Cheung Kong Infrastructure Holdings Ltd EBITDA dropped on 39.7% in 2016 and EBITDA Margin dropped on 22.5 pp from 60.9% to 38.4%
21/03/2017 • About Cheung Kong Infrastructure Holdings Ltd (
$1038) • By InTwits
Cheung Kong Infrastructure Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cheung Kong Infrastructure Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.4%
- EBITDA Margin is quite volatile: 38.4% in FY2016, 60.9% in FY2015, 36.2% in FY2014, 20.6% in FY2013, 31.2% in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cheung Kong Infrastructure Holdings Ltd ($1038) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,105 | 5,018 | 6,100 | 5,557 | 5,321 | -4.2% |
| EBITDA | 1,279 | 1,036 | 2,207 | 3,383 | 2,041 | -39.7% |
| Net Income | 9,427 | 11,639 | 31,782 | 11,162 | 10,220 | -8.4% |
Balance Sheet
|
|---|
| Cash | 6,980 | 5,958 | 7,108 | 7,897 | 11,790 | 49.3% |
| Short Term Debt | 24 | 44 | 1,690 | 15 | 9,901 | 65,906.7% |
| Long Term Debt | 11,089 | 12,985 | 16,947 | 17,162 | 6,944 | -59.5% |
Cash flow
|
|---|
| Capex | 680 | 405 | 292 | 294 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 17.5% | 22.2% | 21.6% | -8.9% | -4.2% | |
| EBITDA growth | -7.9% | -19.0% | 113.0% | 53.3% | -39.7% | |
| EBITDA Margin | 31.2% | 20.6% | 36.2% | 60.9% | 38.4% | -22.5% |
| Net Income Margin | 229.6% | 231.9% | 521.0% | 200.9% | 192.1% | -8.8% |
| CAPEX, % of revenue | 16.6% | 8.1% | 4.8% | 5.3% | | -5.3% |
| ROIC | 1.5% | 1.0% | 1.8% | 2.5% | 1.4% | -1.1% |
| ROE | 16.4% | 17.5% | 38.8% | 11.4% | 9.7% | -1.7% |
| Net Debt/EBITDA | 3.2x | 6.8x | 5.2x | 2.7x | 2.5x | -0.3x |
Revenue and profitability
The company's Revenue decreased on 4.2%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 22.5 pp from 60.9% to 38.4% in FY2016.
Net Income marign decreased on 8.8 pp from 201% to 192% in FY2016.
Return on investment
The company operates at low ROIC (1.44%) and ROE (9.68%). ROIC decreased slightly on 1.1 pp from 2.5% to 1.4% in FY2016. ROE decreased slightly on 1.7 pp from 11.4% to 9.7% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 8.3x. Net Debt / EBITDA dropped on 0.3x from 2.7x to 2.5x in FY2016. Debt decreased slightly on 1.9% while cash jumped on 49.3%.
Appendix 1: Peers in Engineering&Construction
Below we provide Cheung Kong Infrastructure Holdings Ltd benchmarking against other companies in Engineering&Construction 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 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | | -76.8% | -55.8% | 592.3% | 86.7% |
| Vision Fame International Holding Ltd ($1315) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Sino Credit Holdings Ltd ($628) | | | | 97.4% | -40.3% |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (44 companies) | 9.2% | 24.8% | 20.8% | 10.8% | 6.4% |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | | 22.2% | 21.6% | -8.9% | -4.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | 37.4% |
| Sam Woo Construction Group Ltd ($3822) | 33.2% | 27.3% | 33.6% | 36.0% | 19.8% |
| China National Culture Group Ltd ($745) | 0.9% | 12.1% | 10.3% | 32.3% | 19.2% |
| |
|---|
| Median (40 companies) | 17.0% | 16.5% | 15.8% | 16.0% | 12.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | 50.9% |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | -14.6% |
| Chevalier International Holdings Ltd ($25) | 10.4% | 11.9% | 12.8% | 37.5% | 11.8% |
| |
|---|
| Median (44 companies) | 9.9% | 10.4% | 9.2% | 8.3% | 5.1% |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | 38.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| NEW Concepts Holdings Ltd ($2221) | 1.7% | 1.2% | 3.1% | 20.5% | 0.3% |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | 47.3% |
| |
|---|
| Median (44 companies) | 2.2% | 2.5% | 1.7% | 2.0% | 2.4% |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 16.6% | 8.1% | 4.8% | 5.3% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| In Construction Holdings Ltd ($1500) | | 52.8% | 37.0% | 49.4% | 40.4% |
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | 21.6% |
| NEW Concepts Holdings Ltd ($2221) | | 51.0% | 78.8% | 39.0% | 23.3% |
| Sam Woo Construction Group Ltd ($3822) | | 28.2% | 28.7% | 33.5% | 18.3% |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | -2.9% |
| |
|---|
| Median (46 companies) | 6.5% | 6.1% | 5.4% | 5.6% | 2.6% |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 1.5% | 1.0% | 1.8% | 2.5% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | 2.7x |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (38 companies) | 0.7x | 0.2x | 0.2x | 0.7x | 0.6x |
|---|
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 3.2x | 6.8x | 5.2x | 2.7x | 2.5x |
