Shanghai Electric Group Co Ltd reports 6.5% EBITDA growth and 0.66% Revenue decline
18/03/2017 • About Shanghai Electric Group Co Ltd (
$2727) • By InTwits
Shanghai Electric Group Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shanghai Electric Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 6.1%.
- CAPEX is quite volatile: 8,343 in FY2016, 5,944 in FY2015, 5,485 in FY2014, 4,257 in FY2013, 2,305 in FY2012
- The company has potentially unprofitable business model: ROIC is at 4.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shanghai Electric Group Co Ltd ($2727) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 76,591 | 78,795 | 76,785 | 78,976 | 78,456 | -0.7% |
| Gross Profit | 13,989 | 13,710 | 14,366 | 16,606 | 16,520 | -0.5% |
| SG&A | 6,957 | 7,678 | 10,536 | 8,326 | 7,703 | -7.5% |
| EBITDA | 6,685 | 5,962 | 6,661 | 4,518 | 4,812 | 6.5% |
| Net Income | 2,715 | 2,393 | 2,511 | 2,143 | 2,060 | -3.8% |
Balance Sheet
|
|---|
| Cash | 22,142 | 21,409 | 25,113 | 36,970 | 39,471 | 6.8% |
| Short Term Debt | 3,419 | 3,765 | 5,009 | 6,073 | 8,687 | 43.0% |
| Long Term Debt | 2,029 | 2,209 | 2,847 | 10,917 | 12,146 | 11.3% |
Cash flow
|
|---|
| Capex | 2,079 | 1,813 | 1,772 | 1,335 | 1,506 | 12.8% |
Ratios
|
|---|
| Revenue growth | 7.2% | 2.9% | -2.6% | 2.9% | -0.7% | |
| EBITDA growth | 20.2% | -10.8% | 11.7% | -32.2% | 6.5% | |
| Gross Margin | 18.3% | 17.4% | 18.7% | 21.0% | 21.1% | 0.0% |
| EBITDA Margin | 8.7% | 7.6% | 8.7% | 5.7% | 6.1% | 0.4% |
| Net Income Margin | 3.5% | 3.0% | 3.3% | 2.7% | 2.6% | -0.1% |
| SG&A, % of revenue | 9.1% | 9.7% | 13.7% | 10.5% | 9.8% | -0.7% |
| CAPEX, % of revenue | 2.7% | 2.3% | 2.3% | 1.7% | 1.9% | 0.2% |
| ROIC | 10.9% | 8.6% | 8.9% | 4.5% | 4.2% | -0.2% |
| ROE | 9.0% | 7.6% | 7.6% | 5.8% | 4.9% | -0.9% |
| Net Debt/EBITDA | -2.5x | -2.6x | -2.6x | -4.4x | -3.9x | 0.5x |
Revenue and profitability
The company's Revenue decreased slightly on 0.66% in 2016. EBITDA Margin showed almost no change in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue decreased slightly on 0.72 pp from 10.5% to 9.8% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
Shanghai Electric Group Co Ltd's CAPEX/Revenue was 1.9% in 2016. CAPEX/Revenue showed almost no change from 2013 to 2016. For the last three years the average CAPEX/Revenue was 2.0%.
Return on investment
The company operates at low ROIC (4.24%) and ROE (4.88%). ROIC showed almost no change in 2016. ROE decreased slightly on 0.95 pp from 5.8% to 4.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -3.9x and Debt / EBITDA is 4.3x. Net Debt / EBITDA surged on 0.5x from -4.4x to -3.9x in 2016. Debt surged on 22.6% in 2016 while cash increased on 6.8% in 2016.
