Zhaojin Mining Industry Co Ltd reports 14.7% Net Income growth while 1.4 pp EBITDA Margin decline from 30.5% to 29.1%
19/03/2017 • About Zhaojin Mining Industry Co Ltd (
$1818) • By InTwits
Zhaojin Mining Industry 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 3.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 6.5x while industry average is 5.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zhaojin Mining Industry Co Ltd ($1818) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,604 | 6,344 | 5,606 | 5,887 | 6,665 | 13.2% |
| Gross Profit | 3,692 | 2,240 | 2,172 | 2,231 | 2,729 | 22.3% |
| SG&A | 841 | 918 | 1,027 | 1,056 | 1,126 | 6.7% |
| EBITDA | 3,283 | 1,916 | 1,839 | 1,797 | 1,942 | 8.1% |
| Net Income | 1,924 | 734 | 455 | 308 | 353 | 14.7% |
Balance Sheet
|
|---|
| Cash | 1,344 | 871 | 866 | 1,780 | 1,438 | -19.2% |
| Short Term Debt | 3,168 | 6,825 | 4,716 | 9,524 | 12,096 | 27.0% |
| Long Term Debt | 2,740 | 2,308 | 4,864 | 3,873 | 2,033 | -47.5% |
Cash flow
|
|---|
| Capex | 2,358 | 2,379 | 2,097 | 1,934 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 32.4% | -16.6% | -11.6% | 5.0% | 13.2% | |
| EBITDA growth | 15.4% | -41.6% | -4.0% | -2.3% | 8.1% | |
| Gross Margin | 48.6% | 35.3% | 38.8% | 37.9% | 41.0% | 3.1% |
| EBITDA Margin | 43.2% | 30.2% | 32.8% | 30.5% | 29.1% | -1.4% |
| Net Income Margin | 25.3% | 11.6% | 8.1% | 5.2% | 5.3% | 0.1% |
| SG&A, % of revenue | 11.1% | 14.5% | 18.3% | 17.9% | 16.9% | -1.0% |
| CAPEX, % of revenue | 31.0% | 37.5% | 37.4% | 32.8% | | -32.8% |
| ROIC | 21.5% | 7.5% | 6.0% | 4.4% | 3.9% | -0.5% |
| ROE | 25.7% | 8.7% | 5.3% | 3.6% | 4.0% | 0.4% |
| Net Debt/EBITDA | 1.4x | 4.3x | 4.7x | 6.5x | 6.5x | 0.1x |
Revenue and profitability
Zhaojin Mining Industry Co Ltd's Revenue jumped on 13.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 43.4% to 46.3% in FY2016.
Gross Margin increased on 3.1 pp from 37.9% to 41.0% in FY2016. SG&A as a % of Revenue decreased slightly on 1.0 pp from 17.9% to 16.9% in FY2016.
Net Income marign showed almost no change in FY2016.
Return on investment
The company operates at low ROIC (3.93%) and ROE (4.00%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is 6.5x Net Debt / EBITDA and 7.3x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 6.5x to 6.5x in FY2016. Debt increased on 5.5% while cash dropped on 19.2%.
Appendix 1: Peers in Mining
Below we provide Zhaojin Mining Industry Co 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) | | 2.5% | 18.1% | 26.9% | 6.1% |
| |
|---|
| Median (47 companies) | 6.4% | 0.6% | -5.1% | -20.8% | 4.9% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | | -16.6% | -11.6% | 5.0% | 13.2% |
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% | 26.1% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 48.6% | 35.3% | 38.8% | 37.9% | 41.0% |
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% | 11.4% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 43.2% | 30.2% | 32.8% | 30.5% | 29.1% |
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% | 7.0% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 31.0% | 37.5% | 37.4% | 32.8% | |
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% | 9.0% |
| 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% | 2.2% |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 21.5% | 7.5% | 6.0% | 4.4% | 3.9% |
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 | 1.8x | 4.4x | 3.4x | 4.4x |
|---|
| Zhaojin Mining Industry Co Ltd ($1818) | 1.4x | 4.3x | 4.7x | 6.5x | 6.5x |
