Xinyi Solar Holdings Ltd is an attractive stock for a growth investor
07/03/2017 • About Xinyi Solar Holdings Ltd (
$968) • By InTwits
Xinyi Solar Holdings Ltd is a growth stock in Energy-Alternate Sources industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Xinyi Solar Holdings Ltd showed fast growth in the last financial year. The company's revenue surged on 26.5% in FY2016. The growth also happened in EBITDA of 72.5% for the same period.
If we look for the longer period Xinyi Solar Holdings Ltd showed fast revenue growth of 45.1% from FY2013 to FY2016 annualy. EBITDA surged on 82.4% from FY2013 to FY2016 annualy.
Xinyi Solar Holdings Ltd ($968) financials for the last 5 years
| mln. HKD | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 1,533 | 1,968 | 2,410 | 4,750 | 6,007 |
|---|
| Revenue growth, % | | 28.3% | 22.5% | 97.1% | 26.5% |
|---|
| Gross margin, % | 17.2% | 30.1% | 31.6% | 36.0% | 45.8% |
|---|
| SG&A, % | 7.92% | 10.4% | 6.44% | 6.58% | 5.51% |
|---|
| EBITDA | 250 | 468 | 684 | 1,647 | 2,840 |
|---|
| EBITDA growth, % | | 87.0% | 46.1% | 140.7% | 72.5% |
|---|
| EBITDA margin, % | 16.3% | 23.8% | 28.4% | 34.7% | 47.3% |
|---|
| Net Income | 120 | 304 | 493 | 1,206 | 1,986 |
|---|
| Net Income margin, % | 7.82% | 15.4% | 20.5% | 25.4% | 33.1% |
|---|
| |
| CAPEX | 348 | 240 | 2,381 | 3,583 | 0 |
|---|
| CAPEX/Revenue, % | 22.7% | 12.2% | 98.8% | 75.4% | 0% |
|---|
| Debt | 0 | 0 | 1,300 | 3,590 | 6,666 |
|---|
| Cash | 54 | 279 | 543 | 2,869 | 843 |
|---|
| Net Debt/EBITDA | -0.2x | -0.6x | 1.1x | 0.4x | 2.1x |
|---|
| |
| ROIC, % | 13.8% | 21.6% | 16.9% | 18.7% | 19.7% |
|---|
| ROE, % | 12.1% | 18.0% | 17.6% | 26.6% | 33.2% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Xinyi Solar Holdings Ltd's EBITDA margin surged on 12.6 pp from 34.7% to 47.3% in FY2016. In the last 3 years EBITDA margin surged on 23.5 pp from 23.8% in FY2013 to 47.3% in FY2016.
We call Xinyi Solar Holdings Ltd an attractive growth stock as together with the growth it delivers high ROIC at 19.7%. During the last three years it decreased - it was 21.6% in FY2013. It's average ROIC for the last three years was 18.4%.
Xinyi Solar Holdings Ltd's Net Income margin surged on 7.70 pp from 25.4% to 33.1% in FY2016. In the last 3 years Xinyi Solar Holdings Ltd's Net Income margin surged on 17.7 pp from 15.4% in FY2013 to 33.1% in FY2016.
Xinyi Solar Holdings Ltd operates at ROE of 33.2%. It's average level of ROE for the last three years was 25.8%.
Capital expenditures (CAPEX)
In FY2016 the company had CAPEX/Revenue of 0%. Xinyi Solar Holdings Ltd's CAPEX/Revenue dropped on 12.2 pp from 12.2% in FY2013 to 0% in FY2016.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 2.1x Net Debt/EBITDA. In the last 3 years leverage surged on 2.65x from -0.60x in FY2013 to 2.05x in FY2016.
Valuation vs. comparable companies
The market closed today at 8.3x EV/EBITDA for Xinyi Solar Holdings Ltd which is 72.8% lower than 30.5x Energy-Alternate Sources peer group avearge calculated on the basis of 12 companies. At the end of trading day today Xinyi Solar Holdings Ltd traded at 8.9x P/E which is the same as 9.0x Energy-Alternate Sources peer group avearge calculated on the basis of 3 companies.
Management team
Lee Yau-Ching is a CEO of Xinyi Solar Holdings Ltd.
