Shandong Chenming Paper Holdings Ltd reports 102% Net Income growth and 12.7% Revenue growth
17/02/2017 • About Shandong Chenming Paper Holdings Ltd (
$1812) • By InTwits
Shandong Chenming Paper Holdings Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 23.2% in 2016 vs. 20.4% in 2015 vs. 11.4% in 2012
- Shandong Chenming Paper Holdings Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.8%. At the same time it's in pair with industry average of 15.1%.
- CAPEX is quite volatile: 2,146 in 2016, 5,856 in 2015, 9,841 in 2014, 8,456 in 2013, 3,643 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shandong Chenming Paper Holdings Ltd ($1812) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 19,683 | 20,303 | 19,011 | 20,109 | 22,656 | 12.7% |
| Gross Profit | 2,989 | 3,651 | 3,688 | 5,344 | 6,868 | 28.5% |
| SG&A | 1,855 | 1,843 | 2,309 | 1,819 | 1,759 | -3.3% |
| EBITDA | 2,238 | 2,676 | 2,763 | 4,100 | 5,257 | 28.2% |
| Net Income | 221 | 711 | 505 | 1,021 | 2,064 | 102.1% |
Balance Sheet
|
|---|
| Cash | 2,344 | 727 | 5,476 | 2,121 | 1,980 | -6.6% |
| Short Term Debt | 15,530 | 15,251 | 23,934 | 43,802 | 41,231 | -5.9% |
| Long Term Debt | 10,189 | 9,492 | 11,576 | 8,958 | 6,936 | -22.6% |
Cash flow
|
|---|
| Capex | 2,836 | 3,815 | 3,093 | 3,716 | 2,478 | -33.3% |
Ratios
|
|---|
| Revenue growth | 11.4% | 3.2% | -6.4% | 5.8% | 12.7% | |
| EBITDA growth | 9.3% | 19.5% | 3.3% | 48.4% | 28.2% | |
| Gross Margin | 15.2% | 18.0% | 19.4% | 26.6% | 30.3% | 3.7% |
| EBITDA Margin | 11.4% | 13.2% | 14.5% | 20.4% | 23.2% | 2.8% |
| Net Income Margin | 1.1% | 3.5% | 2.7% | 5.1% | 9.1% | 4.0% |
| SG&A, % of revenue | 9.4% | 9.1% | 12.1% | 9.0% | 7.8% | -1.3% |
| CAPEX, % of revenue | 14.4% | 18.8% | 16.3% | 18.5% | 10.9% | -7.5% |
| ROIC | 1.9% | 3.3% | 3.0% | 4.5% | 5.4% | 0.9% |
| ROE | 1.6% | 5.1% | 3.6% | 6.6% | 11.2% | 4.6% |
| Net Debt/EBITDA | 10.4x | 9.0x | 10.9x | 12.4x | 8.8x | -3.6x |
Revenue and profitability
The company's Revenue jumped on 12.7%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 20.4% to 23.2% in 2016.
Gross Margin increased on 3.7 pp from 26.6% to 30.3% in 2016. SG&A as a % of Revenue decreased slightly on 1.3 pp from 9.0% to 7.8% in 2016.
Net Income marign increased on 4.0 pp from 5.1% to 9.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 10.9%. CAPEX/Revenue decreased on 7.9 pp from 18.8% in 2013 to 10.9% in 2016. It's average CAPEX/Revenue for the last three years was 15.2%.
Return on investment
The company operates at low ROIC (5.44%) and ROE (11.19%). ROIC increased slightly on 0.94 pp from 4.5% to 5.4% in 2016. ROE increased on 4.6 pp from 6.6% to 11.2% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.8x and Debt / EBITDA is 9.2x. Net Debt / EBITDA dropped on 3.6x from 12.4x to 8.8x in 2016. Debt decreased on 8.7% while cash decreased on 6.6%.
