Grand Ming Group Holdings Ltd reports 52.7% CAPEX decline in 2016 while 14.3% Revenue growth
02/06/2016 • About Grand Ming Group Holdings Ltd (
$1271) • By InTwits
Grand Ming Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 16.9% in FY2016, 19.0% in FY2015, 31.0% in FY2014, 15.8% in FY2013, 10.0% in FY2012
- Grand Ming Group Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.5%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 135 in FY2016, 286 in FY2015, 42.0 in FY2014, 125 in FY2013, 0.018 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 5.8x while industry average is 4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Grand Ming Group Holdings Ltd ($1271) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,058 | 774 | 484 | 846 | 968 | 14.3% |
| Gross Profit | 117 | 140 | 173 | 167 | 169 | 1.5% |
| SG&A | 13 | 21 | 25 | 13 | 14 | 5.3% |
| EBITDA | 106 | 123 | 150 | 161 | 163 | 1.6% |
| Net Income | 102 | 149 | 438 | 328 | 402 | 22.6% |
Balance Sheet
|
|---|
| Cash | 77 | 55 | 204 | 132 | 120 | -9.1% |
| Short Term Debt | 698 | 67 | 114 | 148 | 126 | -15.1% |
| Long Term Debt | 0 | 761 | 706 | 927 | 945 | 1.9% |
Cash flow
|
|---|
| Capex | 0 | 125 | 42 | 286 | 135 | -52.7% |
Ratios
|
|---|
| Revenue growth | 131.0% | -26.9% | -37.4% | 74.8% | 14.3% | |
| EBITDA growth | 31.4% | 16.2% | 22.5% | 7.1% | 1.6% | |
| Gross Margin | 11.0% | 18.1% | 35.7% | 19.7% | 17.5% | -2.2% |
| EBITDA Margin | 10.0% | 15.8% | 31.0% | 19.0% | 16.9% | -2.1% |
| Net Income Margin | 9.6% | 19.3% | 90.6% | 38.7% | 41.5% | 2.8% |
| SG&A, % of revenue | 1.2% | 2.7% | 5.1% | 1.6% | 1.5% | -0.1% |
| CAPEX, % of revenue | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% | -19.8% |
| ROIC | 5.5% | 6.0% | 6.2% | 5.4% | 4.7% | -0.7% |
| ROE | 9.1% | 12.2% | 28.2% | 16.6% | 17.5% | 0.9% |
| Net Debt/EBITDA | 5.9x | 6.3x | 4.1x | 5.9x | 5.8x | -0.0x |
Revenue and profitability
The company's Revenue surged on 14.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.6 pp from 19.3% to 8.7% in FY2016.
Gross Margin decreased on 2.2 pp from 19.7% to 17.5% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased on 2.8 pp from 38.7% to 41.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 14.0% in FY2016. CAPEX/Revenue decreased on 2.2 pp from 16.1% in FY2013 to 14.0% in FY2016. For the last three years the average CAPEX/Revenue was 18.8%.Grand Ming Group Holdings Ltd invested a big chunk of EBITDA (82.7%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROE (17.50%) while ROIC is low (4.71%). ROIC decreased slightly on 0.71 pp from 5.4% to 4.7% in FY2016. ROE increased slightly on 0.86 pp from 16.6% to 17.5% in FY2016.
Leverage (Debt)
Debt level is 5.8x Net Debt / EBITDA and 6.5x Debt / EBITDA. Net Debt / EBITDA decreased on 0.048x from 5.9x to 5.8x in FY2016. Debt showed almost no change in FY2016 while cash decreased on 9.1%.
Appendix 1: Peers in Engineering&Construction
Below you can find Grand Ming Group Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | -39.1% | -76.8% | -55.8% | 592.3% | |
| Vision Fame International Holding Ltd ($1315) | -9.9% | 45.9% | -10.5% | 105.6% | |
| Sino Credit Holdings Ltd ($628) | -13.8% | | | 97.4% | |
| Freetech Road Recycling Technology Holdings Ltd ($6888) | 72.8% | 29.4% | -37.9% | 57.9% | |
| |
|---|
| Median (40 companies) | 12.8% | 24.0% | 20.8% | 9.9% | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | |
| China National Culture Group Ltd ($745) | 0.9% | 12.1% | 10.3% | 32.3% | |
| Kingbo Strike Ltd ($1421) | 32.4% | 44.4% | 40.3% | 30.7% | |
| |
|---|
| Median (35 companies) | 17.5% | 15.3% | 15.3% | 15.6% | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | 11.0% | 18.1% | 35.7% | 19.7% | 17.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | |
| |
|---|
| Median (40 companies) | 10.0% | 9.5% | 8.1% | 7.8% | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | 10.0% | 15.8% | 31.0% | 19.0% | 16.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | |
| KFM Kingdom Holdings Ltd ($3816) | 4.6% | 11.5% | 14.9% | 9.6% | |
| |
|---|
| Median (40 companies) | 2.5% | 2.5% | 1.6% | 2.0% | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | |
| Broad Greenstate International Co Ltd ($1253) | 33.2% | 85.1% | 51.2% | 26.0% | |
| China Saite Group Co Ltd ($153) | 64.0% | 53.2% | 35.3% | 24.5% | |
| CNQC International Holdings Ltd ($1240) | 12.2% | 22.3% | 40.4% | 21.8% | |
| |
|---|
| Median (42 companies) | 6.5% | 5.1% | 3.6% | 3.1% | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | 5.5% | 6.0% | 6.2% | 5.4% | 4.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (34 companies) | 0.9x | 0.3x | 0.4x | 2.1x | |
|---|
| Grand Ming Group Holdings Ltd ($1271) | 5.9x | 6.3x | 4.1x | 5.9x | 5.8x |
