Eye on CT Environmental Group Ltd as a growth stock
05/04/2016 • About CT Environmental Group Ltd (
$1363) • By InTwits
Have you thought about CT Environmental Group 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
CT Environmental Group Ltd showed growth in the last financial year. CT Environmental Group Ltd's revenue surged on 75.4% in FY2015. At the same time CT Environmental Group Ltd well managed its profitability and showed even faster growth in EBITDA of 92.9% for the same period.
In the longer period the company showed fast revenue growth of 66.3% from 2012 to 2015 annualy. EBITDA surged on 67.1% from 2012 to 2015 annualy.
CT Environmental Group Ltd ($1363) financials for the last 5 years
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 384 | 312 | 384 | 818 | 1,435 |
|---|
| Revenue growth, % | | -18.7% | 23.1% | 112.9% | 75.4% |
|---|
| Gross margin, % | 57.7% | 65.8% | 63.1% | 56.4% | 49.9% |
|---|
| SG&A, % | 8.42% | 5.34% | 8.57% | 8.09% | 9.70% |
|---|
| EBITDA | 200 | 199 | 241 | 480 | 927 |
|---|
| EBITDA growth, % | | -0.8% | 21.5% | 99.0% | 92.9% |
|---|
| EBITDA margin, % | 52.2% | 63.6% | 62.8% | 58.7% | 64.6% |
|---|
| Net Income | 137 | 144 | 178 | 336 | 599 |
|---|
| Net Income margin, % | 35.6% | 46.2% | 46.3% | 41.1% | 41.7% |
|---|
| |
| CAPEX | 122 | 203 | 104 | 421 | 581 |
|---|
| CAPEX/Revenue, % | 31.8% | 65.0% | 27.1% | 51.4% | 40.5% |
|---|
| Debt | 393 | 482 | 431 | 1,041 | 2,010 |
|---|
| Cash | 42 | 8 | 308 | 117 | 383 |
|---|
| Net Debt/EBITDA | 1.8x | 2.4x | 0.5x | 1.9x | 1.8x |
|---|
| |
| ROIC, % | 34.4% | 25.9% | 20.5% | 20.8% | 20.1% |
|---|
| ROE, % | 71.2% | 58.6% | 29.6% | 28.6% | 27.5% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. The company's EBITDA margin surged on 5.90 pp from 58.7% to 64.6% in 2015. If we look for the longer period the company's EBITDA margin increased slightly on 1 pp from 63.6% in 2012 to 64.6% in 2015.
CT Environmental Group Ltd shows attractive ROIC at 20.1% for the last 12 months which assumes stable development model. Three years ago it was higher at 25.9%. For the last three years the average ROIC was 20.5%.
CT Environmental Group Ltd showed small growth in Net Income margin of 0.600 pp from 41.1% to 41.7% in 2015. If we look for the longer period CT Environmental Group Ltd's Net Income margin decreased on 4.50 pp from 46.2% in 2012 to 41.7% in 2015.
CT Environmental Group Ltd operates at ROE of 27.5%. For the last three years the average ROE was 28.6%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.The company's CAPEX/Revenue was 40.5% in FY2015. CAPEX/Revenue dropped on 24.5 pp from 65.0% in 2012 to 40.5% in 2015. For the last three years the average CAPEX/Revenue was 39.7%.
Leverage (Debt)
Having such a fast growth profile CT Environmental Group Ltd keeps medium debt level at 1.8x Net Debt/EBITDA. In the longer period CT Environmental Group Ltd showed big decline in leverage of 0.63x from 2.38x in 2012 to 1.76x in 2015.
