China Dynamics Holdings Ltd revenue surged on 1,640% and EBITDA Margin surged on 148 pp from -175% to -27.3%
27/06/2016 • About China Dynamics Holdings Ltd (
$476) • By InTwits
China Dynamics Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Dynamics Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -2.8%
- The company operates at negative EBITDA Margin: -27.3%
- China Dynamics Holdings Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -24.7% for the sames years0
- China Dynamics Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.5%. At the same time it's in pair with industry average of 24.2%.
- CAPEX is quite volatile: 18.7 in FY2016, 21.6 in FY2015, 0.68 in FY2014, 0.033 in FY2013, 2.6 in FY2012
- The company has unprofitable business model: ROIC is at -2.8%
- It operates with high leverage: Net Debt/EBITDA is 10.7x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Dynamics Holdings Ltd ($476) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 144.2 | 261.6 | 68.2 | 19.0 | 330.2 | 1,640.2% |
| Gross Profit | 10.5 | 13.7 | 2.2 | 0.6 | 14.7 | 2,425.0% |
| SG&A | | | | 86.2 | 131.6 | 52.7% |
| EBITDA | -21.8 | -20.0 | -38.0 | -33.2 | -90.3 | |
| Net Income | -21.3 | -23.2 | -36.0 | -48.4 | -120.1 | |
Balance Sheet
|
|---|
| Cash | 62.5 | 40.6 | 276.0 | 392.0 | 152.5 | -61.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 12.4 | 12.0 | -3.2% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 2.6 | 0.0 | 0.7 | 21.6 | 18.7 | -13.5% |
Ratios
|
|---|
| Revenue growth | -53.8% | 81.4% | -73.9% | -72.2% | 1,640.2% | |
| EBITDA growth | -53.2% | -8.2% | 90.0% | -12.5% | 171.7% | |
| Gross Margin | 7.3% | 5.2% | 3.2% | 3.1% | 4.5% | 1.4% |
| EBITDA Margin | -15.1% | -7.6% | -55.7% | -175.1% | -27.3% | 147.8% |
| Net Income Margin | -14.8% | -8.9% | -52.7% | -255.1% | -36.4% | 218.7% |
| SG&A, % of revenue | | | | 453.9% | 39.8% | -414.1% |
| CAPEX, % of revenue | 1.8% | 0.0% | 1.0% | 113.8% | 5.7% | -108.2% |
| ROIC | -9.7% | -11.0% | -2.4% | -1.1% | -2.8% | -1.8% |
| ROE | -13.1% | -16.1% | -2.2% | -1.5% | -3.5% | -2.1% |
Revenue and profitability
The company's Revenue jumped on 1,640%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 142 pp from -183% to -326% in FY2016.
Gross Margin increased slightly on 1.4 pp from 3.1% to 4.5% in FY2016. SG&A as a % of Revenue dropped on 414 pp from 454% to 39.8% in FY2016.
Net Income marign jumped on 219 pp from -255% to -36.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 China Dynamics Holdings Ltd had CAPEX/Revenue of 5.7%. China Dynamics Holdings Ltd showed CAPEX/Revenue growth of 5.6 pp from 0.013% in FY2013 to 5.7% in FY2016. Average CAPEX/Revenue for the last three years was 40.2%.
Return on investment
The company operates at negative ROIC (-2.85%) and ROE (-3.52%). ROIC decreased slightly on 1.8 pp from -1.1% to -2.8% in FY2016. ROE decreased on 2.1 pp from -1.5% to -3.5% in FY2016.
Leverage (Debt)
Debt level is 10.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt decreased on 3.2% while cash dropped on 61.1%.
