West China Cement Ltd EBITDA jumped on 59.0% in 2016 and Revenue increased on 6.2%
13/03/2017 • About West China Cement Ltd (
$2233) • By InTwits
West China Cement Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has potentially unprofitable business model: ROIC is at 5.6%
- It operates with high leverage: Net Debt/EBITDA is 1.5x while industry average is -8.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
West China Cement Ltd ($2233) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,524 | 4,168 | 3,883 | 3,501 | 3,719 | 6.2% |
| Gross Profit | 675 | 729 | 598 | 463 | 677 | 46.0% |
| SG&A | 235 | 279 | 294 | 314 | 285 | -9.2% |
| EBITDA | 1,056 | 1,189 | 989 | 822 | 1,306 | 59.0% |
| Net Income | 365 | 378 | 36 | -309 | 10 | |
Balance Sheet
|
|---|
| Cash | 369 | 507 | 496 | 455 | 1,259 | 176.7% |
| Short Term Debt | 1,257 | 709 | 745 | 1,337 | 465 | -65.3% |
| Long Term Debt | 2,613 | 3,208 | 3,288 | 2,566 | 2,749 | 7.1% |
Cash flow
|
|---|
| Capex | 607 | 581 | 618 | 353 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 10.5% | 18.3% | -6.8% | -9.8% | 6.2% | |
| EBITDA growth | -9.0% | 12.5% | -16.8% | -16.9% | 59.0% | |
| Gross Margin | 19.2% | 17.5% | 15.4% | 13.2% | 18.2% | 5.0% |
| EBITDA Margin | 30.0% | 28.5% | 25.5% | 23.5% | 35.1% | 11.7% |
| Net Income Margin | 10.4% | 9.1% | 0.9% | -8.8% | 0.3% | 9.1% |
| SG&A, % of revenue | 6.7% | 6.7% | 7.6% | 9.0% | 7.7% | -1.3% |
| CAPEX, % of revenue | 17.2% | 13.9% | 15.9% | 10.1% | | -10.1% |
| ROIC | 7.3% | 6.9% | 4.0% | 1.3% | 5.6% | 4.4% |
| ROE | 8.3% | 7.7% | 0.7% | -5.7% | 0.2% | 5.9% |
| Net Debt/EBITDA | 3.3x | 2.9x | 3.6x | 4.2x | 1.5x | -2.7x |
Revenue and profitability
The company's Revenue increased on 6.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.4 pp from 26.8% to 22.4% in FY2016.
Gross Margin increased on 5.0 pp from 13.2% to 18.2% in FY2016. SG&A as a % of Revenue decreased slightly on 1.3 pp from 9.0% to 7.7% in FY2016.
Net Income marign increased on 9.1 pp from -8.8% to 0.28% in FY2016.
Return on investment
The company operates at low ROIC (5.64%) and ROE (0.18%). ROIC increased on 4.4 pp from 1.3% to 5.6% in FY2016. ROE increased on 5.9 pp from -5.7% to 0.18% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.5x and Debt / EBITDA is 2.5x. Net Debt / EBITDA dropped on 2.7x from 4.2x to 1.5x in FY2016. Debt dropped on 17.7% while cash jumped on 177%.
Appendix 1: Peers in Building Materials
Below you can find West China Cement 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) | -4.2% | 9.5% | 9.9% | -14.4% | 4.3% |
|---|
| West China Cement Ltd ($2233) | | 18.3% | -6.8% | -9.8% | 6.2% |
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) | 20.6% | 22.1% | 20.9% | 15.4% | 21.0% |
|---|
| West China Cement Ltd ($2233) | 19.2% | 17.5% | 15.4% | 13.2% | 18.2% |
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% | -0.0% |
|---|
| West China Cement Ltd ($2233) | 30.0% | 28.5% | 25.5% | 23.5% | 35.1% |
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% |
|---|
| West China Cement Ltd ($2233) | 17.2% | 13.9% | 15.9% | 10.1% | |
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% | 5.7% | 1.3% | -1.0% |
|---|
| West China Cement Ltd ($2233) | 7.3% | 6.9% | 4.0% | 1.3% | 5.6% |
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 | |
| China Singyes Solar Technologies Holdings Ltd ($750) | 0.9x | 0.8x | 1.8x | 4.0x | |
| Far East Global Group Ltd ($830) | | | | 4.0x | |
| |
|---|
| Median (15 companies) | 2.1x | 1.1x | 1.8x | 3.3x | 0.3x |
|---|
| West China Cement Ltd ($2233) | 3.3x | 2.9x | 3.6x | 4.2x | 1.5x |
