CNC Holdings Ltd reports 516% EBITDA growth in 2016 and 11.2 pp EBITDA Margin growth from 2.2% to 13.3%
15/06/2016 • About CNC Holdings Ltd (
$8356) • By InTwits
CNC 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: 13.3% in FY2016, 2.2% in FY2015, 8.1% in FY2014, 9.4% in FY2013, -1.7% in FY2012
- CNC Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's in pair with industry average of 5.7%.
- CAPEX is quite volatile: 14.0 in FY2016, 7.2 in FY2015, 23.3 in FY2014, 18.8 in FY2013, 10.4 in FY2012
- The company has potentially unprofitable business model: ROIC is at 2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNC Holdings Ltd ($8356) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 219.0 | 293.0 | 324.3 | 369.6 | 370.9 | 0.4% |
| Gross Profit | 21.8 | 44.8 | 50.1 | 23.1 | 68.7 | 197.4% |
| SG&A | | 28.0 | 29.8 | 33.3 | 35.1 | 5.2% |
| EBITDA | -3.6 | 27.5 | 26.2 | 8.0 | 49.5 | 516.4% |
| Net Income | -704.9 | -116.2 | -431.3 | -41.7 | -46.4 | |
Balance Sheet
|
|---|
| Cash | 10.0 | 36.2 | 20.6 | 62.2 | 127.4 | 104.9% |
| Short Term Debt | 4.9 | 2.8 | 591.2 | 10.9 | 5.2 | -51.9% |
| Long Term Debt | 629.2 | 639.6 | 4.0 | 246.1 | 256.7 | 4.3% |
Cash flow
|
|---|
| Capex | 10.4 | 18.8 | 23.3 | 7.2 | 14.0 | 93.7% |
Ratios
|
|---|
| Revenue growth | 18.8% | 33.8% | 10.7% | 14.0% | 0.4% | |
| EBITDA growth | -121.0% | -861.1% | -4.8% | -69.4% | 516.4% | |
| Gross Margin | 9.9% | 15.3% | 15.4% | 6.2% | 18.5% | 12.3% |
| EBITDA Margin | -1.7% | 9.4% | 8.1% | 2.2% | 13.3% | 11.2% |
| Net Income Margin | -321.9% | -39.7% | -133.0% | -11.3% | -12.5% | -1.2% |
| SG&A, % of revenue | | 9.6% | 9.2% | 9.0% | 9.5% | 0.4% |
| CAPEX, % of revenue | 4.7% | 6.4% | 7.2% | 2.0% | 3.8% | 1.8% |
| ROIC | -6.7% | -5.8% | -10.4% | -13.5% | 2.8% | 16.3% |
| ROE | -1,212.5% | | | | | 0.0% |
| Net Debt/EBITDA | | 22.0x | 21.9x | 24.3x | 2.7x | -21.5x |
Revenue and profitability
CNC Holdings Ltd's Revenue showed almost no change in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 16.2 pp from -3.2% to -19.4% in FY2016.
Gross Margin jumped on 12.3 pp from 6.2% to 18.5% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 1.2 pp from -11.3% to -12.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.8% in FY2016. CAPEX/Revenue decreased on 2.6 pp from 6.4% in FY2013 to 3.8% in FY2016. For the last three years the average CAPEX/Revenue was 4.3%.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA dropped on 21.5x from 24.3x to 2.7x in FY2016. Debt increased slightly on 1.9% while cash jumped on 105%.
Appendix 1: Peers in Engineering&Construction
Below we provide CNC Holdings Ltd benchmarking against other companies in Engineering&Construction 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 | 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% | |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (40 companies) | 12.8% | 22.8% | 20.8% | 9.9% | 8.5% |
|---|
| CNC Holdings Ltd ($8356) | | 33.8% | 10.7% | 14.0% | 0.4% |
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% | 16.9% | 15.3% | 16.3% | 10.1% |
|---|
| CNC Holdings Ltd ($8356) | 9.9% | 15.3% | 15.4% | 6.2% | 18.5% |
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% | 9.6% | 9.1% | 8.3% | 3.1% |
|---|
| CNC Holdings Ltd ($8356) | -1.7% | 9.4% | 8.1% | 2.2% | 13.3% |
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% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| 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% | 47.3% |
| PYI Corp Ltd ($498) | 3.7% | 4.2% | 24.5% | 13.1% | |
| |
|---|
| Median (40 companies) | 2.3% | 2.5% | 1.6% | 2.1% | 7.6% |
|---|
| CNC Holdings Ltd ($8356) | 4.7% | 6.4% | 7.2% | 2.0% | 3.8% |
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% | 5.5% | 4.1% | 4.4% | 3.5% |
|---|
| CNC Holdings Ltd ($8356) | -6.7% | -5.8% | -10.4% | -13.5% | 2.8% |
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 | |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| Chun Wo Development Holdings Ltd ($711) | 14.3x | 8.1x | 12.6x | 15.9x | 10.5x |
| |
|---|
| Median (34 companies) | 1.0x | 0.3x | 0.4x | 2.1x | 5.8x |
|---|
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | 2.7x |
