Towngas China Co Ltd Net Income jumped on 20.7% in 2016 and EBITDA Margin increased on 4.7 pp from 19.2% to 23.9%
15/03/2017 • About Towngas China Co Ltd (
$1083) • By InTwits
Towngas China Co 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 5.2%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 2.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Towngas China Co Ltd ($1083) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,183 | 6,716 | 7,882 | 7,718 | 7,181 | -7.0% |
| EBITDA | 1,029 | 1,268 | 1,481 | 1,484 | 1,719 | 15.9% |
| Net Income | 841 | 1,106 | 1,054 | 807 | 974 | 20.7% |
Balance Sheet
|
|---|
| Cash | 2,479 | 2,230 | 1,452 | 2,138 | 1,351 | -36.8% |
| Short Term Debt | 1,946 | 2,419 | 2,483 | 3,183 | 2,653 | -16.7% |
| Long Term Debt | 4,139 | 4,482 | 5,069 | 5,585 | 5,184 | -7.2% |
Cash flow
|
|---|
| Capex | 1,625 | 1,724 | 2,064 | 2,035 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 20.0% | 29.6% | 17.4% | -2.1% | -7.0% | |
| EBITDA growth | 23.5% | 23.2% | 16.8% | 0.2% | 15.9% | |
| EBITDA Margin | 19.9% | 18.9% | 18.8% | 19.2% | 23.9% | 4.7% |
| Net Income Margin | 16.2% | 16.5% | 13.4% | 10.5% | 13.6% | 3.1% |
| CAPEX, % of revenue | 31.3% | 25.7% | 26.2% | 26.4% | | -26.4% |
| ROIC | 4.5% | 4.8% | 4.9% | 4.4% | 5.2% | 0.8% |
| ROE | 8.4% | 9.6% | 8.2% | 6.0% | 7.2% | 1.2% |
| Net Debt/EBITDA | 3.5x | 3.7x | 4.1x | 4.5x | 3.8x | -0.7x |
Revenue and profitability
Towngas China Co Ltd's Revenue decreased on 7.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from 19.2% to 23.9% in FY2016.
Net Income marign increased on 3.1 pp from 10.5% to 13.6% in FY2016.
Return on investment
The company operates at low ROIC (5.21%) and ROE (7.22%). ROIC increased slightly on 0.82 pp from 4.4% to 5.2% in FY2016. ROE increased slightly on 1.2 pp from 6.0% to 7.2% in FY2016.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 4.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 4.5x to 3.8x in FY2016. Debt dropped on 10.6% while cash dropped on 36.8%.
Management team
Towngas China Co Ltd's CEO Wong Wai Yee "Peter" has spent 11 years at the company.
Appendix 1: Peers in Gas
Below you can find Towngas China Co Ltd benchmarking vs. other companies in Gas 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 |
|---|
| Beijing Enterprises Holdings Ltd ($392) | 16.7% | 19.1% | 13.2% | 25.5% | |
| China Gas Holdings Ltd ($384) | | -5.2% | 44.8% | 21.8% | -8.0% |
| ENN Energy Holdings Ltd ($2688) | 19.6% | 27.4% | 26.7% | 10.2% | |
| China Resources Gas Group Ltd ($1193) | -4.1% | 63.6% | 28.8% | 8.3% | |
| Suchuang Gas Corp Ltd ($1430) | 10.3% | 26.9% | 18.4% | 1.3% | |
| |
|---|
| Median (9 companies) | 11.4% | 27.1% | 18.4% | 1.3% | -8.0% |
|---|
| Towngas China Co Ltd ($1083) | | 29.6% | 17.4% | -2.1% | -7.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Resources Gas Group Ltd ($1193) | 31.2% | 34.2% | 30.3% | 31.5% | |
| Suchuang Gas Corp Ltd ($1430) | 28.9% | 30.1% | 24.2% | 25.2% | |
| ENN Energy Holdings Ltd ($2688) | 26.9% | 23.8% | 20.9% | 21.4% | |
| Binhai Investment Co Ltd ($2886) | 20.1% | 20.6% | 18.3% | 21.3% | |
| China Gas Holdings Ltd ($384) | 19.0% | 21.0% | 20.3% | 20.4% | 24.1% |
| |
|---|
| Median (8 companies) | 21.6% | 21.8% | 19.3% | 20.8% | 17.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong & China Gas Co Ltd ($3) | 30.0% | 29.6% | 29.2% | 30.7% | |
| Suchuang Gas Corp Ltd ($1430) | 30.2% | 30.5% | 24.9% | 24.0% | |
| Binhai Investment Co Ltd ($2886) | 14.8% | 17.0% | 15.2% | 20.7% | |
| China Resources Gas Group Ltd ($1193) | 16.2% | 17.4% | 17.7% | 19.0% | |
| China Gas Holdings Ltd ($384) | 15.2% | 16.5% | 16.6% | 16.8% | 20.3% |
| |
|---|
| Median (10 companies) | 18.3% | 17.2% | 16.6% | 16.7% | -42.7% |
|---|
| Towngas China Co Ltd ($1083) | 19.9% | 18.9% | 18.8% | 19.2% | 23.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hong Kong & China Gas Co Ltd ($3) | 23.7% | 18.7% | 20.1% | 21.5% | |
| Binhai Investment Co Ltd ($2886) | 26.9% | 18.0% | 15.5% | 16.7% | |
| China Resources Gas Group Ltd ($1193) | 20.6% | 18.5% | 12.4% | 12.3% | |
| China Gas Holdings Ltd ($384) | 9.4% | 13.7% | 12.3% | 12.3% | 10.2% |
| China Oil & Gas Group Ltd ($603) | 15.0% | 18.3% | 15.4% | 11.1% | |
| |
|---|
| Median (10 companies) | 18.3% | 14.9% | 12.3% | 9.6% | 6.5% |
|---|
| Towngas China Co Ltd ($1083) | 31.3% | 25.7% | 26.2% | 26.4% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Suchuang Gas Corp Ltd ($1430) | 13.6% | 19.4% | 23.9% | 20.8% | |
| Binhai Investment Co Ltd ($2886) | 12.2% | 12.2% | 10.9% | 14.7% | |
| ENN Energy Holdings Ltd ($2688) | 14.3% | 11.7% | 16.4% | 13.6% | |
| China Resources Gas Group Ltd ($1193) | 6.9% | 10.4% | 11.4% | 12.5% | |
| China Gas Holdings Ltd ($384) | 8.4% | 8.6% | 10.6% | 10.6% | 11.2% |
| |
|---|
| Median (10 companies) | 8.0% | 11.0% | 9.1% | 8.8% | -24.6% |
|---|
| Towngas China Co Ltd ($1083) | 4.5% | 4.8% | 4.9% | 4.4% | 5.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Oil & Gas Group Ltd ($603) | -0.0x | 1.0x | 2.8x | 6.0x | |
| Beijing Enterprises Holdings Ltd ($392) | 3.1x | 2.6x | 4.7x | 3.6x | |
| China Gas Holdings Ltd ($384) | 3.7x | 3.7x | 3.1x | 2.9x | 2.8x |
| Binhai Investment Co Ltd ($2886) | 3.4x | 2.8x | 3.5x | 2.8x | |
| Hong Kong & China Gas Co Ltd ($3) | 2.6x | 2.8x | 2.1x | 2.3x | |
| |
|---|
| Median (9 companies) | 2.9x | 1.9x | 2.4x | 2.3x | 2.8x |
|---|
| Towngas China Co Ltd ($1083) | 3.5x | 3.7x | 4.1x | 4.5x | 3.8x |