Appendix 1: Peers in Machinery-Diversified
Below you can find Shanghai Electric Group Co Ltd benchmarking vs. other companies in Machinery-Diversified 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 |
|---|
| Shanghai Prime Machinery Co Ltd ($2345) | 2.6% | -8.9% | 37.3% | 52.8% | |
| North Asia Strategic Holdings Ltd ($8080) | | -29.1% | 23.7% | 42.6% | -3.9% |
| Huazhang Technology Holding Ltd ($1673) | | 9.5% | 22.9% | 23.5% | 3.3% |
| Sinoref Holdings Ltd ($1020) | -0.2% | -42.2% | 29.2% | 19.9% | |
| LK Technology Holdings Ltd ($558) | | -15.0% | 3.7% | 18.5% | -10.3% |
| |
|---|
| Median (21 companies) | -5.0% | -4.2% | 1.1% | -5.6% | -10.3% |
|---|
| Shanghai Electric Group Co Ltd ($2727) | | 2.9% | -2.6% | 2.9% | -0.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 49.1% | 51.7% | 54.9% | 65.5% | |
| Renheng Enterprise Holdings Ltd ($3628) | 44.3% | 44.8% | 45.4% | 48.9% | |
| Haitian International Holdings Ltd ($1882) | 30.1% | 31.6% | 32.4% | 33.0% | |
| CHTC Fong's Industries Co Ltd ($641) | 24.4% | 30.0% | 32.3% | 31.2% | |
| Good Friend International Holdings Inc ($2398) | 20.1% | 22.9% | 26.5% | 27.1% | |
| |
|---|
| Median (21 companies) | 24.4% | 22.6% | 20.0% | 20.9% | 17.0% |
|---|
| Shanghai Electric Group Co Ltd ($2727) | 18.3% | 17.4% | 18.7% | 21.0% | 21.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jingwei Textile Machinery ($350) | 24.0% | 26.9% | 28.0% | 28.5% | |
| Haitian International Holdings Ltd ($1882) | 19.7% | 20.7% | 21.9% | 22.8% | |
| Renheng Enterprise Holdings Ltd ($3628) | 24.7% | 23.9% | 20.7% | 17.3% | |
| Huazhang Technology Holding Ltd ($1673) | 11.6% | 11.2% | 12.5% | 11.3% | 10.8% |
| Good Friend International Holdings Inc ($2398) | 6.7% | 9.1% | 12.9% | 9.9% | |
| |
|---|
| Median (21 companies) | 10.9% | 8.7% | 8.5% | 5.7% | 0.8% |
|---|
| Shanghai Electric Group Co Ltd ($2727) | 8.7% | 7.6% | 8.7% | 5.7% | 6.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wuxi Sunlit Science and Technology Co Ltd ($1289) | 2.3% | 10.1% | 7.8% | 31.9% | |
| Honghua Group Ltd ($196) | 11.5% | 14.6% | 6.8% | 27.3% | |
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 20.5% | 20.3% | 11.6% | 15.6% | |
| Shenji Group Kunming Machine Tool Co Ltd ($300) | 9.5% | 6.7% | 5.0% | 8.3% | |
| Haitian International Holdings Ltd ($1882) | 4.2% | 6.8% | 6.3% | 6.3% | |
| |
|---|
| Median (21 companies) | 4.2% | 4.3% | 4.5% | 2.4% | 0.9% |
|---|
| Shanghai Electric Group Co Ltd ($2727) | 2.7% | 2.3% | 2.3% | 1.7% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Haitian International Holdings Ltd ($1882) | 19.8% | 21.2% | 19.4% | 16.3% | |
| Huazhang Technology Holding Ltd ($1673) | 29.6% | 16.2% | 16.3% | 16.2% | 12.8% |
| Jingwei Textile Machinery ($350) | 19.4% | 20.9% | 17.4% | 14.9% | |
| Good Friend International Holdings Inc ($2398) | 6.5% | 8.7% | 12.1% | 5.9% | |
| Shanghai Prime Machinery Co Ltd ($2345) | 2.5% | 2.8% | 2.5% | 5.8% | |
| |
|---|
| Median (21 companies) | 7.1% | 4.0% | 2.6% | 1.4% | -0.0% |
|---|
| Shanghai Electric Group Co Ltd ($2727) | 10.9% | 8.6% | 8.9% | 4.5% | 4.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shandong Molong Petroleum Machinery Co Ltd ($568) | 3.0x | 11.4x | 5.6x | 129.4x | |
| Honghua Group Ltd ($196) | 1.2x | 3.2x | 5.2x | 14.2x | |
| First Tractor Co Ltd ($38) | 0.5x | 2.5x | 9.2x | 6.3x | |
| LK Technology Holdings Ltd ($558) | 2.5x | 5.1x | 4.9x | 4.6x | 5.7x |
| Cosmos Machinery Enterprises Ltd ($118) | 2.2x | 1.7x | 2.1x | 3.9x | |
| |
|---|
| Median (16 companies) | -0.6x | 0.1x | -0.3x | 3.1x | 4.7x |
|---|
| Shanghai Electric Group Co Ltd ($2727) | -2.5x | -2.6x | -2.6x | -4.4x | -3.9x |
