Shenzhen Expressway Co Ltd CAPEX jumped on 198% in 2016 and Revenue jumped on 35.4%
17/03/2017 • About Shenzhen Expressway Co Ltd (
$548) • By InTwits
Shenzhen Expressway Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shenzhen Expressway Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.8%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 382 in 2016, 128 in 2015, 313 in 2014, 611 in 2013, 545 in 2012
- The company has business model with low profitability: ROIC is at 8.0%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shenzhen Expressway Co Ltd ($548) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,022 | 3,163 | 3,489 | 3,298 | 4,466 | 35.4% |
| Gross Profit | 1,511 | 1,637 | 1,784 | 1,619 | 1,933 | 19.4% |
| SG&A | 74 | 80 | 86 | 141 | 151 | 7.0% |
| EBITDA | 2,245 | 2,511 | 2,674 | 1,747 | 3,076 | 76.1% |
| Net Income | 685 | 720 | 2,187 | 1,553 | 1,169 | -24.7% |
Balance Sheet
|
|---|
| Cash | 1,954 | 1,091 | 1,255 | 6,181 | 4,244 | -31.3% |
| Short Term Debt | 2,540 | 1,071 | 1,046 | 1,836 | 1,582 | -13.8% |
| Long Term Debt | 8,299 | 8,346 | 7,189 | 4,892 | 5,526 | 13.0% |
Cash flow
|
|---|
| Capex | 545 | 611 | 313 | 128 | 382 | 197.7% |
Ratios
|
|---|
| Revenue growth | 6.2% | 4.7% | 10.3% | -5.5% | 35.4% | |
| EBITDA growth | -1.9% | 11.8% | 6.5% | -34.7% | 76.1% | |
| Gross Margin | 50.0% | 51.8% | 51.1% | 49.1% | 43.3% | -5.8% |
| EBITDA Margin | 74.3% | 79.4% | 76.6% | 53.0% | 68.9% | 15.9% |
| Net Income Margin | 22.7% | 22.8% | 62.7% | 47.1% | 26.2% | -20.9% |
| SG&A, % of revenue | 2.4% | 2.5% | 2.5% | 4.3% | 3.4% | -0.9% |
| CAPEX, % of revenue | 18.1% | 19.3% | 9.0% | 3.9% | 8.6% | 4.7% |
| ROIC | 6.3% | 7.0% | 7.7% | 3.7% | 8.0% | 4.3% |
| ROE | 7.3% | 7.4% | 20.1% | 12.8% | 9.3% | -3.5% |
| Net Debt/EBITDA | 4.0x | 3.3x | 2.6x | 0.3x | 0.9x | 0.6x |
Revenue and profitability
Shenzhen Expressway Co Ltd's Revenue surged on 35.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 88.4 pp from -34.6% to 53.8% in FY2016.
Gross Margin decreased on 5.8 pp from 49.1% to 43.3% in 2016. SG&A as a % of Revenue decreased slightly on 0.90 pp from 4.3% to 3.4% in 2016.
Net Income marign dropped on 20.9 pp from 47.1% to 26.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.6% in 2016. Shenzhen Expressway Co Ltd showed big decline in CAPEX/Revenue of 10.7 pp from 19.3% in 2013 to 8.6% in 2016. It's average CAPEX/Revenue for the last three years was 7.1%.
Return on investment
The company operates at low ROIC (7.98%) and ROE (9.34%). ROIC increased on 4.3 pp from 3.7% to 8.0% in 2016. ROE decreased on 3.5 pp from 12.8% to 9.3% in 2016.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 0.3x to 0.9x in 2016. Debt increased on 5.6% while cash dropped on 31.3%.
