.9x to 2.1x in 2015. Debt dropped on 19.9% in 2015 while cash surged on 114% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Xiwang Special 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% | -1.1% | -6.0% | -20.4% |
|---|
| Xiwang Special Steel Co Ltd ($1266) | | -19.3% | 2.0% | 22.9% | -21.9% |
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% | 11.3% | 11.4% |
|---|
| Xiwang Special Steel Co Ltd ($1266) | 15.1% | 7.7% | 9.2% | 12.9% | 8.5% |
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) | 7.6% | 16.4% | 21.3% | 7.1% | 1.9% |
|---|
| Xiwang Special Steel Co Ltd ($1266) | 15.7% | 9.2% | 11.7% | 13.4% | 11.2% |
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% | 7.2% |
|---|
| Xiwang Special Steel Co Ltd ($1266) | 14.9% | 22.6% | 31.5% | 21.5% | 22.9% |
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) | 10.5% | 6.2% | 7.5% | 3.1% | -3.9% |
|---|
| Xiwang Special Steel Co Ltd ($1266) | 33.5% | 7.8% | 8.7% | 11.5% | 4.6% |
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 (13 companies) | 1.3x | 2.1x | 2.5x | 3.2x | 2.1x |
|---|
| Xiwang Special Steel Co Ltd ($1266) | 2.2x | 5.8x | 4.3x | 1.9x | 2.1x |
