Hengshi Mining Investments Ltd Net Income jumped on 136% and Revenue showed almost no change
16/03/2017 • About Hengshi Mining Investments Ltd (
$1370) • By InTwits
Hengshi Mining Investments 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 7.9%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hengshi Mining Investments Ltd ($1370) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 582 | 1,286 | 1,108 | 754 | 757 | 0.5% |
| Gross Profit | 188 | 711 | 555 | 266 | 269 | 0.9% |
| SG&A | 103 | 112 | 159 | 135 | 110 | -18.3% |
| EBITDA | 132 | 669 | 504 | 266 | 277 | 4.1% |
| Net Income | 48 | 398 | 263 | -235 | 86 | |
Balance Sheet
|
|---|
| Cash | 23 | 988 | 167 | 59 | 47 | -21.7% |
| Short Term Debt | 0 | 40 | 155 | 206 | 356 | 72.8% |
| Long Term Debt | 0 | 270 | 277 | 230 | 198 | -14.0% |
Cash flow
|
|---|
| Capex | 183 | 260 | 266 | 195 | | -100.0% |
Ratios
|
|---|
| Revenue growth | -24.8% | 121.1% | -13.8% | -32.0% | 0.5% | |
| EBITDA growth | -62.5% | 405.2% | -24.7% | -47.2% | 4.1% | |
| Gross Margin | 32.4% | 55.3% | 50.1% | 35.3% | 35.5% | 0.2% |
| EBITDA Margin | 22.8% | 52.0% | 45.4% | 35.3% | 36.6% | 1.3% |
| Net Income Margin | 8.3% | 30.9% | 23.7% | -31.2% | 11.3% | 42.5% |
| SG&A, % of revenue | 17.8% | 8.7% | 14.3% | 17.9% | 14.6% | -3.4% |
| CAPEX, % of revenue | 31.4% | 20.2% | 24.0% | 25.8% | | -25.8% |
| ROIC | 50.1% | 60.1% | 20.7% | 7.9% | 7.9% | -0.0% |
| ROE | 35.8% | 49.8% | 16.9% | -15.2% | 5.4% | 20.6% |
| Net Debt/EBITDA | -0.2x | -1.0x | 0.5x | 1.4x | 1.8x | 0.4x |
Revenue and profitability
The company's Revenue showed almost no change in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.8 pp from -10.1% to -6.3% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased on 3.4 pp from 17.9% to 14.6% in FY2016.
Net Income marign jumped on 42.5 pp from -31.2% to 11.3% in FY2016.
Return on investment
The company operates at low ROIC (7.90%) and ROE (5.41%). ROIC showed almost no change in FY2016. ROE jumped on 20.6 pp from -15.2% to 5.4% in FY2016.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 1.4x to 1.8x in FY2016. Debt surged on 27.0% while cash dropped on 21.7%.
Appendix 1: Peers in Mining
Below we provide Hengshi Mining Investments Ltd benchmarking against other companies in Mining industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 89.7% | -95.8% | 2,361.6% | 1,178.3% |
| Real Gold Mining Ltd ($246) | -44.0% | -68.0% | -26.2% | 106.2% | |
| REX Global Entertainment Holdings Ltd ($164) | | 81.6% | -15.5% | 96.4% | 30.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | 3,467.3% | 78.0% | |
| Zijin Mining Group Co Ltd ($2899) | 21.6% | 2.5% | 18.1% | 26.9% | |
| |
|---|
| Median (47 companies) | 6.7% | -1.7% | -5.1% | -14.0% | 6.2% |
|---|
| Hengshi Mining Investments Ltd ($1370) | | 121.1% | -13.8% | -32.0% | 0.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 2.5% | 5.1% | 39.6% | 93.0% | 87.4% |
| REX Global Entertainment Holdings Ltd ($164) | -15.8% | -7.8% | -0.8% | 88.6% | 87.3% |
| China Billion Resources Ltd ($274) | 71.4% | 47.2% | 73.4% | 79.7% | |
| Sun International Resources Ltd ($8029) | 83.2% | 73.1% | 64.8% | 69.4% | 58.8% |
| Grand T G Gold Holdings Ltd ($8299) | | | | 57.3% | 59.0% |
| |
|---|
| Median (49 companies) | 14.4% | 13.8% | 15.4% | 14.3% | 28.2% |
|---|
| Hengshi Mining Investments Ltd ($1370) | 32.4% | 55.3% | 50.1% | 35.3% | 35.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| G-Resources Group Ltd ($1051) | | 54.5% | 53.4% | 58.3% | |
| Grand T G Gold Holdings Ltd ($8299) | | | | 53.7% | 58.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 70.0% | 64.6% | 59.6% | 51.3% | |
| Timeless Software Ltd ($8028) | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% |
| Hengxing Gold Holding Co Ltd ($2303) | | -766.2% | 24.5% | 43.9% | |
| |
|---|
| Median (49 companies) | 4.9% | 7.8% | 5.2% | 5.1% | 5.0% |
|---|
| Hengshi Mining Investments Ltd ($1370) | 22.8% | 52.0% | 45.4% | 35.3% | 36.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% |
| Kaz Minerals ($847) | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% |
| Chinalco Mining Corp International ($3668) | | | | 115.6% | |
| China Dynamics Holdings Ltd ($476) | 1.8% | 0.0% | 1.0% | 113.8% | 5.7% |
| MMG Ltd ($1208) | 25.7% | 22.6% | 41.9% | 100.4% | 31.0% |
| |
|---|
| Median (48 companies) | 17.2% | 16.8% | 15.8% | 12.1% | 7.5% |
|---|
| Hengshi Mining Investments Ltd ($1370) | 31.4% | 20.2% | 24.0% | 25.8% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Mining Co Ltd ($1164) | 2.6% | 3.3% | 7.9% | 16.7% | |
| United Co RUSAL PLC ($486) | 0.3% | -9.0% | 6.3% | 12.3% | |
| Xingfa Aluminium Holdings Ltd ($98) | 7.6% | 8.8% | 11.7% | 11.8% | |
| Timeless Software Ltd ($8028) | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% |
| China Hongqiao Group Ltd ($1378) | 24.8% | 17.0% | 14.1% | 10.6% | |
| |
|---|
| Median (50 companies) | 0.9% | 2.3% | -0.1% | -1.1% | 1.9% |
|---|
| Hengshi Mining Investments Ltd ($1370) | 50.1% | 60.1% | 20.7% | 7.9% | 7.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 9.2x | 9.7x | 9.2x | 31.5x | |
| Chinalco Mining Corp International ($3668) | | | | 25.0x | |
| MMG Ltd ($1208) | 2.1x | 2.0x | 10.2x | 20.2x | 10.4x |
| Kaz Minerals ($847) | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 4.1x | 6.4x | 13.5x | |
| |
|---|
| Median (29 companies) | 2.0x | 1.9x | 4.6x | 4.1x | 4.9x |
|---|
| Hengshi Mining Investments Ltd ($1370) | -0.2x | -1.0x | 0.5x | 1.4x | 1.8x |
