China Resources Cement Holdings Ltd reports 30.6% Net Income growth while 4.2% Revenue decline
10/03/2017 • About China Resources Cement Holdings Ltd (
$1313) • By InTwits
China Resources Cement Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has business model with low profitability: ROIC is at 7.3%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is -8.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Resources Cement Holdings Ltd ($1313) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 25,345 | 29,341 | 32,669 | 26,779 | 25,647 | -4.2% |
| Gross Profit | 6,100 | 8,360 | 10,225 | 6,417 | 7,025 | 9.5% |
| SG&A | 3,031 | 4,361 | 4,493 | 4,196 | 3,999 | -4.7% |
| EBITDA | 5,176 | 6,216 | 8,262 | 4,679 | 5,258 | 12.4% |
| Net Income | 2,324 | 3,338 | 4,206 | 1,015 | 1,326 | 30.6% |
Balance Sheet
|
|---|
| Cash | 3,562 | 2,822 | 4,148 | 1,938 | 3,159 | 63.0% |
| Short Term Debt | 8,938 | 6,171 | 4,729 | 5,227 | 6,891 | 31.8% |
| Long Term Debt | 13,283 | 14,300 | 15,574 | 13,725 | 10,970 | -20.1% |
Cash flow
|
|---|
| Capex | 3,663 | 3,341 | 3,512 | 2,959 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 9.1% | 15.8% | 11.3% | -18.0% | -4.2% | |
| EBITDA growth | -17.1% | 20.1% | 32.9% | -43.4% | 12.4% | |
| Gross Margin | 24.1% | 28.5% | 31.3% | 24.0% | 27.4% | 3.4% |
| EBITDA Margin | 20.4% | 21.2% | 25.3% | 17.5% | 20.5% | 3.0% |
| Net Income Margin | 9.2% | 11.4% | 12.9% | 3.8% | 5.2% | 1.4% |
| SG&A, % of revenue | 12.0% | 14.9% | 13.8% | 15.7% | 15.6% | -0.1% |
| CAPEX, % of revenue | 14.5% | 11.4% | 10.8% | 11.1% | | -11.1% |
| ROIC | 8.0% | 9.6% | 13.0% | 5.5% | 7.3% | 1.8% |
| ROE | 11.4% | 14.5% | 15.9% | 3.7% | 5.0% | 1.3% |
| Net Debt/EBITDA | 3.6x | 2.8x | 2.0x | 3.6x | 2.8x | -0.8x |
Revenue and profitability
China Resources Cement Holdings Ltd's Revenue decreased on 4.2%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.0 pp from 17.5% to 20.5% in FY2016.
Gross Margin increased on 3.4 pp from 24.0% to 27.4% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased slightly on 1.4 pp from 3.8% to 5.2% in FY2016.
Return on investment
The company operates at low ROIC (7.28%) and ROE (5.04%). ROIC increased slightly on 1.8 pp from 5.5% to 7.3% in FY2016. ROE increased slightly on 1.3 pp from 3.7% to 5.0% in FY2016.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 3.6x to 2.8x in FY2016. Debt decreased on 5.8% while cash jumped on 63.0%.
Management team
China Resources Cement Holdings Ltd's CEO is Ji Youhong. Ji Youhong has 2 years tenure at the company. China Resources Cement Holdings Ltd's CFO Lau Chung Kwok "Robert" has spent 15 years at the company.
