CGN Power Co Ltd reports 41.4% revenue growth in FY2016 and 6.5 pp EBITDA Margin decline from 59.4% to 52.9%
15/03/2017 • About CGN Power Co Ltd (
$1816) • By InTwits
CGN Power Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 52.9% in FY2016 vs. 59.4% in FY2015 vs. 66.0% in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.5%
- It operates with high leverage: Net Debt/EBITDA is 9.3x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CGN Power Co Ltd ($1816) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17,575 | 17,365 | 20,719 | 23,263 | 32,890 | 41.4% |
| Gross Profit | 8,170 | 8,148 | 10,076 | 11,133 | 14,357 | 29.0% |
| SG&A | 921 | 1,031 | 1,523 | 1,683 | 2,358 | 40.1% |
| EBITDA | 11,601 | 10,863 | 12,527 | 13,807 | 17,385 | 25.9% |
| Net Income | 4,145 | 4,195 | 6,193 | 6,594 | 7,287 | 10.5% |
Balance Sheet
|
|---|
| Cash | 5,434 | 6,640 | 26,963 | 7,179 | 8,457 | 17.8% |
| Short Term Debt | 25,349 | 13,098 | 15,272 | 14,115 | 35,029 | 148.2% |
| Long Term Debt | 55,332 | 66,251 | 109,098 | 109,156 | 135,466 | 24.1% |
Cash flow
|
|---|
| Capex | 8,344 | 9,936 | 19,587 | 11,641 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 10.7% | -1.2% | 19.3% | 12.3% | 41.4% | |
| EBITDA growth | 13.7% | -6.4% | 15.3% | 10.2% | 25.9% | |
| Gross Margin | 46.5% | 46.9% | 48.6% | 47.9% | 43.7% | -4.2% |
| EBITDA Margin | 66.0% | 62.6% | 60.5% | 59.4% | 52.9% | -6.5% |
| Net Income Margin | 23.6% | 24.2% | 29.9% | 28.3% | 22.2% | -6.2% |
| SG&A, % of revenue | 5.2% | 5.9% | 7.4% | 7.2% | 7.2% | -0.1% |
| CAPEX, % of revenue | 47.5% | 57.2% | 94.5% | 50.0% | | -50.0% |
| ROIC | 9.4% | 7.7% | 6.1% | 5.1% | 5.5% | 0.4% |
| ROE | 24.6% | 21.3% | 15.0% | 11.4% | 12.9% | 1.5% |
| Net Debt/EBITDA | 6.5x | 6.7x | 7.8x | 8.4x | 9.3x | 0.9x |
Revenue and profitability
CGN Power Co Ltd's Revenue jumped on 41.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.2 pp from 30.5% to 33.7% in FY2016.
Gross Margin decreased on 4.2 pp from 47.9% to 43.7% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 6.2 pp from 28.3% to 22.2% in FY2016.
Return on investment
The company operates at good ROE (12.88%) while ROIC is low (5.54%). ROIC showed almost no change in FY2016. ROE increased slightly on 1.5 pp from 11.4% to 12.9% in FY2016.
Leverage (Debt)
Debt level is 9.3x Net Debt / EBITDA and 9.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.9x from 8.4x to 9.3x in FY2016. Debt jumped on 38.3% while cash surged on 17.8%.
