China ZhengTong Auto Services Holdings Ltd revenue increased on 7.3% in 2016 and EBITDA Margin showed almost no change
21/03/2017 • About China ZhengTong Auto Services Holdings Ltd (
$1728) • By InTwits
China ZhengTong Auto Services Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.7% in FY2016 vs. 6.1% in FY2015 vs. 6.0% in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.4%
- It operates with high leverage: Net Debt/EBITDA is 5.4x while industry average is 0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China ZhengTong Auto Services Holdings Ltd ($1728) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 27,649 | 29,840 | 30,910 | 29,361 | 31,519 | 7.3% |
| Gross Profit | 2,452 | 2,588 | 2,726 | 2,587 | 2,736 | 5.8% |
| SG&A | 1,422 | 1,279 | 1,588 | 1,759 | 2,020 | 14.8% |
| EBITDA | 1,668 | 1,889 | 1,967 | 1,798 | 1,800 | 0.1% |
| Net Income | 604 | 837 | 804 | 619 | 493 | -20.2% |
Balance Sheet
|
|---|
| Cash | 1,207 | 1,487 | 1,466 | 1,599 | 1,625 | 1.6% |
| Short Term Debt | 6,548 | 6,196 | 8,694 | 9,082 | 8,747 | -3.7% |
| Long Term Debt | 1,205 | 2,353 | 2,032 | 2,346 | 2,539 | 8.2% |
Cash flow
|
|---|
| Capex | 1,101 | 1,141 | 1,714 | 1,025 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 91.4% | 7.9% | 3.6% | -5.0% | 7.3% | |
| EBITDA growth | 81.7% | 13.3% | 4.1% | -8.6% | 0.1% | |
| Gross Margin | 8.9% | 8.7% | 8.8% | 8.8% | 8.7% | -0.1% |
| EBITDA Margin | 6.0% | 6.3% | 6.4% | 6.1% | 5.7% | -0.4% |
| Net Income Margin | 2.2% | 2.8% | 2.6% | 2.1% | 1.6% | -0.5% |
| SG&A, % of revenue | 5.1% | 4.3% | 5.1% | 6.0% | 6.4% | 0.4% |
| CAPEX, % of revenue | 4.0% | 3.8% | 5.5% | 3.5% | | -3.5% |
| ROIC | 8.5% | 9.5% | 8.5% | 6.8% | 6.4% | -0.4% |
| ROE | 9.4% | 11.8% | 10.2% | 7.4% | 5.7% | -1.7% |
| Net Debt/EBITDA | 3.9x | 3.7x | 4.7x | 5.5x | 5.4x | -0.1x |
Revenue and profitability
The company's Revenue increased on 7.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 30.7% to 32.7% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased slightly on 0.54 pp from 2.1% to 1.6% in FY2016.
Return on investment
The company operates at low ROIC (6.36%) and ROE (5.65%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.7 pp from 7.4% to 5.7% in FY2016.
Leverage (Debt)
Debt level is 5.4x Net Debt / EBITDA and 6.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 5.5x to 5.4x in FY2016. Debt decreased slightly on 1.2% while cash increased slightly on 1.6%.
Management team
China ZhengTong Auto Services Holdings Ltd's CEO Koh Tee Choong "Ivan" has spent 1 year at the company. China ZhengTong Auto Services Holdings Ltd's CFO Li Zhubo has spent 8 years at the company.
Appendix 1: Peers in Retail
Below you can find China ZhengTong Auto Services Holdings Ltd benchmarking vs. other companies in Retail 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 |
|---|
| China Nuclear Industry 23 International Corp Ltd ($611) | | 85.6% | -42.1% | 419.8% | 21.8% |
| Noble House China Holdings Ltd ($8246) | | -20.2% | -24.8% | 117.2% | 129.1% |
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
| Nanjing Sinolife United Co Ltd ($3332) | 45.6% | 29.5% | 29.6% | 57.3% | |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | | 72.8% | 23.0% | 48.3% | 12.5% |
| |
|---|
| Median (117 companies) | 9.7% | 6.1% | 2.9% | -1.0% | -5.0% |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | | 7.9% | 3.6% | -5.0% | 7.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | 77.6% |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (103 companies) | 37.2% | 36.4% | 35.5% | 33.9% | 44.4% |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | 8.9% | 8.7% | 8.8% | 8.8% | 8.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | 46.3% |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (117 companies) | 10.8% | 7.8% | 9.1% | 7.4% | 6.8% |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | 6.0% | 6.3% | 6.4% | 6.1% | 5.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | 3.9% |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (117 companies) | 4.1% | 3.6% | 3.7% | 3.1% | 2.1% |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | 4.0% | 3.8% | 5.5% | 3.5% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
| JC Group Holdings Ltd ($8326) | | 215.6% | 92.8% | 66.3% | 81.7% |
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | 46.2% |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | 19.0% |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | 68.8% |
| |
|---|
| Median (117 companies) | 12.3% | 8.8% | 8.7% | 5.8% | 6.9% |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | 8.5% | 9.5% | 8.5% | 6.8% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | 8.5x |
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | 11.1x |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| |
|---|
| Median (91 companies) | -0.5x | -0.6x | -0.2x | -0.5x | -0.4x |
|---|
| China ZhengTong Auto Services Holdings Ltd ($1728) | 3.9x | 3.7x | 4.7x | 5.5x | 5.4x |