Appendix 1: Peers in Building Materials
Below you can find China Resources Cement Holdings Ltd benchmarking vs. other companies in Building Materials 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 |
|---|
| Pacific Plywood Hldg Ltd ($767) | -34.9% | -14.5% | 119.5% | 57.3% | |
| Far East Global Group Ltd ($830) | 52.9% | 9.5% | 18.6% | 30.5% | |
| WLS Holdings Ltd/Hong Kong ($8021) | | 9.4% | -11.1% | 22.0% | 13.8% |
| China Wood Optimization Holding Ltd ($8099) | 68.7% | 77.9% | 6.5% | 18.9% | |
| Steed Oriental Holdings Co Ltd ($8277) | | -4.2% | 11.0% | 9.4% | -21.5% |
| |
|---|
| Median (25 companies) | -3.5% | 9.5% | 6.5% | -14.1% | 12.8% |
|---|
| China Resources Cement Holdings Ltd ($1313) | | 15.8% | 11.3% | -18.0% | -4.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 91.4% | 82.0% | 97.2% | 98.6% | |
| Sustainable Forest Holdings Ltd ($723) | -2.4% | 12.1% | 19.7% | 55.2% | 83.9% |
| Dongpeng Holdings Co Ltd ($3386) | 35.6% | 37.1% | 38.5% | 39.1% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 37.2% | 36.9% | 37.0% | 36.4% | |
| Anhui Conch Cement Co Ltd ($914) | 27.3% | 32.5% | 33.2% | 26.9% | |
| |
|---|
| Median (25 companies) | 19.5% | 21.9% | 20.7% | 15.0% | 15.3% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 24.1% | 28.5% | 31.3% | 24.0% | 27.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pacific Plywood Hldg Ltd ($767) | 12.6% | -19.8% | 50.5% | 34.7% | |
| China Tianrui Group Cement Co Ltd ($1252) | 28.5% | 23.7% | 26.7% | 32.8% | |
| Anhui Conch Cement Co Ltd ($914) | 27.1% | 31.1% | 32.1% | 29.7% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 30.4% | 29.9% | 23.8% | 26.2% | |
| Dongpeng Holdings Co Ltd ($3386) | 14.3% | 21.5% | 22.6% | 24.4% | |
| |
|---|
| Median (25 companies) | 14.3% | 14.5% | 16.5% | 13.6% | -0.6% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 20.4% | 21.2% | 25.3% | 17.5% | 20.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Wood Optimization Holding Ltd ($8099) | 10.9% | 9.6% | 1.8% | 19.3% | |
| China Shanshui Cement Group Ltd ($691) | 18.9% | 21.1% | 12.1% | 14.3% | |
| Luks Group Vietnam Holdings Co Ltd ($366) | 0.6% | 0.5% | 4.1% | 14.2% | |
| China Glass Holdings Ltd ($3300) | 19.6% | 12.5% | 12.4% | 13.5% | |
| WLS Holdings Ltd/Hong Kong ($8021) | 6.0% | 6.6% | 7.9% | 11.5% | 1.5% |
| |
|---|
| Median (25 companies) | 9.5% | 8.0% | 5.5% | 6.4% | 1.3% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 14.5% | 11.4% | 10.8% | 11.1% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dongpeng Holdings Co Ltd ($3386) | 37.1% | 35.8% | 27.2% | 26.6% | |
| China Wood Optimization Holding Ltd ($8099) | 33.5% | 27.3% | 17.7% | 17.7% | |
| China Lesso Group Holdings Ltd ($2128) | 20.5% | 19.4% | 18.2% | 17.2% | 16.5% |
| Anhui Conch Cement Co Ltd ($914) | 12.7% | 17.5% | 18.4% | 11.7% | |
| Hong Wei Asia Holdings Co Ltd ($8191) | 17.0% | 5.2% | 9.3% | 8.6% | |
| |
|---|
| Median (25 companies) | 5.0% | 6.0% | 4.8% | 1.2% | -1.4% |
|---|
| China Resources Cement Holdings Ltd ($1313) | 8.0% | 9.6% | 13.0% | 5.5% | 7.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Tianrui Group Cement Co Ltd ($1252) | 4.2x | 5.1x | 5.2x | 7.9x | |
| BBMG Corp ($2009) | 4.6x | 5.0x | 6.1x | 6.6x | |
| Asia Cement China Holdings Corp ($743) | 3.2x | 2.7x | 2.8x | 5.1x | |
| West China Cement Ltd ($2233) | 3.3x | 2.9x | 3.6x | 4.2x | |
| China Singyes Solar Technologies Holdings Ltd ($750) | 0.9x | 0.8x | 1.8x | 4.0x | |
| |
|---|
| Median (15 companies) | 2.1x | 1.1x | 1.8x | 3.3x | -85.3x |
|---|
| China Resources Cement Holdings Ltd ($1313) | 3.6x | 2.8x | 2.0x | 3.6x | 2.8x |