Appendix 1: Peers in Commercial Services
Below we provide Shenzhen Expressway Co Ltd benchmarking against other companies in Commercial Services 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 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 99.1% | 14.9% | -88.3% | 271.8% | |
| China Seven Star Holdings Ltd ($245) | 6.7% | -81.8% | -39.3% | 195.3% | |
| China Smartpay Group Holdings Ltd ($8325) | | 274.7% | 75.6% | 124.5% | 79.5% |
| Celebrate International Holdings Ltd ($8212) | | 1,437.6% | -6.3% | 117.0% | -78.1% |
| Haier Healthwise Holdings Ltd ($348) | | -50.1% | -7.5% | 101.1% | -9.4% |
| |
|---|
| Median (67 companies) | 2.6% | 8.6% | 9.8% | 4.7% | 9.5% |
|---|
| Shenzhen Expressway Co Ltd ($548) | | 4.7% | 10.3% | -5.5% | 35.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HC International Inc ($2280) | 87.5% | 91.9% | 92.5% | 89.6% | |
| Winto Group Holdings Ltd ($8238) | 90.2% | 93.4% | 92.0% | 88.4% | |
| Dingyi Group Investment Ltd ($508) | 75.8% | | 64.5% | 86.0% | 89.6% |
| Fu Shou Yuan International Group Ltd ($1448) | 80.5% | 80.4% | 80.0% | 77.6% | 79.1% |
| Nirvana Asia Ltd ($1438) | 68.3% | 69.6% | 70.5% | 75.7% | |
| |
|---|
| Median (61 companies) | 31.5% | 30.5% | 31.0% | 30.9% | 30.8% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 50.0% | 51.8% | 51.1% | 49.1% | 43.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | 61.6% | 84.9% | 75.9% | 80.9% | |
| Shenzhen International Holdings Ltd ($152) | 60.2% | 65.8% | 97.1% | 73.6% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 78.3% | 74.5% | 74.0% | 71.6% | 84.1% |
| CAR Inc ($699) | 43.6% | 30.1% | 43.1% | 67.4% | 62.5% |
| Jiangsu Expressway Co Ltd ($177) | 57.0% | 60.7% | 59.3% | 61.5% | |
| |
|---|
| Median (67 companies) | 17.5% | 14.9% | 11.2% | 9.8% | 1.5% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 74.3% | 79.4% | 76.6% | 53.0% | 68.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 21.3% | 9.0% | 13.9% | 47.4% | |
| COSCO Pacific Ltd ($1199) | 96.6% | 66.6% | 43.3% | 45.8% | |
| Shenzhen International Holdings Ltd ($152) | 23.0% | 22.1% | 20.9% | 35.0% | |
| Celebrate International Holdings Ltd ($8212) | 211.7% | 12.0% | 6.2% | 34.2% | 18.6% |
| China Maple Leaf Educational Systems Ltd ($1317) | 25.7% | 50.9% | 21.1% | 32.8% | 18.0% |
| |
|---|
| Median (67 companies) | 2.7% | 3.4% | 2.4% | 2.8% | 2.3% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 18.1% | 19.3% | 9.0% | 3.9% | 8.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bamboos Health Care Holdings Ltd ($8216) | | 71.1% | 50.1% | 58.3% | 40.0% |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 51.5% | 26.6% | 30.0% | 29.5% | 19.8% |
| 1010 Printing Group Ltd ($1127) | 13.5% | 20.8% | 17.8% | 19.9% | 18.8% |
| China Packaging Holdings Development Ltd ($1439) | 52.0% | 46.6% | 34.1% | 19.8% | |
| iOne Holdings Ltd ($982) | 12.5% | 11.1% | 9.4% | 19.2% | |
| |
|---|
| Median (67 companies) | 7.5% | 6.4% | 5.8% | 3.3% | 2.0% |
|---|
| Shenzhen Expressway Co Ltd ($548) | 6.3% | 7.0% | 7.7% | 3.7% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | 22.2x | |
| Kai Yuan Holdings Ltd ($1215) | -143.8x | -0.7x | | 18.8x | |
| Eagle Legend Asia Ltd ($936) | 4.0x | 4.0x | 3.3x | 6.2x | |
| Sichuan Expressway Co Ltd ($107) | 2.7x | 3.8x | 4.3x | 5.5x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 4.5x | 3.1x | 2.7x | 5.3x | 3.5x |
| |
|---|
| Median (44 companies) | -0.0x | -0.7x | -0.9x | -0.8x | -2.3x |
|---|
| Shenzhen Expressway Co Ltd ($548) | 4.0x | 3.3x | 2.6x | 0.3x | 0.9x |
