Sinopec Shanghai Petrochemical Co Ltd reports 83.5% Net Income growth and 4.6 pp EBITDA Margin growth from 8.2% to 12.7%
15/03/2017 • About Sinopec Shanghai Petrochemical Co Ltd (
$338) • By InTwits
Sinopec Shanghai Petrochemical Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 12.7% in 2016, 8.2% in 2015, 1.8% in 2014, 4.4% in 2013, -0.1% in 2012
- Sinopec Shanghai Petrochemical Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 901 in 2016, 695 in 2015, 1,089 in 2014, 1,323 in 2013, 4,260 in 2012
- The company has highly profitable business model: ROIC is at 26.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sinopec Shanghai Petrochemical Co Ltd ($338) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 87,217 | 105,503 | 92,725 | 67,092 | 65,988 | -1.6% |
| Gross Profit | -1,401 | 2,277 | -185 | 7,003 | 10,245 | 46.3% |
| SG&A | 650 | 691 | 564 | 2,998 | 2,978 | -0.7% |
| EBITDA | -84 | 4,664 | 1,708 | 5,478 | 8,393 | 53.2% |
| Net Income | -1,528 | 2,055 | -692 | 3,246 | 5,956 | 83.5% |
Balance Sheet
|
|---|
| Cash | 161 | 133 | 279 | 1,077 | 5,441 | 405.0% |
| Short Term Debt | 11,024 | 7,094 | 4,078 | 2,070 | 551 | -73.4% |
| Long Term Debt | 1,231 | 628 | 1,633 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 4,260 | 1,323 | 1,089 | 695 | 901 | 29.7% |
Ratios
|
|---|
| Revenue growth | -2.7% | 21.0% | -12.1% | -27.6% | -1.6% | |
| EBITDA growth | -103.1% | -5,629.3% | -63.4% | 220.8% | 53.2% | |
| Gross Margin | -1.6% | 2.2% | -0.2% | 10.4% | 15.5% | 5.1% |
| EBITDA Margin | -0.1% | 4.4% | 1.8% | 8.2% | 12.7% | 4.6% |
| Net Income Margin | -1.8% | 1.9% | -0.7% | 4.8% | 9.0% | 4.2% |
| SG&A, % of revenue | 0.7% | 0.7% | 0.6% | 4.5% | 4.5% | 0.0% |
| CAPEX, % of revenue | 4.9% | 1.3% | 1.2% | 1.0% | 1.4% | 0.3% |
| ROIC | -6.9% | 8.1% | -2.4% | 16.5% | 26.3% | 9.8% |
| ROE | -9.0% | 12.2% | -4.0% | 17.9% | 26.7% | 8.8% |
| Net Debt/EBITDA | | 1.6x | 3.2x | 0.2x | -0.6x | -0.8x |
Revenue and profitability
Sinopec Shanghai Petrochemical Co Ltd's Revenue decreased slightly on 1.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.6 pp from 8.2% to 12.7% in 2016.
Gross Margin increased on 5.1 pp from 10.4% to 15.5% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 4.2 pp from 4.8% to 9.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.4% in 2016. Sinopec Shanghai Petrochemical Co Ltd showed almost no change in CAPEX/Revenue from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at high and attractive ROIC (26.35%) and ROE (26.71%). ROIC increased on 9.8 pp from 16.5% to 26.3% in 2016. ROE increased on 8.8 pp from 17.9% to 26.7% in 2016.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 0.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 0.2x to -0.6x in 2016. Debt dropped on 73.4% while cash jumped on 405%.
