China Environmental Energy Investment Ltd reports 77.8% CAPEX decline in 2016 while 69.7% Revenue growth
28/06/2016 • About China Environmental Energy Investment Ltd (
$986) • By InTwits
China Environmental Energy Investment Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Environmental Energy Investment Ltd doesn't have a profitable business model yet: FY2016 ROIC is -2.7%
- The company operates at negative EBITDA Margin: -106.4%
- China Environmental Energy Investment Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -405.7%0
- China Environmental Energy Investment Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.7%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: 1.2 in FY2016, 5.4 in FY2015, 10.7 in FY2014, 0.41 in FY2013, 8.4 in FY2012
- The company has unprofitable business model: ROIC is at -2.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Environmental Energy Investment Ltd ($986) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 136.0 | 99.7 | 59.8 | 11.2 | 19.1 | 69.7% |
| Gross Profit | 19.0 | 1.2 | 5.4 | 5.5 | 7.7 | 39.3% |
| SG&A | 35.9 | 87.3 | 29.0 | 28.1 | 36.7 | 30.2% |
| EBITDA | -0.0 | -68.0 | -1,211.6 | -21.9 | -20.3 | |
| Net Income | 7.8 | -378.8 | -1,414.6 | -147.9 | -102.6 | |
Balance Sheet
|
|---|
| Cash | 30.4 | 3.6 | 10.6 | 250.9 | 22.8 | -90.9% |
| Short Term Debt | 293.9 | 148.2 | 80.9 | 225.7 | 101.4 | -55.1% |
| Long Term Debt | 0.4 | 20.0 | 20.2 | 20.3 | 51.7 | 154.8% |
Cash flow
|
|---|
| Capex | 8.4 | 0.4 | 10.7 | 5.4 | 1.2 | -77.8% |
Ratios
|
|---|
| Revenue growth | 154.5% | -26.7% | -40.0% | -81.2% | 69.7% | |
| EBITDA growth | -99.6% | 174,330.8% | 1,681.0% | -98.2% | -7.1% | |
| Gross Margin | 14.0% | 1.2% | 9.0% | 49.2% | 40.4% | -8.8% |
| EBITDA Margin | -0.0% | -68.3% | -2,025.8% | -194.5% | -106.4% | 88.0% |
| Net Income Margin | 5.8% | -380.1% | -2,365.3% | -1,315.1% | -537.4% | 777.7% |
| SG&A, % of revenue | 26.4% | 87.6% | 48.4% | 250.3% | 192.1% | -58.2% |
| CAPEX, % of revenue | 6.1% | 0.4% | 17.9% | 47.6% | 6.2% | -41.4% |
| ROIC | -1.3% | -13.3% | -373.7% | -5.2% | -2.7% | 2.5% |
| ROE | 2.0% | -114.7% | -911.6% | -40.2% | -12.2% | 28.0% |
Revenue and profitability
The company's Revenue surged on 69.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 44.8 pp from 44.2% to 89.0% in FY2016.
Gross Margin decreased on 8.8 pp from 49.2% to 40.4% in FY2016. SG&A as a % of Revenue dropped on 58.2 pp from 250% to 192% in FY2016.
Net Income marign surged on 778 pp from -1,315% to -537% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 6.2%. The company's CAPEX/Revenue increased on 5.8 pp from 0.41% in FY2013 to 6.2% in FY2016. For the last three years the average CAPEX/Revenue was 23.9%.
Return on investment
The company operates at negative ROIC (-2.72%) and ROE (-12.19%). ROIC increased on 2.5 pp from -5.2% to -2.7% in FY2016. ROE surged on 28.0 pp from -40.2% to -12.2% in FY2016.
Leverage (Debt)
Debt level is -19.2x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 37.8% while cash dropped on 90.9%.