Peers in Energy-Alternate Sources
Below we provide Xinyi Solar Holdings Ltd benchmarking against other companies in Energy-Alternate Sources 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| HaiTian Hydropower International Ltd ($8261) | 26.6% | 8.5% | 114.0% | 220.2% | |
| United Photovoltaics Group Ltd ($686) | -74.0% | -83.5% | 1,168.8% | 66.2% | |
| Beijing Jingneng Clean Energy Co Ltd ($579) | 2.5% | 50.7% | 39.6% | 64.4% | |
| Canvest Environment Protection Group Co Ltd ($1381) | 150.6% | 0.8% | 103.5% | 49.2% | |
| China Renewable Energy Investment Ltd ($987) | 10.7% | 14.3% | -14.4% | 36.6% | |
| |
|---|
| Median (10 companies) | 7.5% | 12.8% | 36.5% | 29.1% | |
|---|
| Xinyi Solar Holdings Ltd ($968) | | 28.3% | 22.5% | 97.1% | 26.5% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| HaiTian Hydropower International Ltd ($8261) | 74.2% | 74.3% | 79.3% | 64.6% | |
| United Photovoltaics Group Ltd ($686) | -29.8% | 99.3% | 90.7% | 54.0% | |
| Canvest Environment Protection Group Co Ltd ($1381) | 53.4% | 51.9% | 43.1% | 37.1% | |
| China Renewable Energy Investment Ltd ($987) | 20.2% | 37.1% | 24.7% | 33.3% | |
| China Suntien Green Energy Corp Ltd ($956) | 33.5% | 31.3% | 25.2% | 26.5% | |
| |
|---|
| Median (7 companies) | 22.9% | 37.1% | 25.2% | 33.3% | |
|---|
| Xinyi Solar Holdings Ltd ($968) | 17.2% | 30.1% | 31.6% | 36.0% | 45.8% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| United Photovoltaics Group Ltd ($686) | -42.6% | -230.5% | 92.9% | 83.5% | |
| China Renewable Energy Investment Ltd ($987) | 54.1% | 66.1% | 64.3% | 74.3% | |
| HaiTian Hydropower International Ltd ($8261) | 61.9% | 75.9% | 80.2% | 69.0% | |
| China Longyuan Power Group Corp Ltd ($916) | 56.3% | 54.4% | 63.5% | 64.5% | |
| Canvest Environment Protection Group Co Ltd ($1381) | 59.3% | 56.6% | 50.3% | 41.8% | |
| |
|---|
| Median (10 companies) | 47.5% | 43.9% | 46.1% | 39.2% | |
|---|
| Xinyi Solar Holdings Ltd ($968) | 16.3% | 23.8% | 28.4% | 34.7% | 47.3% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| China Suntien Green Energy Corp Ltd ($956) | 41.4% | 25.7% | 35.9% | 128.8% | |
| China Longyuan Power Group Corp Ltd ($916) | 79.5% | 54.9% | 100.2% | 77.7% | |
| International Standard Resources Holdings Ltd ($91) | 51.5% | 2.4% | 11.1% | 69.3% | |
| Concord New Energy Group Ltd ($182) | 64.2% | 19.0% | 52.7% | 54.7% | |
| GCL-Poly Energy Holdings Ltd ($3800) | 19.9% | 13.6% | 23.5% | 42.8% | |
| |
|---|
| Median (10 companies) | 46.5% | 22.3% | 31.2% | 37.6% | |
|---|
| Xinyi Solar Holdings Ltd ($968) | 22.7% | 12.2% | 98.8% | 75.4% | |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| HaiTian Hydropower International Ltd ($8261) | 6.4% | 7.5% | 7.5% | 11.9% | |
| Canvest Environment Protection Group Co Ltd ($1381) | 27.0% | 18.1% | 12.4% | 10.0% | |
| Beijing Jingneng Clean Energy Co Ltd ($579) | 5.8% | 6.8% | 6.3% | 8.1% | |
| GCL-Poly Energy Holdings Ltd ($3800) | 0.3% | 2.8% | 6.9% | 7.2% | |
| China Longyuan Power Group Corp Ltd ($916) | 6.9% | 6.3% | 6.3% | 6.2% | |
| |
|---|
| Median (10 companies) | 4.4% | 5.2% | 6.0% | 6.0% | |
|---|
| Xinyi Solar Holdings Ltd ($968) | 13.8% | 21.6% | 16.9% | 18.7% | 19.7% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| United Photovoltaics Group Ltd ($686) | | | 7.8x | 13.2x | |
| China Suntien Green Energy Corp Ltd ($956) | 4.5x | 4.1x | 4.9x | 9.5x | |
| China Longyuan Power Group Corp Ltd ($916) | 5.5x | 5.3x | 5.8x | 5.7x | |
| GCL-Poly Energy Holdings Ltd ($3800) | 11.4x | 7.7x | 5.4x | 5.0x | |
| Beijing Jingneng Clean Energy Co Ltd ($579) | 6.7x | 6.3x | 6.7x | 4.4x | |
| |
|---|
| Median (9 companies) | 5.0x | 4.7x | 5.8x | 4.4x | |
|---|
| Xinyi Solar Holdings Ltd ($968) | -0.2x | -0.6x | 1.1x | 0.4x | 2.1x |
