Sinopec Engineering Group Co Ltd Net Income dropped on 49.9% in 2016
20/03/2017 • About Sinopec Engineering Group Co Ltd (
$2386) • By InTwits
Sinopec Engineering Group Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: in FY2016 vs. 9.3% in FY2015 vs. 11.8% in FY2012
- The company has business model with low profitability: ROIC is at 7.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sinopec Engineering Group Co Ltd ($2386) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 38,526 | 43,572 | 49,346 | 45,498 | 39,375 | -13.5% |
| Gross Profit | 5,528 | 6,406 | 6,291 | 6,157 | 4,291 | -30.3% |
| SG&A | 967 | 1,076 | 1,114 | 1,140 | 1,267 | 11.2% |
| EBITDA | 4,537 | 5,168 | 4,646 | 4,238 | | -100.0% |
| Net Income | 3,317 | 3,657 | 3,490 | 3,318 | 1,663 | -49.9% |
Balance Sheet
|
|---|
| Cash | 4,822 | 5,514 | 9,182 | 11,406 | 11,862 | 4.0% |
| Short Term Debt | 157 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 1,345 | 413 | 470 | 262 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 25.9% | 13.1% | 13.3% | -7.8% | -13.5% | |
| EBITDA growth | 10.6% | 13.9% | -10.1% | -8.8% | | |
| Gross Margin | 14.3% | 14.7% | 12.7% | 13.5% | 10.9% | -2.6% |
| EBITDA Margin | 11.8% | 11.9% | 9.4% | 9.3% | 0.0% | -9.3% |
| Net Income Margin | 8.6% | 8.4% | 7.1% | 7.3% | 4.2% | -3.1% |
| SG&A, % of revenue | 2.5% | 2.5% | 2.3% | 2.5% | 3.2% | 0.7% |
| CAPEX, % of revenue | 3.5% | 0.9% | 1.0% | 0.6% | | -0.6% |
| ROIC | 77.5% | 33.3% | 18.6% | 15.3% | 7.8% | -7.4% |
| ROE | 67.6% | 26.1% | 15.9% | 14.0% | 6.7% | -7.3% |
| Net Debt/EBITDA | -1.0x | -1.1x | -2.0x | -2.7x | | 2.7x |
Revenue and profitability
The company's Revenue dropped on 13.5%.
Gross Margin decreased on 2.6 pp from 13.5% to 10.9% in FY2016. SG&A as a % of Revenue increased slightly on 0.71 pp from 2.5% to 3.2% in FY2016.
Net Income marign decreased on 3.1 pp from 7.3% to 4.2% in FY2016.
Return on investment
The company operates at low ROIC (7.83%) and ROE (6.67%). ROIC decreased on 7.4 pp from 15.3% to 7.8% in FY2016. ROE decreased on 7.3 pp from 14.0% to 6.7% in FY2016.
Leverage (Debt)
The company has no debt. Cash increased on 4.0%.
Appendix 1: Peers in Oil&Gas Services
Below we provide Sinopec Engineering Group Co Ltd benchmarking against other companies in Oil&Gas 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 |
|---|
| Hans Energy Co Ltd ($554) | 40.8% | 8.0% | -4.0% | 5.5% | |
| Hilong Holding Ltd ($1623) | 23.5% | 8.3% | 5.0% | -3.6% | |
| Petro-King Oilfield Services Ltd ($2178) | 543.3% | 0.3% | -33.5% | -10.5% | |
| Anton Oilfield Services Group/Hong Kong ($3337) | 59.2% | 26.4% | -18.2% | -11.5% | |
| CIMC Enric Holdings Ltd ($3899) | 18.4% | -0.3% | 39.7% | -26.9% | |
| |
|---|
| Median (12 companies) | 23.5% | 9.1% | 0.5% | -28.7% | 3.6% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | | 13.1% | 13.3% | -7.8% | -13.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 1.1% | 0.7% | 4.4% | 41.1% | |
| Hilong Holding Ltd ($1623) | 39.5% | 40.3% | 39.6% | 32.6% | |
| Anton Oilfield Services Group/Hong Kong ($3337) | 45.0% | 44.3% | 31.2% | 31.8% | |
| TSC Group Holdings Ltd ($206) | 30.7% | 31.6% | 27.8% | 27.9% | |
| Jutal Offshore Oil Services Ltd ($3303) | 21.7% | 25.1% | 19.6% | 19.6% | |
| |
|---|
| Median (9 companies) | 19.5% | 20.4% | 18.8% | 19.6% | 1.5% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 14.3% | 14.7% | 12.7% | 13.5% | 10.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 1.5% | 0.9% | 6.6% | 63.8% | |
| Hans Energy Co Ltd ($554) | 40.4% | 45.0% | 42.8% | 42.7% | |
| China Oilfield Services Ltd ($2883) | 39.8% | 40.0% | 37.0% | 25.2% | |
| Hilong Holding Ltd ($1623) | 25.9% | 27.8% | 28.8% | 22.7% | |
| Anton Oilfield Services Group/Hong Kong ($3337) | 24.5% | 28.0% | 12.5% | 17.2% | |
| |
|---|
| Median (12 companies) | 16.0% | 16.9% | 12.5% | 9.2% | 0.9% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 11.8% | 11.9% | 9.4% | 9.3% | |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Oilfield Services Ltd ($2883) | 16.5% | 30.9% | 29.8% | 25.3% | |
| SPT Energy Group Inc ($1251) | 7.4% | 5.6% | 7.9% | 23.5% | |
| Sinopec Kantons Holdings Ltd ($934) | 0.8% | 1.7% | 6.7% | 15.8% | |
| Petro-King Oilfield Services Ltd ($2178) | 13.3% | 13.3% | 75.4% | 12.3% | |
| Hilong Holding Ltd ($1623) | 16.7% | 18.9% | 48.1% | 9.6% | |
| |
|---|
| Median (12 companies) | 10.0% | 6.3% | 7.3% | 8.9% | 0.2% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 3.5% | 0.9% | 1.0% | 0.6% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CIMC Enric Holdings Ltd ($3899) | 20.3% | 20.0% | 21.3% | 8.9% | |
| Hilong Holding Ltd ($1623) | 15.5% | 14.8% | 12.0% | 6.0% | |
| Sinopec Kantons Holdings Ltd ($934) | 3.5% | 0.4% | 6.0% | 5.0% | |
| Yuan Heng Gas Holdings Ltd ($332) | -59.8% | -0.0% | 25.6% | 3.9% | -0.4% |
| China Oilfield Services Ltd ($2883) | 8.9% | 11.2% | 11.6% | 2.1% | |
| |
|---|
| Median (12 companies) | 7.8% | 10.1% | 7.9% | 1.8% | -0.4% |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 77.5% | 33.3% | 18.6% | 15.3% | 7.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hans Energy Co Ltd ($554) | 14.0x | 11.9x | 12.9x | 11.3x | |
| Yuan Heng Gas Holdings Ltd ($332) | | | 2.7x | 8.9x | 18.1x |
| Anton Oilfield Services Group/Hong Kong ($3337) | 0.0x | 0.9x | 7.4x | 6.4x | |
| China Oilfield Services Ltd ($2883) | 2.7x | 1.9x | 1.8x | 3.9x | |
| Hilong Holding Ltd ($1623) | 0.9x | 1.1x | 2.6x | 3.3x | |
| |
|---|
| Median (10 companies) | 0.1x | -0.0x | 1.8x | 2.8x | 18.1x |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | -1.0x | -1.1x | -2.0x | -2.7x | |