Appendix 1: Peers in Mining
Below you can find China Dynamics Holdings Ltd benchmarking vs. other companies in Mining 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 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 89.7% | -95.8% | 2,361.6% | 1,178.3% |
| Real Gold Mining Ltd ($246) | -44.0% | -68.0% | -26.2% | 106.2% | |
| REX Global Entertainment Holdings Ltd ($164) | | 81.6% | -15.5% | 96.4% | 30.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | 3,467.3% | 78.0% | |
| Zijin Mining Group Co Ltd ($2899) | 21.6% | 2.5% | 18.1% | 26.9% | |
| |
|---|
| Median (47 companies) | 6.4% | -1.7% | -5.1% | -14.0% | -4.4% |
|---|
| China Dynamics Holdings Ltd ($476) | | 81.4% | -73.9% | -72.2% | 1,640.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 2.5% | 5.1% | 39.6% | 93.0% | |
| REX Global Entertainment Holdings Ltd ($164) | -15.8% | -7.8% | -0.8% | 88.6% | 87.3% |
| China Billion Resources Ltd ($274) | 71.4% | 47.2% | 73.4% | 79.7% | |
| Sun International Resources Ltd ($8029) | 83.2% | 73.1% | 64.8% | 69.4% | 58.8% |
| Timeless Software Ltd ($8028) | 17.7% | 48.5% | 29.4% | 42.1% | 39.9% |
| |
|---|
| Median (48 companies) | 15.8% | 14.4% | 15.5% | 15.5% | 34.0% |
|---|
| China Dynamics Holdings Ltd ($476) | 7.3% | 5.2% | 3.2% | 3.1% | 4.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| G-Resources Group Ltd ($1051) | | 54.5% | 53.4% | 58.3% | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 70.0% | 64.6% | 59.6% | 51.3% | |
| Timeless Software Ltd ($8028) | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% |
| Hengxing Gold Holding Co Ltd ($2303) | | -766.2% | 24.5% | 43.9% | |
| Sino Prosper Group Holdings Ltd ($766) | -138.6% | -138.2% | -378.4% | 42.9% | |
| |
|---|
| Median (48 companies) | 5.3% | 8.5% | 6.3% | 5.1% | -49.7% |
|---|
| China Dynamics Holdings Ltd ($476) | -15.1% | -7.6% | -55.7% | -175.1% | -27.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% |
| Kaz Minerals ($847) | 36.6% | 136.5% | 168.8% | 168.7% | |
| Chinalco Mining Corp International ($3668) | | | | 115.6% | |
| MMG Ltd ($1208) | 25.7% | 22.6% | 41.9% | 100.4% | |
| North Mining Shares Co Ltd ($433) | 21.7% | 13.0% | 58.9% | 96.7% | |
| |
|---|
| Median (48 companies) | 17.7% | 17.9% | 16.5% | 12.1% | 3.3% |
|---|
| China Dynamics Holdings Ltd ($476) | 1.8% | 0.0% | 1.0% | 113.8% | 5.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Mining Co Ltd ($1164) | 2.6% | 3.3% | 7.9% | 16.7% | |
| United Co RUSAL PLC ($486) | 0.3% | -9.0% | 6.3% | 12.3% | |
| Xingfa Aluminium Holdings Ltd ($98) | 7.6% | 8.8% | 11.7% | 11.8% | |
| Timeless Software Ltd ($8028) | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% |
| China Hongqiao Group Ltd ($1378) | 24.8% | 17.0% | 14.1% | 10.6% | |
| |
|---|
| Median (49 companies) | 1.9% | 2.7% | 1.5% | -1.0% | -10.0% |
|---|
| China Dynamics Holdings Ltd ($476) | -9.7% | -11.0% | -2.4% | -1.1% | -2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 9.2x | 9.7x | 9.2x | 31.5x | |
| Chinalco Mining Corp International ($3668) | | | | 25.0x | |
| MMG Ltd ($1208) | 2.1x | 2.0x | 10.2x | 20.2x | |
| Kaz Minerals ($847) | 2.4x | 2.9x | 5.5x | 18.7x | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 4.1x | 6.4x | 13.5x | |
| |
|---|
| Median (29 companies) | 2.0x | 1.9x | 4.5x | 3.4x | -1.4x |
|---|