Peers in Environmental Control
Below we provide CT Environmental Group Ltd benchmarking against other companies in Environmental Control 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 |
|---|
| Sky Forever Supply Chain Management Group Ltd ($8047) | | -73.4% | 446.4% | -62.3% | 12,494.5% |
| ELL Environmental Holdings Ltd ($1395) | | 5.3% | 38.8% | 30.9% | 70.8% |
| Ozner Water International Holding Ltd ($2014) | | 183.9% | 38.5% | 27.2% | 45.7% |
| China Everbright International Ltd ($257) | | -2.2% | 56.0% | 19.5% | 34.3% |
| EverChina International Holdings Co Ltd ($202) | | -1.9% | -8.6% | -89.0% | 26.4% |
| |
|---|
| Median (18 companies) | 1.6% | -0.2% | 12.6% | 16.0% | 3.1% |
|---|
| CT Environmental Group Ltd ($1363) | | -18.7% | 23.1% | 112.9% | 75.4% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| EverChina International Holdings Co Ltd ($202) | 40.2% | 51.8% | 53.4% | 95.3% | 95.4% |
| Ozner Water International Holding Ltd ($2014) | 56.7% | 64.5% | 67.8% | 65.4% | 58.9% |
| China Water Affairs Group Ltd ($855) | 42.7% | 44.0% | 43.1% | 41.8% | 47.3% |
| China Everbright International Ltd ($257) | 41.3% | 49.4% | 44.7% | 46.7% | 45.8% |
| New Universe International Group Ltd ($8068) | 51.9% | 47.9% | 47.7% | 45.0% | 43.2% |
| |
|---|
| Median (18 companies) | 34.8% | 33.2% | 30.5% | 31.3% | 34.4% |
|---|
| CT Environmental Group Ltd ($1363) | 57.7% | 65.8% | 63.1% | 56.4% | 49.9% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 55.9% | 57.5% | 56.6% | 57.8% | 57.9% |
| China Everbright International Ltd ($257) | 37.3% | 44.6% | 40.7% | 43.6% | 44.1% |
| China Water Affairs Group Ltd ($855) | 38.8% | 38.2% | 38.1% | 37.1% | 40.3% |
| New Universe International Group Ltd ($8068) | 42.0% | 40.2% | 37.8% | 39.3% | 36.6% |
| Dynagreen Environmental Protection Group Co Ltd ($1330) | 31.5% | 24.3% | | | 33.5% |
| |
|---|
| Median (18 companies) | 10.3% | 8.1% | 3.8% | 2.3% | 16.2% |
|---|
| CT Environmental Group Ltd ($1363) | 52.2% | 63.6% | 62.8% | 58.7% | 64.6% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Chaoyue Group Ltd ($147) | 3.8% | | 18.1% | 9.2% | 100.9% |
| Ozner Water International Holding Ltd ($2014) | 179.8% | 94.9% | 102.2% | 148.5% | 90.9% |
| Integrated Waste Solutions Group Holdings Ltd ($923) | 25.4% | 13.2% | 10.6% | 41.7% | 88.1% |
| New Universe International Group Ltd ($8068) | 103.4% | 16.4% | 16.6% | 44.9% | 33.3% |
| China Water Affairs Group Ltd ($855) | 31.4% | 40.5% | 39.1% | 30.1% | 28.4% |
| |
|---|
| Median (18 companies) | 10.8% | 12.9% | 13.0% | 8.8% | 8.1% |
|---|
| CT Environmental Group Ltd ($1363) | 31.8% | 65.0% | 27.1% | 51.4% | 40.5% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| China Everbright International Ltd ($257) | 11.1% | 10.4% | 11.2% | 10.5% | 10.8% |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 7.4% | 7.1% | 6.8% | 7.8% | 8.8% |
| Dynagreen Environmental Protection Group Co Ltd ($1330) | | 11.4% | 9.0% | 8.5% | 8.6% |
| Dongjiang Environmental Co Ltd ($895) | 17.0% | 14.3% | 7.4% | 9.4% | 8.2% |
| New Universe International Group Ltd ($8068) | 5.8% | 6.3% | 6.8% | 8.9% | 8.1% |
| |
|---|
| Median (18 companies) | 2.3% | -0.7% | 1.1% | -0.6% | 2.7% |
|---|
| CT Environmental Group Ltd ($1363) | 34.4% | 25.9% | 20.5% | 20.8% | 20.1% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| China Water Affairs Group Ltd ($855) | 2.8x | 2.6x | 2.7x | 3.2x | 3.4x |
| Dynagreen Environmental Protection Group Co Ltd ($1330) | 0.4x | 3.2x | | | 3.2x |
| China Everbright International Ltd ($257) | 2.8x | 2.1x | 0.5x | 1.5x | 2.6x |
| Dongjiang Environmental Co Ltd ($895) | 1.0x | -1.7x | -1.5x | 0.9x | 2.5x |
| Tianjin Capital Environmental Protection Group Co Ltd ($1065) | 4.1x | 4.2x | 3.1x | 2.9x | 1.2x |
| |
|---|
| Median (11 companies) | 0.6x | 1.5x | 0.0x | -0.2x | -0.0x |
|---|
| CT Environmental Group Ltd ($1363) | 1.8x | 2.4x | 0.5x | 1.9x | 1.8x |