Appendix 1: Peers in Electric
Below you can find CGN Power Co Ltd benchmarking vs. other companies in Electric 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 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 26.0% | 46.7% | 4.1% | 19.6% | |
| Huadian Fuxin Energy Corp Ltd ($816) | 56.0% | 16.7% | 4.9% | 10.4% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 14.1% | 28.9% | -7.9% | 7.8% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 2.1% | -1.8% | 2.9% | 6.7% | |
| China Power New Energy Development Co Ltd ($735) | -2.3% | 20.3% | 7.2% | 2.6% | |
| |
|---|
| Median (15 companies) | 5.8% | 11.8% | 4.9% | -3.5% | -4.1% |
|---|
| CGN Power Co Ltd ($1816) | | -1.2% | 19.3% | 12.3% | 41.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Power Assets Holdings Ltd ($6) | 60.0% | 63.5% | 85.6% | 99.4% | |
| China Power New Energy Development Co Ltd ($735) | 73.3% | 70.8% | 72.0% | 74.9% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 60.1% | 58.6% | 54.0% | 53.7% | |
| Tianjin Development Hldgs Ltd ($882) | 8.5% | 5.0% | 18.7% | 18.6% | |
| CNNC International Ltd ($2302) | 9.0% | 12.3% | 7.6% | 2.7% | |
| |
|---|
| Median (5 companies) | 34.5% | 58.6% | 40.6% | 53.7% | |
|---|
| CGN Power Co Ltd ($1816) | 46.5% | 46.9% | 48.6% | 47.9% | 43.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huaneng Renewables Corp Ltd ($958) | 94.0% | 80.5% | 91.3% | 93.1% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 90.5% | 82.8% | 87.0% | 82.4% | |
| HK Electric Investments & HK Electric Investments Ltd ($2638) | 72.6% | 77.6% | 73.3% | 71.7% | |
| Power Assets Holdings Ltd ($6) | 66.2% | 68.0% | 2,533.1% | 71.2% | |
| China Power New Energy Development Co Ltd ($735) | 54.6% | 51.6% | 54.5% | 55.1% | |
| |
|---|
| Median (15 companies) | 28.5% | 33.9% | 34.1% | 41.9% | 30.2% |
|---|
| CGN Power Co Ltd ($1816) | 66.0% | 62.6% | 60.5% | 59.4% | 52.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerchina Holdings Ltd ($622) | 24.1% | 28.3% | 3.8% | 321.6% | |
| Huaneng Renewables Corp Ltd ($958) | 163.4% | 124.0% | 217.8% | 171.9% | |
| China Power New Energy Development Co Ltd ($735) | 82.2% | 80.1% | 119.5% | 99.0% | |
| Huadian Fuxin Energy Corp Ltd ($816) | 62.2% | 54.3% | 91.8% | 96.0% | |
| China Datang Corp Renewable Power Co Ltd ($1798) | 157.1% | 81.7% | 106.3% | 93.4% | |
| |
|---|
| Median (15 companies) | 27.4% | 26.7% | 15.8% | 20.0% | 12.3% |
|---|
| CGN Power Co Ltd ($1816) | 47.5% | 57.2% | 94.5% | 50.0% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CLP Holdings Ltd ($2) | 7.0% | 4.8% | 8.5% | 12.8% | 10.1% |
| China Resources Power Holdings Co Ltd ($836) | 7.7% | 9.7% | 8.0% | 11.0% | |
| China Power International Development Ltd ($2380) | 5.7% | 7.5% | 8.0% | 10.1% | |
| Huadian Power International Corp Ltd ($1071) | 5.0% | 8.4% | 10.4% | 10.0% | |
| Amber Energy Ltd ($90) | 5.4% | 4.6% | 3.6% | 8.6% | |
| |
|---|
| Median (15 companies) | 5.0% | 5.8% | 6.0% | 5.5% | 7.7% |
|---|
| CGN Power Co Ltd ($1816) | 9.4% | 7.7% | 6.1% | 5.1% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Meiya Power Holdings Co Ltd ($1811) | 9.1x | 8.1x | 4.3x | 8.6x | 6.5x |
| China Datang Corp Renewable Power Co Ltd ($1798) | 9.1x | 8.2x | 8.7x | 8.5x | |
| China Power New Energy Development Co Ltd ($735) | 4.8x | 5.5x | 6.4x | 7.9x | |
| Huadian Fuxin Energy Corp Ltd ($816) | 6.9x | 6.2x | 6.5x | 7.4x | |
| Huaneng Renewables Corp Ltd ($958) | 7.7x | 6.6x | 7.3x | 7.1x | |
| |
|---|
| Median (13 companies) | 5.3x | 5.5x | 4.9x | 5.1x | 4.2x |
|---|
| CGN Power Co Ltd ($1816) | 6.5x | 6.7x | 7.8x | 8.4x | 9.3x |