Appendix 1: Peers in Forest Products&Paper
Below you can find Shandong Chenming Paper Holdings Ltd benchmarking vs. other companies in Forest Products&Paper 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 |
|---|
| KuangChi Science Ltd ($439) | | | 39.7% | 211.9% | |
| Merdeka Mobile Group Ltd ($8163) | -11.0% | 415.4% | 71.4% | 88.0% | |
| Youyuan International Holdings Ltd ($2268) | 0.4% | 6.7% | 0.8% | 10.3% | |
| PNG Resources Holdings Ltd ($221) | | 248.6% | 8.5% | 8.7% | -44.3% |
| China Sunshine Paper Holdings Co Ltd ($2002) | -0.5% | -1.3% | -5.7% | 8.1% | |
| |
|---|
| Median (11 companies) | -0.0% | 4.9% | 2.8% | 6.2% | -5.2% |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | | 3.2% | -6.4% | 5.8% | 12.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KuangChi Science Ltd ($439) | | 20.3% | 17.3% | 63.6% | |
| PNG Resources Holdings Ltd ($221) | 19.4% | 18.6% | 24.2% | 35.3% | 31.9% |
| Youyuan International Holdings Ltd ($2268) | 29.8% | 32.9% | 31.3% | 29.2% | |
| China Asean Resources Ltd ($8186) | 19.8% | 40.3% | | 27.8% | |
| China Sunshine Paper Holdings Co Ltd ($2002) | 16.6% | 16.5% | 19.0% | 20.0% | |
| |
|---|
| Median (12 companies) | 16.4% | 16.9% | 17.0% | 19.9% | 18.3% |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | 15.2% | 18.0% | 19.4% | 26.6% | 30.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Youyuan International Holdings Ltd ($2268) | 27.2% | 30.8% | 29.8% | 30.0% | |
| PNG Resources Holdings Ltd ($221) | -6.1% | 9.6% | 12.2% | 26.5% | 21.9% |
| Changgang Dunxin Enterprise Co Ltd ($2229) | 20.9% | 22.2% | 22.8% | 19.9% | |
| Nine Dragons Paper Holdings Ltd ($2689) | 16.4% | 17.2% | 18.6% | 16.9% | 20.7% |
| China Sunshine Paper Holdings Co Ltd ($2002) | 14.3% | 12.7% | 14.5% | 15.5% | |
| |
|---|
| Median (12 companies) | 10.3% | 10.3% | 7.0% | 9.0% | 20.7% |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | 11.4% | 13.2% | 14.5% | 20.4% | 23.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KuangChi Science Ltd ($439) | | 3.2% | 0.5% | 65.6% | |
| PNG Resources Holdings Ltd ($221) | 133.1% | 35.6% | 53.0% | 44.8% | 31.1% |
| Changgang Dunxin Enterprise Co Ltd ($2229) | 2.1% | 15.8% | 2.0% | 36.7% | |
| China Agroforestry Low-Carbon Holdings Ltd ($1069) | 0.2% | 11.5% | 26.7% | 26.3% | |
| Youyuan International Holdings Ltd ($2268) | 28.4% | 14.8% | 8.4% | 14.2% | |
| |
|---|
| Median (12 companies) | 14.8% | 9.9% | 5.9% | 5.6% | 5.7% |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | 14.4% | 18.8% | 16.3% | 18.5% | 10.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| PNG Resources Holdings Ltd ($221) | -1.2% | 5.8% | 8.3% | 19.9% | 8.1% |
| Youyuan International Holdings Ltd ($2268) | 12.6% | 12.9% | 10.4% | 10.6% | |
| Changgang Dunxin Enterprise Co Ltd ($2229) | 41.0% | 32.5% | 23.3% | 10.4% | |
| China Sunshine Paper Holdings Co Ltd ($2002) | 6.8% | 5.1% | 5.5% | 7.6% | |
| Nine Dragons Paper Holdings Ltd ($2689) | 6.5% | 6.1% | 5.9% | 5.3% | 7.7% |
| |
|---|
| Median (13 companies) | 0.2% | 2.0% | -0.5% | 2.6% | 7.7% |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | 1.9% | 3.3% | 3.0% | 4.5% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greenheart Group Ltd ($94) | | 7.1x | 26.8x | 53.0x | |
| Samson Paper Holdings Ltd ($731) | 8.3x | 13.0x | 9.3x | 8.9x | 11.3x |
| Nine Dragons Paper Holdings Ltd ($2689) | 4.9x | 5.7x | 5.1x | 4.7x | 3.3x |
| China Sunshine Paper Holdings Co Ltd ($2002) | 5.9x | 6.9x | 6.0x | 4.1x | |
| Youyuan International Holdings Ltd ($2268) | 1.5x | 2.1x | 1.5x | 1.4x | |
| |
|---|
| Median (9 companies) | 2.5x | 3.6x | 3.3x | 1.4x | 3.3x |
|---|
| Shandong Chenming Paper Holdings Ltd ($1812) | 10.4x | 9.0x | 10.9x | 12.4x | 8.8x |