Appendix 1: Peers in Miscellaneous Manufactur
Below you can find China Environmental Energy Investment Ltd benchmarking vs. other companies in Miscellaneous Manufactur 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 |
|---|
| Karrie International Hldgs ($1050) | | 0.1% | -11.3% | 27.4% | 11.8% |
| Sunny Optical Technology Group Co Ltd ($2382) | 59.5% | 45.9% | 45.0% | 26.9% | |
| TK Group Holdings Ltd ($2283) | 40.2% | 9.3% | 11.8% | 20.0% | |
| AMCO United Holding Ltd ($2970) | | 10.8% | 53.9% | 16.8% | 31.1% |
| Yusei Holdings Ltd ($96) | 18.4% | -9.3% | 6.7% | 15.6% | |
| |
|---|
| Median (25 companies) | -4.5% | 0.1% | 8.2% | -4.8% | 31.1% |
|---|
| China Environmental Energy Investment Ltd ($986) | | -26.7% | -40.0% | -81.2% | 69.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Man Sang International Ltd ($938) | 42.4% | 32.8% | 60.3% | 78.6% | 56.4% |
| Time Watch Investments Ltd ($2033) | 60.2% | 60.6% | 65.0% | 68.1% | |
| Lee & Man Chemical Co Ltd ($746) | 34.3% | 35.7% | 41.9% | 39.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 33.2% | 35.1% | 37.4% | 38.7% | |
| Launch Tech Co Ltd ($2488) | 27.4% | 33.6% | 33.6% | 38.3% | |
| |
|---|
| Median (24 companies) | 19.8% | 20.8% | 24.9% | 22.4% | 12.1% |
|---|
| China Environmental Energy Investment Ltd ($986) | 14.0% | 1.2% | 9.0% | 49.2% | 40.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lee & Man Chemical Co Ltd ($746) | 30.4% | 31.3% | 38.4% | 37.6% | |
| Man Sang International Ltd ($938) | 24.9% | 15.4% | 37.0% | 33.8% | 40.4% |
| IPE Group Ltd ($929) | 25.6% | 22.5% | 29.5% | 29.1% | |
| DeTeam Co Ltd ($65) | 8.0% | 3.9% | -1.3% | 24.3% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 18.4% | 19.8% | 20.6% | 24.2% | |
| |
|---|
| Median (25 companies) | 8.0% | 9.8% | 9.8% | 7.9% | 9.0% |
|---|
| China Environmental Energy Investment Ltd ($986) | -0.0% | -68.3% | -2,025.8% | -194.5% | -106.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| DeTeam Co Ltd ($65) | 6.7% | 47.0% | 5.6% | 33.1% | |
| Lee & Man Chemical Co Ltd ($746) | 5.8% | 51.1% | 33.7% | 22.8% | |
| China International Marine Containers Group Co Ltd ($2039) | 3.9% | 12.1% | 18.5% | 21.2% | |
| IPE Group Ltd ($929) | 6.3% | 13.3% | 12.3% | 13.3% | |
| Yusei Holdings Ltd ($96) | 3.3% | 4.2% | 3.8% | 9.3% | |
| |
|---|
| Median (25 companies) | 4.6% | 4.2% | 3.8% | 4.3% | 0.2% |
|---|
| China Environmental Energy Investment Ltd ($986) | 6.1% | 0.4% | 17.9% | 47.6% | 6.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Time Watch Investments Ltd ($2033) | 34.5% | 27.1% | 27.8% | 27.9% | |
| TK Group Holdings Ltd ($2283) | 36.8% | 31.1% | 29.4% | 27.6% | |
| Zhuzhou CSR Times Electric Co Ltd ($3898) | 16.9% | 17.7% | 20.0% | 21.1% | |
| Sunny Optical Technology Group Co Ltd ($2382) | 19.7% | 17.8% | 16.5% | 19.4% | |
| Yusei Holdings Ltd ($96) | 4.2% | 7.0% | 13.6% | 14.1% | |
| |
|---|
| Median (25 companies) | 4.3% | 4.4% | 4.4% | 1.6% | 9.5% |
|---|
| China Environmental Energy Investment Ltd ($986) | -1.3% | -13.3% | -373.7% | -5.2% | -2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Continental Holdings Ltd ($513) | | 20.1x | 92.9x | 4,203.6x | |
| South China China Ltd ($413) | | 37.5x | 2,842.3x | 27.3x | |
| Launch Tech Co Ltd ($2488) | 7.6x | 2.4x | 3.9x | 14.5x | |
| China International Marine Containers Group Co Ltd ($2039) | 4.0x | 4.7x | 5.8x | 9.8x | |
| VS International Group Ltd ($1002) | 5.1x | 6.5x | 4.4x | 3.3x | |
| |
|---|
| Median (23 companies) | -0.2x | -0.0x | -0.1x | 0.4x | -1.0x |
|---|