Appendix 1: Peers in Chemicals
Below you can find Sinopec Shanghai Petrochemical Co Ltd benchmarking vs. other companies in Chemicals 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 |
|---|
| Bestway International Holdings Ltd ($718) | | -62.1% | 330.3% | 238.4% | 14,591.4% |
| China First Chemical Holdings Ltd ($2121) | 6.2% | -6.8% | -18.0% | 72.5% | |
| Strong Petrochemical Holdings Ltd ($852) | 40.8% | 87.9% | -60.8% | 42.3% | |
| Ko Yo Chemical Group Ltd ($827) | -5.6% | -0.6% | 2.3% | 40.8% | |
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 16.0% | 63.5% | -7.7% | 36.6% | |
| |
|---|
| Median (31 companies) | 2.4% | 8.5% | 2.2% | -1.2% | 0.8% |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | | 21.0% | -12.1% | -27.6% | -1.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huabao International Holdings Ltd ($336) | 70.5% | 69.1% | 70.8% | 69.9% | 68.9% |
| China Flavors & Fragrances Co Ltd ($3318) | 46.8% | 48.6% | 47.8% | 48.9% | |
| Bestway International Holdings Ltd ($718) | 5.1% | 4.6% | 8.6% | 40.4% | 7.1% |
| Bracell Ltd ($1768) | 30.5% | 37.3% | 37.3% | 38.4% | |
| Shaanxi Northwest New Technology Industry Co Ltd ($8258) | 28.7% | 30.9% | 30.0% | 37.9% | |
| |
|---|
| Median (31 companies) | 20.8% | 18.7% | 18.4% | 18.8% | 24.3% |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | -1.6% | 2.2% | -0.2% | 10.4% | 15.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huabao International Holdings Ltd ($336) | 63.8% | 59.1% | 60.0% | 58.3% | 51.2% |
| Bracell Ltd ($1768) | 22.3% | 30.8% | 38.2% | 35.9% | |
| Yingde Gases Group Co Ltd ($2168) | 29.4% | 29.8% | 32.3% | 33.4% | |
| Tiande Chemical Holdings Ltd ($609) | 25.5% | 27.3% | 25.1% | 27.8% | |
| Century Sunshine Group Holdings Ltd ($509) | 24.2% | 28.1% | 27.6% | 26.1% | |
| |
|---|
| Median (31 companies) | 14.5% | 13.6% | 12.5% | 12.5% | 7.9% |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | -0.1% | 4.4% | 1.8% | 8.2% | 12.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Landing International Development Ltd ($582) | 7.2% | 29.6% | 419.5% | 247.4% | |
| China Zenith Chemical Group Ltd ($362) | 147.3% | 55.7% | 67.4% | 152.2% | 191.4% |
| Smartac Group China Holdings Ltd ($395) | 14.0% | 4.7% | 49.3% | 52.4% | |
| China Flavors & Fragrances Co Ltd ($3318) | 15.8% | 20.1% | 42.4% | 35.8% | |
| Ko Yo Chemical Group Ltd ($827) | 45.2% | 43.2% | 20.7% | 27.5% | |
| |
|---|
| Median (31 companies) | 8.4% | 8.9% | 5.8% | 8.1% | 3.5% |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | 4.9% | 1.3% | 1.2% | 1.0% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huabao International Holdings Ltd ($336) | 28.7% | 25.2% | 26.2% | 23.3% | 17.1% |
| Tiande Chemical Holdings Ltd ($609) | 26.2% | 29.4% | 20.7% | 20.6% | |
| Century Sunshine Group Holdings Ltd ($509) | 11.3% | 15.9% | 16.4% | 13.3% | |
| Infinity Chemical Holdings Co Ltd ($640) | 11.1% | 10.2% | 8.8% | 12.7% | 7.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | -1.3% | 2.6% | 5.9% | 11.6% | |
| |
|---|
| Median (31 companies) | 7.3% | 8.0% | 5.9% | 4.8% | 4.3% |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | -6.9% | 8.1% | -2.4% | 16.5% | 26.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ko Yo Chemical Group Ltd ($827) | 8.8x | 22.0x | | 141.5x | |
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.2x | 4.6x | 18.1x | 13.5x | |
| Sinofert Holdings Ltd ($297) | 2.9x | 32.4x | 5.0x | 8.4x | |
| Ngai Hing Hong Co Ltd ($1047) | 11.7x | 5.3x | 5.4x | 5.3x | 7.1x |
| China XLX Fertiliser Ltd ($1866) | 2.6x | 5.1x | 5.8x | 5.1x | |
| |
|---|
| Median (26 companies) | 1.2x | 2.2x | 1.3x | 2.0x | -0.1x |
|---|
| Sinopec Shanghai Petrochemical Co Ltd ($338) | | 1.6x | 3.2x | 0.2x | -0.6x |
